Landlords face a growing risk of tenant fraud. Providing false information in the rental application is the main source of this fraud, which can lead to significant income loss for landlords.
Tenant fraud can impact any landlord, but smaller rental businesses and inexperienced landlords are the ones most likely to be targeted by bad tenants.
Fortunately, it’s easy to avoid this income loss by verifying the information provided in the rental application. Just follow these steps:
1. Ask to see a photo ID. Note the full legal name, address, and any other identifying information. Of course, check to see that the picture appears to belong to the applicant. The best time to do this is before the property tour. If there are inconsistencies between the ID and what the applicant said earlier, resolve 
the issue before showing the property. Alternatively, ask for the photo ID in conjunction with providing the rental application.
2. Skim the completed application. Look for glaring omissions, like a name that doesn’t match the ID, sections not completed, or no signatures.
An incomplete application is a telltale sign of tenant fraud. If an applicant won’t declare that the information provided is true, the person is signaling they have lied. Online applications are especially problematic due to the perceived anonymity. An applicant who won’t provide a previous address or the name of current or previous landlords has something to hide. “I can’t remember,” is the same as a lie. How could someone live in the same apartment for the past two years and not remember the address? Or who the rent cheques were made out to?
The signature on the application provides consent to a tenant background check. An uncooperative applicant may be trying to bluff their way into the property. That’s a nonstarter, and the application should be rejected.
3. Confirm qualifications. Compare the application with a checklist of qualifications. This step will focus primarily on income. Review the supplemental documentation. Assuming the information provided is true, is this person qualified for the property?
4. Speak with references. Verify income by contacting the employer or other appropriate third-party. It is not enough to see supplemental documentation like pay stubs. Those can be doctored. To catch fraudulent references, spend a moment on the reference’s website and look for possible inconsistencies. For instance, does the applicant’s work number provided line up in the sequence of other employer phone numbers? Is the applicant’s name listed under employees?
Income is not the only factor in determining qualifications. Rental history is equally important and must be verified by speaking with a third party. Check with the current and previous landlords. For a checklist of questions, see our blog post, What Should I Ask Previous Landlords?
As with employment references, spend a few moments confirming the landlord reference is genuine. Go to the previous apartment website or view that property on a map. Is the address legitimate? Chat briefly with the reference about the property. Ask questions a landlord should know but that can be fact-checked: What’s nearby? How many units? How long have you owned it? Fraudulent references rarely take the time to research their roles.
5. Run a tenant credit check as a last step. If the person has not completed the application, doesn’t qualify on income, or has not provided good references, there is no need to run credit because that person is not qualified. But if the prospect otherwise checks out, this is a crucial step in catching tenant fraud. The tenant’s credit report is available only from a third party and therefore cannot be altered or tied to a fake identity. That’s why problem tenants work so hard to get a landlord to skip this step.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
Click Here to Receive Landlord Credit Reports.
Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.
