Why Landlords Should Always Require a Tenant Background Check…

/in /by

As a landlord, it is important that you protect yourself from bad tenants. Background checks are an essential part of tenant screening as they give you intel on the tenants past. If you get several applicants, tenant screening can help you determine who you should choose to rent your property.

How to Thoroughly Screen Your Tenants

  • There are quite a few steps to thorough tenant screening…
  • List your rental online— make it appealing to higher quality tenants.
  • As you narrow down the applicants, ask the right questions.
  • Schedule a meeting with the clients so that you can pick up in any red flags.
  • Have potential tenants complete a thorough rental application.
  • Run a credit report on the applicants and review it.

If permitted, require potential tenants to authorize a background check and analyze it thoroughly. These are a must.

Safety First!

As you make you decision on who to rent to, it is important to remind yourself that who rents the property will be someone that is an active part of your community. As a homeowner in the neighborhood, it is your responsibility to make sure that your tenants won’t put anyone in the community at risk. You would be surprised to know that about a quarter of tenants who authorize a background check have a criminal past— so be thorough during your screening. However, having a criminal record is not a reason for you to turn down a tenant. Assess their criminal history on individual basis and be sure that the applicant you choose to rent to will not be a problem for yourself, other tenants, neighboring resident, or the property.

You Could Be Held Liable If You Don’t

Requiring a background check helps you obtain valuable information about your prospective tenants. If you do not, you could be held liable if something were to go wrong. While they say “ignorance is bliss,” it is not an excuse. If your tenant were to commit a crime at your property, you could be sued for negligence. You should also know that your reason for accepting or denying applicants is important as the Fair Housing Act prevents you from denying tenancy based on the applicants age, race, gender, national origin, and more. However, you can deny applicants who have a criminal past. If this is your reason, you will have to validate that your decision was made to keep your property and the surrounding community safe. Criminal history cannot be used as a cover up for discriminatory reasons— you must make it clear that you are rejecting their application because they pose a potential risk. Be sure to keep the criminal report and document the reason you denied their tenancy in case you encounter a fair housing dispute.

Keeps Tenants Away that Might be Trying to Hide a Shady Past

By requiring a background check you are making it clear to applicants that you will investigate their history to make sure they are a good fit for your property. This will discourage those who might be trying to hide something. If you notice that the applicant stops replying to your messages or calls after you make it known that a background check is required or if they will not authorize the background check, you should not pursue the applicant any farther. These are red flags and could be a clear indication that they are not longer interested or they are trying to hide something. Just because an applicant refuses to authorize a background check, does not mean that you should waive the requirement. Thorough tenant screening should not be altered for anyone— it could violate the Fair Housing laws if you make exceptions for one applicant but not another. If they are trying to hide something early on, it is likely that they will cause problems in the future. By requiring a background check, you can discourage problematic applicants from applying.

Get Long Term Tenants

Background checks convey the message that you will investigate their past thoroughly to ensure that they will be a reliable and responsible tenant. Rigorous tenant screening helps bring in higher quality tenants that will be more apt to stay for the long haul and renew their lease. This will save you both time and money because you won’t have to list your property, find more applicants, conduct another round of background checks, and get a new tenant.

How Does a Background Check Work?

Companies like TransUnion provide background check information. Once the applicant authorizes a background check, TransUnion will search multiple databases to make a connection between the identity information provided and their criminal history. Criminal records require a persons name, date of birth, and current address, as well as, any address they’ve lived at in the past four years. Criminal reports are made public and for that reason, they do not include social security numbers. Social security numbers aren’t used in the database scan are this poses a risk for identity theft. However, applicants should still provide you with their SSN so that you can verify that they are who they say they are. You might also ask for their middle name to broaden your search and dig in deeper. To begin a background check you will need the applicants approval and their name, date of birth, address, and social security number. Accurate background checks will gather data from all reputable sources. These include…

  • Felonies and misdemeanors from local and state jurisdictions
  • Sex offender registries nationwide
  • Federal Data from sources that include the DEA, FBI’s Most Wanted, Homeland Security, US Marshals Most Wanted, ATF Most Wanted, US Secret Service Most Wanted Fugitives, and the US OFAC
  • Data from nearly 700 resources that cover criminal, sex offender, and eviction records with almost 300 million criminal records.

Reviewing Tenant Background Checks

Even if your applicant does not have a criminal record, you should still take into account all the information you have gathered during the screening process before you decide to make the applicant your tenant. While no criminal past is a good thing, there are other red flags to look for. However, if your applicant does indeed have a criminal history, you should a take into account these things…

  • Recency – When did the crime occur? Depending on the severity, a crime that occurred five years ago might not be as important as one that was committed a couple months prior.
  • Severity – More violent crimes should be a larger red flag. Minor crimes might be overlooked.
  • Frequency – If the applicant has committed multiple crimes, you should be more alarmed than of the applicant has only committed a single crime.
  • Relevance – You should be worried about a history of violent crimes, assault, theft, trespassing, vandalism, shoplifting, arson, illegal possession of a weapon. Speeding tickets aren’t something that you should really have to worry about as a landlord.
  • Legal Considerations – In some cases, those with a criminal past had legal restrictions they must follow. For example, sec offenders are not permitted to come near schools and parks. If you discover that the applicant is a sex offender, you should find out if they have any legal restrictions that would not make them a suitable tenant for your property.

In some cases, landlords are willing to overlook a prospective tenants criminal past if they are able to explain their situation. And while it is good to hear their story, do not be swayed if they have a violent criminal history. Ultimately, when it comes to making a decision based on the criminal background check is up to the landlord and they should take into consideration and legal obligations or risks.

Why are Background Checks Important to You as a Landlord?

Tenant background checks are a good indicator of problematic behavior. You can avoid things like violence and legal trouble by conducting thorough tenant screening. Over half of landlords feel that background checks are more valuable than credit checks. Background checks are useful in maintaining the safety of the community where your tenant will reside; credit reports show how financially responsible the tenant has been. And although one might have more value, they are both important and both should be conducted. Thorough tenant screening will require a background check and credit history report. These are important to becoming a successful landlord.

Having a property management company handling your rentals will help you to live a more enjoyable life. You’ll have less stress, more free time, and essentially more freedom.

Contact us (866-500-6200) for more information today!

—

About Real Property Management Midwest

We are local property management experts serving Cincinnati, Dayton, Columbus, & Louisville. We manage Single-Family Homes, Apartment Buildings, and Condos. With years of experience, Real Property Management is Cincinnati, Dayton, Columbus, Louisville and Northern Kentucky’s #1 Property Management and Leasing Company.