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Importance of implementing a tenant screening process

Jul 13, 2020 MicroBilt News

Importance of implementing a tenant screening process

As property owners scope out renters, it is vital to their business that they implement a tenant screening process to ensure potential tenants are qualified to rent a space. Without a proper vetting process in place, landlords risk renting to people who won’t pay their rent or take good care of the property. With the COVID-19 pandemic still ongoing, landlords face added challenges when looking to find great tenants because, while they need to keep their spaces occupied to run a sustainable business, they also want to be sure everyone is safe throughout the rental process. Screening tools can help to accomplish this.

Formal vetting processes landlords can conduct

Property managers and landlords are allowed to perform several different types of screenings to vet out potential tenants. For instance, they can search records, including:

  • Civil records to see if the applicant has had any bankruptcies, liens, judgments, evictions, or suits which can provide insight as to whether they’d be a reliable tenant.
  • Criminal records to determine if tenants have a history of criminal activity.
  • DMV records to help validate applicant-provided information is accurate.
  • Employment and education to assess the validity of an applicant’s employment and education history.

Let the candidate know background screenings will be performed. Additionally, many property managers and landlords run credit checks as well. They must get permission in writing prior to conducting a credit check.

Informal vetting processes landlords can take

Even if a tenant passes the formal screening processes, it can’t hurt to use alternate methods to help assess if they’ll be good tenants. To adhere to Fair Housing rules, be sure to ask standardized questions to all tenants.

  • Ask the potential tenant if they have pets so they can be informed of any pet policies or additional charges.
  • Inquire if the applicant plans to have a co-applicant or co-signer so they can be screened as well.
  • Make sure all questions on standardized applications are answered. Omissions might be a red flag the tenant is trying to hide something.

Property managers and landlords can also contact previous landlords to find out if the tenant paid their rent on time, took appropriate care of the property, and got along with their neighbors. (i.e. Were many complaints filed against them?)

Making a decision after screening

If negative screening results surface, landlords can give the applicant a chance to explain. It could be the problem was fixed or there may have been extenuating circumstances. Any amount of information gathered can be useful in the decision-making process. Landlords and property managers who want to deny an applicant must ensure they stay within the confines of the law. Legal reasons to deny an application include:

  • Income cannot support the rent.
  • Payment history is unfavorable and credit score is poor.
  • Work history isn’t sufficient or is unverifiable.
  • Previous rental history shows a problem with evictions, paying rent on time, or having problems with neighbors.
  • Criminal history shows the candidate may be a potential risk.

It’s important to remember that when using screening processes to treat each candidate equally in the vetting process. When checking credit, be sure to adhere to the Fair Credit Reporting Act.

MicroBilt has been helping businesses assess and manage risk for more than 40 years. To learn more about our comprehensive screening tools, contact us today.