conducting tenant background checks

More than half of landlords believe tenant background checks are more important than credit checks. It’s easy to see why. While it is necessary to try to gauge whether the prospect is reliable and financially responsible, a background check is a safety measure used to find out whether the individual is likely to do harm to your other tenants, your property, or yourself. By performing background checks, you are taking an essential step to weed out undesirable candidates, protect yourself from future landlord-tenant disputes, and fulfilling your responsibility to help keep your community safe.

Components of a Background Check

A comprehensive background check looks into various aspects of an applicant’s history. Information obtained in a tenant background check includes, but is not limited to the following:

  1. Eviction History

If your client has a history of removal from previous rented residences, this should be a giant red flag. A tenant with past evictions is likely to repeat the same behaviors, warranting future eviction. For this reason, landlords find eviction history to be one of the most telling items on a background report.

  1. Financial History

This can go well beyond a credit report to include employment history and collections history. It usually takes some time for an account to go to collections. If this shows up on the background check, it shows a history of making late payments.

  1. Criminal Record

A potential tenant’s criminal record informs you whether the individual has ever been convicted of a crime. It also includes information about sentencing, as well as arrests and charges that may or may not have led to convictions. It also informs you about the type of crime that was committed. Of particular concern are violent crimes and property crimes, such as theft.

  1. Public Records

Public records include information regarding finances, such as tax liens, bankruptcies, and civil judgments. A civil judgment means that someone else brought a lawsuit against the individual, and an unsuccessful defense resulted in a judgment against him or her. This information pertains not only to finances but also gives a fuller picture of the applicant’s criminal record.

Benefits of Tenant Background Checks

You may worry about offending prospective tenants if you ask them to submit to a background check. However, in many cases requiring a background check is likely to make your property even more attractive to an applicant.

Think of it from the prospective tenant’s point of view: He or she doesn’t want to live in a place that isn’t safe. Knowing that you require background checks indicates to an applicant that you care about the safety and security of your property. It also means that you have carefully vetted all the current residents on the property.

In fact, the tenants most likely to resist your requirement for a background check are the ones you don’t want on your property in the first place. A refusal to authorize a background check indicates that the individual may have something to hide. In many cases, once such an individual finds out you require background checks of all applicants, he or she may proceed no further in the application process or refrain from applying in the first place. Therefore, background checks help you screen potential tenants even before obtaining any information.

Denying Applications

Knowledge is power when it comes to deciding who is going to live on your property. Any time you deny an application, you must provide a written explanation as to why and demonstrate that it was not on the basis of discrimination but because of a reasonable concern that the person represented an actual threat to your property and/or your other residents. The more information you have available, the more detail you can give for the rejection and the stronger case you can make in the event that someone does bring legal action against you on the basis of fair housing laws.

If one of your tenants commits a crime on your property and you didn’t conduct a background check to find out if he or she had a criminal record and posed a potential threat, you could be held liable for any damages that result. Failure to perform a background check could be interpreted as negligence, an actionable civil offense.

Due Diligence

Above all else, you must protect the safety of not only your residents but your community as a whole. Do your due diligence and don’t knowingly rent a residential unit to someone who puts others at risk of harm. In 2015, the number of applicants who had a hit during a criminal background check was more than four out of five. While not necessarily disqualifying, this is information you need to know.

A history of violent crime indicates he or she may have a tendency to escalate disagreements with you. By performing tenant background checks, you are taking a step to protect yourself as well as your residents. Contact Beau Dietl & Associates today to get started.