Most owner/managers do see the need for credit checks to help them
choose a good resident, who has the ability and willingness to pay
bills on time....but background checks? What's the reasoning behind the extra cost?
Some owner/managers use background checks for the same reasons that
employers use background checks. The rational is that it will make the
community a safer place and limit liabilities of the owner/manager, by
not letting dangerous people into the residence. But tread very
carefully here, be sure that people who have paid their debt to
society are treated fairly and within the law. Read up on Fair Housing and protected classes to avoid discriminatory actions.
The Law
An owner/manager does have the right to have a background check done on
a possible renter.
You must comply with Fair Housing Laws and Fair
Credit laws. There is information available on this site or you can go
to www.ftc.gov.
Things to Know
Fair Housing Law: be sure you treat all classes of people equally.
Fair Credit Law and the state laws designed to augment the Federal Law
The rental applicant must
give written permission for a background check and a credit check,
generally found on rental applications near the applicant signature. If your application is not signed, you should not but a credit or background report until it is signed and dated.
A background check: you must be consistent and do this for all applicants, if you do this at all.
Application Fees:
Some states limit the amount an owner manager may charge an applicant.
The maximum charge allowable may not cover the cost of both a credit
check and a criminal background check.
Too Much Knowledge?
What are your screening criteria? If you find an
applicant has a background and they have already paid their debt to
society, should you reject them? After all, Fair Housing is likely to
have a serious problem with an owner who rejects all applicants with a
criminal background. If you don't and your tenants find out, how will
they react?
What Should You Do?
Screening
criteria are designed to find a quaility tenant that pay rent on time, wont abuse property or other residents.
Develop a screening criteria that respects Fair Housing and State laws
Apply your tenant screening criteria equally and consistantly...always.
Document
If you run background checks as policy, run it for those that have first passed all your other criteria. Its costly to run a background report on those applicants that have not passed the other screening criteria.
