What is a tenant? Why do I need to conduct a background check on them? And who should conduct the tenant screening?
What is a Tenant?
A tenant is an adult who has signed a lease or rental agreement (or has an oral rental agreement) with a landlord to rent property, such as an apartment, condo, or house. The tenant has a legal relationship with the landlord that creates various responsibilities for both parties. The tenant is also referred to as the “lessee” of rental property. The tenant may use and occupy the rental property as longs as she/he complies with the terms and conditions of the rental agreement, including, but not limited to, the payment of rent. In every state, tenants are afforded certain protections under the law.
Why do I need to conduct a background check on my tenant?
A tenant must be thoroughly screened before leasing your property to her/him. Whether you own an apartment complex, a number of duplexes, or even a home or two, knowing exactly who your tenants are is paramount. Conducting a proper tenant background screening can save you hundreds if not thousands of dollars. A tenant credit check will indicate whether your tenant pays on time or if at all. A tenant screen will indicate whether you are renting an owner’s dream or a nightmare.
As a property owner, it is always better to be safe than sorry. Tenant screenings provide owners with a certain level of security and help deter undesirable situations. This is why choosing the right background service is so important. Most background screenings are relatively economical, however, one must consider the quality and the know-how of the screening company.
A thorough background screening should include criminal history, evictions, and a credit check. There are a number of ways to obtain these reports, but the fastest, most cost-effective, and best method is through an online company. The pricing usually ranges between $25 to $100 depending on the depth of your report.
Who should conduct the “tenant screening?”
The key to finding the right background screening service, or tenant screening company, is simply to research. Seek out ones that follow the law and regulations when it comes to conducting background checks. Avoid shady firms as they can lead to getting you into some pretty hot legal water. Violating the Fair Credit Reporting Act or a Consumer’s Right to Privacy is something you want to avoid at all costs.
Make sure the background screening service:
- Has a valid business license
- Possesses a clear and concise pricing
- Defines their total process for protecting sensitive information
- Has proper paperwork for needed consent and release of information
- Verifies the name of the applicant, DOB (Date of Birth), and Social Security Number (SSN)
- Follow all the laws pertaining to the Fair Credit Reporting Act
- Searches Circuit Court and County Records for every county the potential tenant has resided in for the past five years
- The screener has customizable services such as Patriot Act Terrorist Watch List searches, Office of Foreign Assets searches (OFAC), and landlord reference searches
- Verifies the accuracy of your completed report
Conducting background screenings is not a negative thing. It is not used to cast judgment on the character of potential tenants, however, it should be used as an indicator as to what type of tenant you’ll be renting your property.
Gravitas Investigations offers tenant screening that includes: Credit History, Evictions, Criminal Backgrounds, and much more.
Tenant screening is a proven way of evaluating potential tenants, their ability to fulfill the rental terms, provide the necessary care of the property, and pay the rent timely.
Perfect tenants guarantee the landlord’s long-term financial stability and peace of mind, the property’s good condition preserved for the next residents, and the neighborhood’s safe and favorable atmosphere.
A comprehensive tenant screening provides the landlord with a detailed report of a prospective tenant’s story, with a specific focus on credit score (or credit range), criminal record, and eviction precedents.
Whether the property owners decide to carry out tenant screening on their own or use the services of reputable tenant screening companies, the whole process starts with the potential tenant filling out an application form. In the form, the applicants give their personal details, which allow identity verification, their preferences, reference information, and, most importantly, they authorize the procurement of a tenant screening report. Without the tenant’s written consent, it will be impossible (and illegal) to collect any confidential credit information. At this point, it is also important to ensure that the same information is required from all the tenants and no discrimination is taking place. The appropriate questions will be about employment, current and previous landlords, banking information, and, in certain cases, income.
Sometimes, people in search of a new accommodation order the so-called “tenant-initiated” screenings and then bring them to the prospective landlord. This may be a good sign indicating responsible tenants, as they do not have the possibility to modify the screening report provided by a consumer-reporting agency. However, working with a professional, qualified tenant screening company of your own is the best avenue. Why? Because having a team of your own dedicated investigators checking the background of your tenants ensures you’ll get the most accurate and reliable results.
Consumer reporting agencies, which specialize in credit history, most people would like to know where the information comes from and how credible it is. CRAs are regulated by the Fair Credit Reporting Act and collect information from public records with the aim of providing an adequate recommendation based on the landlord’s criteria. The credit score (or range) of the tenant is normally taken from one of the three national credit bureaus Experian, Equifax, or Transunion. The agencies also check the tenants on sex offender search, terrorist watchlist search, national and county criminal search. Thе eviction history comes from public landlord/tenant court records. Some property owners report that the criminal and eviction background check results varied depending on how many of the neighboring counties were checked. Taking into account that not all local records may already be online, this is the point to pay special attention to. Gravitas makes sure we check all previously lived in counties from each tenant.
The Perfect Solution
One more legal detail for landlords to remember is that when they make a decision of denying the applicant or approving him or her conditionally (with an increased deposit or cosigner), the applicant has the right to know the agency which compiled the tenant screening report and see a copy of it. The applicants can also dispute the accuracy of the report provided.
Nowadays, a thorough tenant screening is behind the majority of landlords’ approvals. Tenant screenings have become prompt and affordable, keeping the property owners away from potential risks and ensuring the security of investment.