The tenant background check
Life is so much better when you do tenant background checks right
You can do a proper tenant background check and save yourself thousands of dollars and an immeasurable amount of stress.
Or you can just skip it and live life on the edge.
If you prefer the former, and want to enhance your chances of getting good tenants who won’t make your life – and your property – a mess, you need to know who will be living in your property.
Gerald, Esquire, a legal Expert on JustAnswer who has also been a landlord, frankly told a customer:
I can tell you that a good tenant is the greatest blessing and a bad tenant is horrible … do your background check. Make sure you do a criminal and a credit check.
Don't be a softy. Second chances are nice, but not worth the risk. If they have a recent bad background and no history of being productive and steady, pass.
If you can’t trust a lawyer-landlord to steer you right, who can you trust? The bottom line is that a background tenant check provides peace of mind not just for you, but for your other tenants and the surrounding neighborhood as well.
Why you absolutely should perform tenant background checks
Even if you weren’t concerned about your tenants’ safety for their own sake, you’d want to protect yourself from liability. According to an online credit report agency, 22% of tenants who authorized a background check during the rental application process had a criminal hit on their record in 2015.
Imagine what that means for everyone concerned, including you. One JustAnswer customer turned to an Expert after being assaulted by a neighbor, resulting in a broken arm, surgery to insert a three-inch steel plate, time off work, and being afraid to return and having to stay with family.
On top of that, two days later his apartment was vandalized and robbed! The Expert’s opinion on his options regarding his landlord:
You can file a premises liability claim for the robbery and assault that happened because of the landlord's lack of security or background checks of its tenants.
It’s important to know that ignorance of a tenant’s violent or criminal background is not an excuse – failure to perform that background check won’t get you out of trouble.
Another reason you really, really need that tenant background check is that it gives you legal support in case you reject an application. Federal Fair Housing Laws state that you cannot deny an applicant based on discriminatory factors such as age, gender, national origin, and the like, so you must be able to prove that you rejected an applicant for credit or criminal history reasons.
Finally, requiring a tenant background check every single time helps weed out the really bad actors. Most of these people will disappear on you when you communicate the need for the background check, and others will refuse to authorize it.
In either case, don’t bother following up with a disappearing tenant, and never, as the Expert said above, be a softy by waiving the background check! These tenants have just done you a favor – accept it gratefully.
Finally, on top of helping you screen out bad tenants, protecting yourself and your other tenants, and giving you legal support under the Fair Housing Laws, tenant background checks can save you thousands in case you have to evict: The average cost to evict a problem tenant, including attorney fees, can exceed $10,000, according to Landlordology.com.
And no, there’s no way to legally evict a tenant without going to court, so hoping for that outcome instead of performing or paying for a tenant background check is simply penny-wise but pound-foolish.
What should a tenant background check include?
There are essentially three parts to a proper tenant background check: A criminal background check, a credit check, and your own interview of the tenant.
Here’s how it should work.
First, create a complete rental application. It’s a good idea to use a template, which is widely available on the Internet, to make sure you’re asking all the necessary questions. The application should include a request for authorization of both the criminal check and the credit check.
It should also ask for the applicant’s name, date of birth, address, and, if desired, Social Security number. Many landlords debate the need for the SSN just for applicants, before they become tenants, because of the stringent need to protect that information.
And you don’t need the SSN to pull a credit report from the credit reporting companies, or even for having a background check done – all you need is an email address and the tenant’s agreement. SSNs are no longer recorded in public court documents due to privacy concerns.
If you do want the SSN, you can require it only once you’ve agreed to rent to the applicant, to minimize the number of SSNs you have to store and protect.
Next, it’s time to interview the applicant.
Among other things, such as personality and lifestyle, you want to seek out red flags during the interview. This means you should also ask your tenant about his or her criminal and credit history. If the applicant is honest with you about something that’s going to show up on these reports, that’s a good sign – and the opposite if they try to hide it.
If there is a criminal history, you can ask the applicant to explain it. Many landlords are willing to overlook minor infractions, or ones that occurred many years ago. You’ll also want to cross-check the references given by the applicant, such as looking up an employer’s phone number yourself in case the applicant simply supplied a friend’s number.
Be sure to ask the applicant if he or she has pets, their ages and sizes, and whether they’re housebroken. You also want to know about smoking habits, work schedules, and whether there are friends or relatives who might spend the night frequently.
The credit report
Whatever you decide about collecting SSNs, you can pull the credit report yourself for a fee (which, in some states, can be charged to the applicant), or have a third party do it for you.
In the credit report, you’ll be looking for things such as:
- Credit history: Look for a history of late payments, collection accounts, charged off credit card accounts, or major issues such as bankruptcy. One or two late payments do not necessarily imply a bad tenant, but a bankruptcy probably does.
- Current debt: Large loans, maxed-out credit cards and large unpaid credit card balances may mean an applicant will have trouble making the rent.
You can also contact previous landlords yourself to find out if there was a history of late payments. Finally, contact the applicant’s employer to verify information in the application form.
The criminal background check
For the criminal background check, you’ll have to ask a third party to perform it unless you want to spend hours scouring dozens of databases filled with thousands of records. When you launch a background check you need only the first and last name, plus the date of birth. It’s helpful to have previous addresses or a photo in the case of a common name.
A thorough criminal background check includes data from the following:
- Felonies and misdemeanors from state and local jurisdictions (keep an eye out for previous evictions as well as criminal matters)
- Sex offender public registries from the states and DC
- Drug Enforcement Administration
- FBI’s Most Wanted
- Homeland Security
- U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
- U.S. Marshals Service
- U.S. Secret Service Most Wanted Fugitives
- U.S. Treasury Office of Foreign Assets Control (OFAC)
Again, you can go the extra mile here by checking with previous landlords yourself to find out if there were any issues that might not have made their way into public records. You can also find out if there was any property damage, or problems with neighbors.
If your applicant has a criminal history, you should take several things into account. One, if a crime happened a long time ago, it may be less important to you.
Two, you’re looking for things like assault, theft, trespassing, vandalism, shoplifting, arson and so on – not speeding tickets or underage drinking.
Also, a single incident may not trouble you as much as multiple arrests. Remember that some people, such as registered sex offenders, are not legally allowed to live in certain areas.
Obviously the contents of a criminal background check and credit check are yours to weigh, as there are few hard and fast rules, and your decisions will depend on the kind of tenant you’re seeking and the community where the property is located.
You can always consult experts by searching the internet for landlord websites. And of course, if you have any specific questions for which you need answers, the real estate and landlord-tenant legal Experts on JustAnswer are available at any time of day, without making an appointment or paying hourly fees.