Landlord Advice: How to Conduct Tenant Verification

Applicant screening is one of the most critical steps for every landlord and property management company to undertake. Screening an applicant is the best way to determine if they are a good credit risk for your apartment or community. Regardless of the number of apartment units that you have available for rent, you'll want to utilize at least some of the many different processes that are available to you.

The first thing you must determine is if you're going to screen all of your applicants yourself, or if you're going to use a resident screening company. If you'd rather not perform the approval process manually, there are several screening companies that specialize in the apartment industry who, for a fee, can be contracted to execute at least part of the screening process. Regardless of how your applicants are screened, you'll want to make sure that the following items are evaluated.

1. Credit Check: Be sure that your application informs the applicant that you will be checking their credit, and that they've signed off on this step. You will need to predetermine what your company philosophy is going to be in regards to how you interpret tenants' credit histories. For example, some property management companies do not count medical bills against their applicants. However, most companies do have a guideline in place that prohibits applicants from becoming residents if they owe money to the utility companies who service the community they are attempting to move into.

2. Landlord verification: This should be verified by sending a release form, signed by the applicant, to his current or previous landlord. Be sure to avoid asking questions that violate local and federal Fair Housing laws.

3. Employment verification: This can be verified either through pay stubs, a letter from the employer on company letterhead, or a phone call made to the employer.

4. Criminal Background: Not every landlord or property management company undertakes this step of the verification process, but most industry experts encourage it. Again, you'll need to determine your company philosophy regarding which crimes are forgivable, which crimes are forgivable after a pre-determined number of years, and which crimes are never forgivable. If you choose not to do a complete criminal background check, you might want to consider at least running a sex offender registry check. As with the credit check, be sure that the applicant has been informed in writing that a criminal background check is part of the verification process.

There is, of course, a cost involved with running a credit check and a criminal background report. Many companies have a written rule in place that they don't run a criminal check if the credit check fails to meet their specified criteria.

Fair Housing laws, which are applicable in almost all rental situations in the United States, require you to screen all of your applicants in the same way. So once you've determined the process that you'd like to use, it's imperative that you use it across the board. If at any point you decide to change your screening criteria you must document the changes, along with the date and time, in writing and keep a copy of it on file. This will help you if a Fair Housing discrimination suit is ever filed against you.

Good luck and happy renting!


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