In a perfect world, every landlord would have the perfect tenants that pay rent on time and leave your property undamaged, but this doesn’t always happen. At first, a prospective tenant might seem like the ideal candidate but once they’ve moved in and are settled, can prove otherwise. To help avoid any issues, thoroughly screening your tenants before they sign a lease is crucial.
As a landlord, screening potential renters will take a little extra time and effort on your part, but the reward is well worth it.
What is tenant screening?
Tenant screening refers to the process through which landlords or property managers evaluate and assess potential renters before allowing them to rent a property. The purpose of tenant screening is to identify reliable and responsible tenants who are more likely to fulfill their lease obligations and maintain the property in good condition. It helps landlords minimize risks associated with renting their property and ensures a smooth and trouble-free rental experience.
The first thing for all landlords, property managers, and brokers to remember when screening tenants is fair housing compliance. You must become intimately familiar with fair housing requirements because tenant screening can present a lot of potential liability for discrimination claims. The most fundamental requirement is that all tenant applicants should be treated equally, and screening policies and procedures should be applied uniformly regardless of whether the applicant is a member of any protected class under the Fair Housing Act. If one tenant applicant is required to provide a credit score, for example, then all applicants should be required to do the same.
Screening tenants checklist
1. Request a screening application for tenants
Having all potential tenants fill out a rental application is a great way to learn anything you need to about the tenant. Consult the Realtor Association for a current rental application form. Using the Association form will ensure that you are not asking for information that could be considered protected under the Fair Housing Act. These forms are regularly updated to keep up with any changes in the law.
In addition to this information, be sure to state that if needed, a background check, criminal history check, and credit check will be completed. The rental application is also a good place to request authorization to access financial, employment, and personal history.
What to Look For:
- Employment history – How long has the individual been at their current job? Do they tend to switch positions frequently?
- Current income – Does the current income of the tenant cover the rent and regular living expenses?
- References – What feedback does the tenants references have about them? Did they pay their rent on time? Are there any red flags?
- Occupants – How many occupants will be living in the unit? Do they have pets?
Keep in mind that although a landlord is looking for information about a prospective tenant’s income to ensure they can afford the rent, it is illegal for a landlord to discriminate based on the prospective tenant’s source of income. This means that a landlord cannot deny a tenant applicant simply because they are the recipient of state or federal housing such as the Housing Voucher Program also referred to as “Section 8.”
2. Run a Credit & Background Check
With the prospective tenant’s consent, running a credit check will give you a better idea of the tenant’s financials. If they carry any hefty debt, have a history of late payments, or have unpaid balances, you’ll be able to see this information and how it relates to paying rent on time.
A background check will provide you with details pertaining to evictions, criminal records, and public records, which are all helpful when it comes to deciding whether or not the tenant has potential to be an issue in the future. Landlord’s should be cautioned against automatically rejecting an applicant with a criminal record. According to the federal agency HUD, landlords cannot have a blanket policy excluding all applicants who have a criminal background. Decisions should only be made on a case-by case basis.
3. Contact Previous Landlords
Assuming the potential renter provided you with references for past apartments, giving them a call will give you a better sense of the tenant as a whole.
Screening tenant questions:
- Does the tenant owe outstanding rent?
- Does the tenant have a history of paying rent late?
- Has the tenant caused excessive damage to the property?
- Would you ever rent to this tenant again?
4. Contact the Tenant’s Employer
Contacting the tenant’s listed employer will help you confirm that they have a steady, reliable source of income. If you do not feel comfortable contacting the employer, ask the tenant for a copy of a recent pay stub before having them sign a lease.
5. Interview the Tenant
Once everything checks out, give the tenant a quick call and perform a short phone interview to get to know them a little better. This is also a great way to start open conversation before they move in.
Questions to ask your potential tenant:
- Do you have pets? How old are they and are they house broken?
- Do you plan on having any roommates?
- Do you work a 9-5 or do you have odd, unpredictable hours?
- Do you smoke?
- Will friends or family members be frequently staying the night?
How long does tenant screening take?
The duration of tenant screening can vary depending on several factors, including the efficiency of the screening process, the responsiveness of the applicant and their references, and the availability of screening services. On average, tenant screening can take anywhere from a few days to a couple of weeks. Always use a professional tenant screening company. They will be well versed in the legal requirements through all the steps in the process, including providing notice when an applicant is denied because of a credit issue.
Know the tenant screening laws in MA
Finally, it is important to pay close attention the Massachusetts law that prohibits a landlord from charging (prior to the commencement of a tenancy) a tenant any fees outside of the cost of the first month’s rent, last month’s rent, a security deposit, and a fee to change to key and lock. Pay close attention to how a tenant is changed for any fee that is related to the screening process and make sure those changes are not coming from the landlord.
Not ready to handle the tenant screening process? Let our team at Lamacchia Property Management help. Give us a call today to learn more at (855) 213-3410.