Before You Decline a Tenant, Read This

Tenant background screening is an important part of maintaining a rental community. After all, everyone appreciates when new tenants have a clean criminal background and landlords appreciate tenants who pay their rent. There are some important concepts to keep in mind before, during and after you run a background check for a tenant’s credit and criminal history.

Make Sure You Get Permission

Most states will require landlords to get permission to run a background check, and many landlords will ask tenants to pay a small fee to cover such checks during the application process. This is fairly common practice, but it’s important to make sure that landlords are receiving written permission to check a tenant’s background.

In the form the tenant signs, you should outline specifically what you’re looking for. If you plan to order a landlord credit check that also includes a criminal background check and review against the Federal database of terror suspects, you should state that you’ll be running those checks to be sure the potential tenant isn’t confused later.

Never assume your potential tenant understands what online background checks will reveal.

Outline The Violation

You must be clear with a tenant about why you’re declining their application if you don’t want to be sued later for discrimination. You’ll need to provide the potential tenant with a copy of the background/credit check you performed, as well as a written statement outlining the issues that caused them to be declined.

Also, stop and check that you’re actually viewing the correct records. While background checks strive for accuracy, they are pulling from other databases that may not scrutinize entries as closely. In some cases, mistaken or misspelled names go uncorrected. If you feel the tenant has such a situation, be sure you allow them an opportunity to explain themselves and recommend they attempt to re-apply when the problem has been solved.

It’s helpful to establish some red flags that automatically ensure disqualification, that way it’s much easier to inform the candidate of why their background check isn’t going to fly. For example, disqualify all candidates with an eviction on their record. This is a fairly understandable reason for rejecting a candidate, and one they can work on with a co-signer or just by letting time pass.

Final Thoughts

The best thing you can do when you’re attempting to run a background check for potential tenants is to establish ground rules. Figure out what your ideal tenant looks like, and which qualities you’re not willing to settle for (such as excessive debt, bankruptcy or criminal behavior).
For more than 33 years, Tenant Screening Services, LLC has helped landlords and employers to check the backgrounds of employees and potential renters.