Tenant Background Check
Leasing your housing property to a stranger can be risky. However, the danger can be less if you have useful insight into the foreigner's past and current state. A tenant background check affords you this privilege.
It exposes key areas of the life of an interested occupant. This is required to safeguard your property and housing investment from misuse. By having insight into the tenant screening report, tenant turnover can be reduced. It also reduces the hassle of frequently searching for another set of renters.
This important process of tenant background screening on a housing rental helps filter the quality of lessees you acquire. This article will guide you on executing tenant screening and what key things to look out for in your potential renters.
(also read: Understanding the Role of a Cosigner in Property Management)
Types of Tenant Screening Background Check
Certain data are non-negotiable in a house leasing contract. Information like name, source of income, nationality, and next of kin is basic required information. It enables the establishment of a lease agreement.
However, certain information is not commonly disclosed by potential tenants. These must be sought out to ensure no losses in the middle of the contract. They are:
1. Tenant Credit Check
Before anyone should desire to rent a home, there must be sustained capacity to do so. This capacity can be seen in the credit history of the interested inhabitant. The tenant credit check gives house owners a comprehensive insight into the tenants' earning capacity.
It also speaks on spending habits, loan history, and repayment frequency. This information can help you secure quality individuals as renters and also help filter out the potentially stubborn ones.
2. Tenant Criminal Background Check
You don't want to disobey the law by harboring a fleeing criminal. A landlord has the right to know if the interested renter has committed a crime and was sentenced to prison. This ensures accountability, transparency, and non-ambiguity in a leasing contract.
3. Tenant Employment Verification
Since only working persons can afford a lease rent, house owners have the right to verify employment claims. Proof of appointment letter or statement of employment from a potential tenant's employer can be requested. This is to prove this claim and ascertain their ability to pay for their rentals comfortably and when due.
4. Tenant Rental History Checks
Conducting a tenant background screening on their rental history also helps identify erratic individuals. You need to know the reason for their departure from their former places of residence. This can give amazing insight into their character and help screen out troublesome individuals.
5. Social Media Screening
Social media is a common area recently adopted to gain insight into a potential tenant's life. The media space constitutes a major aspect of the modern person's daily activity. So, you can easily surf through their social media accounts. This will help you better understand who they're dealing with.
This information makes up a tenant screening report. It can also be used to determine whether to continue with a leasing contract with a potential occupant.
Why Conduct Tenant Background Checks?
A rental background check is not a legal requirement for establishing a lease contract. Tenant background screening helps prevent avoidable pitfalls. The process could be demanding, but it is certainly rewarding. These benefits highlight the tremendous importance of conducting a thorough renter background check on each potential tenant:
1. Reduces Risk Of Property Damage
You will get an idea of why a tenant left his or her former residence when you have insight into their rental history. Violation of the lease agreement or irreversible damage to the rented property can be the reason. Whatever the reason may be, it can better inform you on whether to proceed with the contract or end it before it starts.
2. Minimized Risk Of Nonpayment
Nonpayment or delayed renewal of rental fees is a thorn in any house owner's flesh. You can determine if a lease buyer is fit enough to rent a space in your house by looking into their credit history. Their employment history can also give you more information.
This helps to greatly minimize the risk of nonpayment of rent. It also reduces abandonment of housing property due to the inability to renew the rent fee.
3. Enhanced Safety And Security
You need to gain sufficient information on the financial capacity, management, and reputation of a renter. Your mind will be at rest on the issue of housing maintenance and rent renewal.
4. Compliance With Regulations
Conducting tenants' background checks saves you from a truckload of legal complications. Criminals with a record of drug smuggling can be avoided. Individuals with a history of rape or security assault can be filtered out too. It ensures the safety of their neighbors and eliminates court cases.
What to ensure in every tenant background check
Although background checks are highly necessary, they must be carried out with every sense of respect for the tenants. In the course of this process, their privacy could be invaded. They may feel offended, which could spark legal issues. This is why certain guidelines are laid to ensure that landlords do not cross the limits and interested tenants comply.
Some important things to take note of when conducting your tenants' background check include:
1. Consistency In the Screening Process
Have a document that outlines the process of your background check. Also, ensure it's consistently used for every tenant you screen.
2. Compliance With FCRA Regulations
The Fair Credit Reporting Act (FCRA) contains detailed guidelines on how to use consumers' information correctly. Ensure to follow it to the letter and let your lessees be aware of your compliance.
3. Transparency
Be clear and explicit about what you plan to use the demanded information/document for. Your intending tenants have the right to know why you're demanding their private details.
These processes require a high level of professionalism and knowledge. A real estate manager or property management agency is better positioned to handle the process. They are equipped to ensure that your tenant's background checks are carried out thoroughly while following the strictest regulations.
(also read: Breaking a Lease: What You Need to Know)
Criminal Background
Running a criminal background check on potential tenants is a crucial step in the screening process. It helps ensure the safety and security of your property and tenants. This is why we put up this complete guide on how to run a criminal background check on a tenant effectively.
We would also like to stress that a criminal history record does not necessarily condemn a person. Some cases are too minor to be considered. While some comprehensive cases are things of the past. Nevertheless, you need to have your criminal records checked and make an informed decision.
What is a Criminal Background Check?
Let's start with what a criminal background check is. A criminal check is the process of determining if a tenant has a criminal record. Criminal check result is mostly used by employers and landlords. They use it to determine the character of the potential tenant.
Most landlords use criminal checks to determine a tenant's suitability. Here are the key parts of a criminal background check:
Key Components of a Criminal Background Check
Here are six (6) components of a criminal background your you should look at:
Crime Records:
- Arrests: Facts about past arrests. This includes the dates and charges.
- Convictions: These can be details about convictions. This includes the nature of the crime and the sentence. It also includes the jurisdiction where it occurred.
- Felonies and Misdemeanors: Felonies are offenses that are more grievous. Misdemeanors are less grievous crimes. A wise landlord knows what to let go and what to hold against the tenant.
Sex Offender Registry:
- Listings: Check if the person is listed on a sex offender registry. This is vital, especially for homes with vulnerable neighbors.
Incarceration Records:
- Prison Time: Information on whether the individual has served time in prison. This includes how long they stayed there and the nature of the crime.
Pending Charges:
- Ongoing Cases: Learn of any charges that are currently pending against the individual.
Probation and Parole:
- Supervision Status: Details about any current or past probation or parole status. Learn if they are on parole. It helps you manage your risk.
Warrants:
- Active Warrants: Information on any outstanding warrants for the tenant's arrest. Check if he or she has been declared wanted.
Sources of Information
When you run a criminal background check, you aim to get as many vital details as possible. To achieve this, the background check pulls data from all levels of jurisdiction. Crimes occur in different states and vary from one another. That's why we need to expand your coverage when you run your check:
Local Database:
- Police Departments: Local police keep logs of arrests, charges, and sometimes convictions in their city or county.
- County Courts: Local courts handle suits of minor crimes, preliminary hearings for felonies, and other local crimes.
State Database:
- State Police and Highway Patrol: These agencies keep logs of arrests, probes, and state-level policing.
- State Courts: State courts deal with more serious crimes. This includes felonies, and they keep records of convictions, rulings, and ongoing cases in the state.
- State Corrections Departments: These units keep logs of individuals jailed in state prisons and on parole.
Federal Database:
- Federal Bureau of Investigation (FBI): The FBI maintains the National Crime Information Center (NCIC). This includes nationwide crime records, warrants, and more.
- Federal Courts: Federal courts handle cases involving federal law violations. The records include convictions and sentences for these offenses.
- Other Federal Agencies: There are other agencies, like
- the Drug Enforcement Administration (DEA)
- The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
They also keep records of federal probes and charges.
Purpose and Usage
Tenant Screening:
Landlords check their tenants before leasing out. This makes sure to avoid renting to people with a history of violent crimes or property-related offenses. This is to ensure that you keep the peace in your house. If you can not do this, you can work with a tenant screening service provider. You can also get information from their rental history.
Job Screening:
Employers also use criminal background checks. They use it to make sure likely hires do not pose a risk to the company or its employees. They do this to keep their brand prestige and keep their clients.
Volunteer Screening:
Clubs working with children, seniors, or other vulnerable groups often require background checks for volunteers.
Licensing and Certification:
Certain professions require background checks as part of the licensing process (e.g., healthcare, education, security). This is to make sure they stay compliant.
How to Run a Criminal Background Check on a Tenant
1. Obtain Consent from the Tenant
Before running a background check, you must obtain written consent from the prospective tenant. Include a section in your rental application form where tenants authorize you to perform background checks. Inform them of the types of checks you will be conducting, including the criminal background check. Some of these checks will include rental history, eviction history, credit score, income verification, and a criminal background check.
You must stop at ones if they refuse. You can then decide not to offer your property to them. Make sure to be up to date with the landlord tenant laws that apply to your area. This will help you avoid legal issues.
2. Gather Necessary Information
To run a background check, you'll need specific facts from the tenant. Make sure you have the tenant’s full legal name. Also, get any aliases or previous names. Get their date of birth, also, and their Social Security number (SSN). Most landlord-tenant laws require that you get this data from the tenants directly.
3. Choose a Reputable Tenant Screening Service
Select a trustworthy and accredited tenant screening service to run a proper background check on the tenant. You must make sure the service complies with the Fair Credit Reporting Act (FCRA) and other relevant local laws. Look for services with good reviews and a solid track record in the industry.
The service should provide detailed reports. It should include criminal records, sex offender registries, and other relevant databases.
4. Submit the Information
After you have chosen a background check service, you will need to provide them with the collected information. Many services allow you to submit information online through secure portals. If your service offers this option, that's great. Otherwise, you will need to visit their office.
Double-check the information for accuracy to avoid delays or errors in the report. You may also start by checking with the previous landlord. Confirm information sent during the application process with the tenant to know if it's correct.
5. Review the Criminal Background Report
Once the background check is complete, carefully review the tenant screening report. Look for any criminal convictions, pending charges, or arrest records. Pay attention to the severity and nature of any crimes. Focus on offenses that might impact the safety of other tenants or the property.
Make sure to also consider the time that has passed since any offenses. Old and minor offenses may be less concerning than recent, serious crimes. But then, you are still left with the choice to make.
6. Evaluate the Findings
Assess the results based on your rental benchmarks and policies. Refer to your established standards for fair and unfit criminal history records. Stay consistent by using the same standards for all applicants. This is crucial to ensure fairness and avoid biased claims.
7. Make a Decision
Decide whether to approve or deny the rental application based on the background check findings. If the background check is clear or within acceptable limits, you can proceed with the rental process. But if the results are concerning, you may decide to deny the application.
8. Provide Adverse Action Notices (If Applicable)
If you decide to deny the application based on the criminal record check, you must follow specific legal procedures. Provide the applicant with a written notice that explains the decision. Include a copy of the background check report and contact details of the service agency.
Inform the applicant of their rights under the FCRA. Include the right to dispute inaccurate information.
(Tenant Evictions Best Practices in Alabama)
9. Document Your Process
Keep records of the consent forms. Also, keep the reports and any emails with the tenant. Store these records securely for a period as required by law or your company’s policies.
10. Stay Updated on Legal Requirements
Ensure you remain compliant with all relevant laws and regulations. Be conversant with the landlord-tenant laws of your city. Avoid biased practices by applying background check policies consistently. Be aware of specific laws in your state or locality regarding tenant screening and criminal background checks.
(15 Legal Considerations For Property Managers)
Conclusion
Running a criminal background check on a tenant is a vital part of the tenant screening process. It helps protect your property and other tenants while ensuring you comply with legal requirements. As important as this is, it's equally important that you do it without violating the rights of the applicant. Failure to comply might lead to a serious legal issue.
If you need more help with this or how to go about it, you can reach us with your concern here. We will do our best to help you out. We have multiple methods for obtaining information when conducting a criminal background check.
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