When it comes to renting your property to a new tenant, it is worth investing the time to screen the tenant thoroughly, because the process of evicting the wrong tenant is no fun.
Trust But Verify
In low-stakes situations, it’s fine to assume the best of people; however, when it comes to renting your property to a stranger, it pays to be a little suspicious. I call this trust but verify.
If you really have that sense that something’s fishy, you can call the same reference twice. In rare situations, people will ask a friend or family member to pose as a former landlord or employer. So, when you call the first time, the “landlord” is ready for you and may falsely answer questions about the prospective tenant’s rental history. Once you’ve completed that call, their guard drops. You can call again, preferably from a different phone number, and see if you get the same response or if instead of answering, “A-1 Property Management,” they simply answer, “Hello, this is George.”
Once a prospective tenant completes the rental application, I recommend ordering a consumer report to confirm the essential information, such as credit history and rental history. Be aware that you must have an applicant’s consent to order this report, and if you decline the application based on the report, you must inform the applicant so they have the opportunity to challenge the reporting agency.
If applicants have a criminal history, you cannot automatically reject them. The California Association of Realtors says, “A blanket ban on renting to persons with a criminal record is unlawful discrimination because it is deemed to have disparate impact on persons of color and race. However, specific rental-related criminal information may justify a refusal to rent if it pertains to the safety of other residents, employees or the property AND is close enough in time to be considered relevant.”
This puts landlords in a bit of a bind, because if they do rent to an ex-felon and a problem ensues with neighbors, neighbors can sue the landlord. If the landlord does not rent to the ex-felon, then the ex-felon can sue landlord.
Make Sure the Rules Apply to All
It’s fine, even advisable, to have criteria to judge potential tenants. However, if you set minimum requirements for credit scores and income, for example, just be sure you apply them to all applicants equally.
During the pandemic, a bunch of new rules were put in place to prevent people from getting kicked out of their homes. Never mind that landlords still had to pay their mortgages, but I digress. Now, if you are reviewing a rental application and you see that a prospective tenant may have missed a few rent payments because of financial strain caused by COVID-19, you cannot use that information as a negative factor for an otherwise qualified applicant.
Overall, the goal is to find a tenant with whom you can have a mutually beneficial relationship. You provide a well-maintained residence, and they do their best to take care of the property while they live there. By scrutinizing their application and verifying their information up front, you have a much better chance at finding a tenant who will keep up their end of the agreement.
If you have questions about real estate or property management, please contact me at email@example.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re a $5.00 gift card to Schat’s Bakery.
Dick Selzer is a real estate broker who has been in the business for more than 45 years.