Discover how to effectively screen tenants for your rental property, find trustworthy tenant screening services, and determine the right questions to ask during the process.
Finding the right tenant for your rental property is essential for a smooth and profitable leasing experience. At Andren Homes, we understand the significance of a comprehensive tenant screening process. That’s why we’ve compiled this all-encompassing guide. Whether you need a step-by-step Tenant Screening Checklist, insights on interpreting background checks, or tips for identifying red flags, this article will help you navigate the essentials of securing the best tenants for your property.
Table of Contents
What is tenant screening?
What does a tenant screening report include?
How to screen tenants for a rental property
How to maintain objectivity in tenant screening
Tenant Screening Checklist
Overview of tenant screening background checks
Questions landlords can and cannot ask
What are the costs associated with tenant screening?
Recommended tenant screening services for landlords
Free tenant screening options
How to obtain a tenant screening report
Understanding tenant screening laws in California
How long does tenant screening typically take?
What is Tenant Screening?
Tenant screening is a methodical process employed by landlords and property managers to evaluate the suitability of prospective renters. The goal is to determine if the tenant will be a responsible occupant. Key questions include: Will this person pay rent on time? Will they respect the property and neighbors? Tenant screening helps provide answers to these critical inquiries.
While the specifics of the screening process may differ among property managers or landlords, the overall objective remains consistent. Moreover, the tenant screening procedures can vary based on local laws, owner preferences, or HOA regulations.
What Does a Tenant Screening Report Include?
A tenant screening report compiles information from various background checks, including credit scores, rental histories, and criminal records.
This document amalgamates findings from multiple sources, offering a consolidated overview of a potential tenant’s background. Landlords use this report to make informed decisions about whether to accept or deny prospective tenants.
Typically, a tenant screening report includes:
Personal Identification: Full name, date of birth, and relevant details to verify tenant identity.
Credit Report: Credit score, payment history, bankruptcies, or other financial judgments.
Criminal History: Felony and misdemeanor convictions, pending criminal cases, and sex offender registry status.
Rental History: Previous addresses, names and contact details of past landlords, evictions or broken lease agreements, and payment history (e.g., late payments, unpaid rent).
Employment Verification: Details regarding current and past employers.
References: Usually provided by the tenant, often including previous landlords.
Income Verification: Through pay stubs, tax returns, or bank statements.
Legal Judgments: Including evictions and debts owed to prior landlords.
Landlords and property managers must ensure that all gathered information complies with federal, state, and local laws, including the Fair Credit Reporting Act (FCRA) and the Fair Housing Act. Discrimination based on race, color, national origin, religion, sex, familial status, or disability is strictly prohibited. Additional protective classes may apply depending on the state.
How to Screen Tenants for a Rental Property
Effectively screening tenants is vital for protecting your rental property. Start by collecting information through a rental application, which gathers both personal and employment details. Engaging potential tenants in a brief conversation can also help you evaluate their suitability and gain insight into their personality and future plans.
Next, delve into their background checks. Credit checks can help confirm financial stability, while criminal checks enhance community safety. Providing potential tenants the opportunity to view the property can also serve as a touchpoint to assess their interest and character.
Finally, sharing a comprehensive lease agreement that outlines mutual responsibilities can preemptively address concerns. Throughout this process, maintaining fairness and consistency in accordance with housing laws is critical for your legal protection. The following section provides essential tips for remaining objective during tenant screening.
How to Maintain Objectivity in Tenant Screening
Staying objective and consistent during tenant screening is not just a best practice for selecting trustworthy tenants; it’s also vital for compliance with Fair Housing laws.
As a landlord, you can ensure a fair and consistent tenant screening process by establishing a clearly defined, written set of rental criteria. Utilizing automated tenant screening platforms can help minimize biases and ensure that applications align with preset standards.
Regularly reviewing Fair Housing laws is also crucial for fair tenant selection. Openly communicating your criteria with potential tenants from the start sets clear expectations and simplifies the rental process. Ultimately, a combination of technology, documentation, and education will help maintain objectivity in tenant screening.
7 Tips to Ensure Fairness in Tenant Screening
Document Your Criteria: Clearly outline what qualifies someone to rent your property.
Automate the Process: Use a tenant screening service that flags applications not meeting your criteria, reducing human bias.
Stay Informed on Fair Housing Laws: Keep your knowledge updated regarding relevant regulations.
Keep Thorough Records: Document everything, including reasons for any rejections based on your criteria.
Avoid Emotional Decisions: Treat renting as a business transaction and adhere to your criteria.
Communicate Criteria Transparently: Inform potential tenants of your requirements from the outset.
Seek Professional Advice: Consult a property management expert or legal counsel when in doubt.
Tenant Screening Checklist
A well-structured checklist streamlines the tenant screening process, ensuring that no critical aspects are overlooked and all potential tenants are assessed against consistent criteria. Here’s a handy tenant screening checklist to guide you:
Rental Application Completeness:
Personal details
Employment information
Previous addresses and landlords
Landlord references
Conduct Initial Interviews:
Discuss reasons for moving
Inquire about the intended duration of stay
Address specific needs or concerns
Reference Verification:
Contact previous landlords for feedback
Verify current employment
Assess Financial Stability:
Check if monthly income is at least 2.5 times the rent (this may vary by landlord)
Review recent pay stubs or tax returns
Look for consistent employment history
Credit and Background Checks:
Evaluate credit score and history
Check for past evictions
Review criminal records
Look for non-discharged bankruptcies
Lease Agreement Review:
Ensure the prospective tenant(s) review a draft of the lease agreement and any applicable HOA rules.
Require agreement to move in within 14 days of submitting the application to attract serious renters.
Compliance with Fair Housing Laws:
Ensure no discrimination based on protected classes
Judge all applicants using the same criteria
Overview of Tenant Screening Background Checks
The primary goal of a background check is to verify the information provided by potential tenants and uncover any undisclosed details relevant to their rental application. This process typically involves examining:
Criminal Records: Includes checks for minor offenses and more severe felonies. Keep in mind that having a criminal record doesn’t automatically disqualify a tenant; the nature and recency of the offense are considered.
Previous Evictions or Court Judgments: A history of evictions can be concerning. This part of the check focuses on identifying past evictions and understanding their context.
Employment Verification: Confirms that the tenant is employed and can afford rent, potentially revealing discrepancies between the application and actual employment details.
Non-Discharged Bankruptcies: Renting to a tenant currently undergoing bankruptcy is at your discretion.
For property managers and landlords, background checks are a protective measure against risks such as property damage, delayed rent payments, or disturbances in the community. Thoroughness in this step fosters a safer, more harmonious living environment for all tenants.
Both landlords and tenants should understand that tenant screening background checks are subject to various laws, including the Fair Credit Reporting Act (FCRA). Landlords must obtain written consent from applicants before conducting background checks and provide a copy of the report if an applicant is denied based on its content.
Tenant Screening Questions
Tenant screening questions are essential for landlords and property managers seeking to understand potential tenants more deeply. While it’s vital to ask the right questions to ensure compatibility, it’s equally important to know which questions are off-limits due to Fair Housing regulations. Andren Homes encourages all landlords to familiarize themselves with the Fair Housing Basics.
Most screening questions can be categorized as follows:
Basic Information
Financial Information
Background and References
Motivations for Moving
According to Fair Housing Basics, here are two lists with examples of questions that landlords can legally ask:
Questions Landlords CAN Legally Ask:
What is your current employment situation?
Can you provide references from your current and previous landlords?
Have you ever been evicted from a rental property?
How many people will be living in the unit?
Do you have pets? If so, what kind and how many?
Can you provide proof of income or recent pay stubs?
Why are you moving from your current residence?
How long do you intend to stay?
Have you ever broken a rental agreement or lease?
While landlords may wish to add more questions tailored to their screening process, they must avoid inquiries related to race, color, religion, national origin, sex, familial status, and disability. Here are examples of questions landlords CANNOT Legally Ask:
What is your race or ethnicity?
Are you married, single, or divorced?
Do you have children or plan to have children soon?
What is your religion or place of worship?
Are you disabled or do you have a specific medical condition?
What country are you from? Or, What’s your first language?
Are you a member of a protected class?
Do you receive public assistance or are you on welfare?
Questions regarding sexual orientation or gender identity.
While some of these questions may seem innocuous, they can easily be perceived as discriminatory. Fair Housing regulations aim to ensure equal rental opportunities for everyone, regardless of their background. Landlords and property managers must familiarize themselves with these regulations and prioritize fairness and equality throughout the screening process.
What are the Costs Associated with Tenant Screening?
The cost of tenant screening can vary significantly based on the depth of the investigation, the tools utilized, and whether landlords choose standalone checks or comprehensive packages.
Here’s a breakdown of potential costs:
Basic credit check: $15 to $40.
Comprehensive credit report: $25 to $50.
Criminal background check: $15 to $40.
Eviction history check: $5 to $20.
Complete tenant screening packages: $35 to $75, though prices can sometimes be higher depending on the investigation's thoroughness.
Some landlords pass these costs onto potential tenants as application fees. Ensure your application fees comply with local and state regulations.
When to Hire Help - Recommended Tenant Screening Services for Landlords
Managing multiple properties can quickly become overwhelming, especially when it comes to tenant screenings. For landlords who may not have the expertise to interpret tenant screening reports, seeking professional screening services can be a wise choice.
Here are some recommended tenant screening services:
Experian RentBureau: Offers credit checks tailored for rental applications, including payment histories from other landlords.
TransUnion SmartMove: Provides instant tenant background checks, credit reports, and leasing recommendations based on provided data.
MyRental: Offers a suite of screening services, from basic credit checks to premium packages that include criminal background checks and eviction histories.
RentPrep: Known for its live screening agents who verify information for accuracy.
LeaseRunner: Provides a la carte services where landlords can choose specific checks, including credit evaluations and eviction histories.
National Tenant Network (NTN): With over 35 years in the industry, NTN offers comprehensive reports, including credit histories, criminal checks, and eviction reports.
Free Tenant Screening Options
While many comprehensive tenant screening services require a fee, several free options are available for landlords seeking to minimize expenses. Keep in mind that free services may not be as thorough or reliable as their paid counterparts.
Zillow Rental Manager: Primarily a real estate listing site, Zillow also offers a free tenant screening service. Landlords receive credit reports and background checks, but the cost is typically passed on to the applicant.
TurboTenant: Provides free tenant screening services, including credit reports, criminal background checks, and eviction histories, with costs generally covered by the tenant.
Apartments.com (formerly Cozy): Offers a suite of landlord tools, including tenant screening services that involve credit reports and background checks, with fees typically paid by the potential tenant.
Self-screening: Some landlords opt to manage the screening process themselves, asking potential tenants to supply recent credit reports (which they can obtain for free annually from major credit bureaus) and conducting informal background checks, like calling references. Although this method is free, it may not be as comprehensive as utilizing a dedicated screening service.
Local Housing Agencies: Some local or state housing agencies provide free tenant screening services or resources, particularly for those renting affordable housing or participating in housing programs.
Online Search: A quick online search or social media check can give landlords insight into a potential tenant’s lifestyle and character. However, caution is advised to avoid violating privacy laws or making decisions based on discriminatory factors.
Public Records: Landlords can manually check public records for eviction histories or criminal backgrounds. Many jurisdictions offer online databases, although this method can be time-consuming and may not capture data from outside the local area.
How to Obtain a Tenant Screening Report
To secure a tenant screening report, determine the information scope you require, such as credit scores, eviction histories, or criminal backgrounds. Once decided, work with a reputable tenant screening service.
Remember to obtain the prospective tenant’s written consent to access their personal data, usually secured through the rental application. By providing the necessary details to the selected screening service, you can receive a comprehensive tenant report.
How to Check Your Tenant Screening Report
Checking your own tenant screening report is a proactive step to ensure the accuracy of the data landlords see. Start by contacting one of the established tenant screening services—often the same ones landlords use—and request a personal report. Some credit bureaus also offer reports that include rental history. As with any personal credit or background check, you’ll need to provide identification details to access the report. Once received, review all information carefully, verify its accuracy, and address any discrepancies with the reporting agency or bureau.
Understanding Tenant Screening Laws in California
Tenant screening in California is governed by a combination of federal and state laws designed to ensure fairness, non-discrimination, and the protection of personal data.
At both the federal and state levels, Fair Housing laws prohibit discrimination based on race, color, religion, sex, familial status, national origin, and disability. In California, these protections extend to include sexual orientation, gender identity, source of income, and additional categories.
Under the California Consumer Credit Reporting Agencies Act, landlords can request a tenant’s credit report. They must inform the potential tenant of any adverse action (like a rejection) based on the report’s contents and provide the name and address of the agency that supplied the report.
If a landlord takes adverse action (denying an application, requiring a co-signer, or asking for a higher deposit) based on information from a credit report or any other consumer report, they must issue an Adverse Action Letter in accordance with the Fair Credit Reporting Act (FCRA). This letter informs the applicant about the decision, provides the reporting agency's contact information, and informs them of their right to obtain a free copy of the report and dispute its accuracy.
Additionally, in California, landlords can charge a screening fee, but limits apply. The fee should only cover the actual out-of-pocket costs of gathering information about the applicant, such as credit report fees. As of December 2022, the maximum screening fee landlords can charge is $59.67.
Regarding privacy, the California Investigative Consumer Reporting Agencies Act requires landlords to inform prospective tenants if they plan to access an “investigative consumer report.” These reports contain information on character, general reputation, personal characteristics, or lifestyle.
There are also restrictions on questions landlords can ask potential tenants. In California, landlords cannot inquire about arrest records that did not result in a conviction, nor can they consider a summary offense (a minor violation) that occurred more than two years ago.
Lastly, if a landlord does not conduct a personal reference check or does not obtain a credit report, they must refund any unused portion of the screening fee to the applicant.
California’s tenant screening laws aim to balance the landlord’s need for reliable tenants with individuals' rights to non-discrimination, privacy, and fairness. Always consult with legal counsel or stay updated on current regulations to ensure compliance.
How Long Does Tenant Screening Typically Take?
The duration of tenant screening varies depending on the depth of the inquiry and the sources involved. Electronic checks, such as credit, criminal, and eviction histories, can return results within hours. However, verifying employment, income, and rental history may take longer based on the responsiveness of references, potentially ranging from a day to several days. On average, while some screenings can be completed within 24 hours, more comprehensive checks may take 2-5 days.
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Logan Andren
Logan Andren is the founder and CEO of Andren Homes Property Management. Since launching the company, Logan and his dedicated team have simplified the rental property experience for numerous Santa Cruz homeowners. Their mission is to enhance the lives of their clients and community, focusing on providing exceptional service and fostering lasting relationships. DRE #02002055
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