Why Your Rental Application Should Include Background Checks
Background checks are becoming more common for many reasons. And recently, there has been a tremendous increase in the number of background checks as a part of tenant screening. These checks help landlords determine who can rent their units. While some cities or states limit the information you can access during a tenant background check, this type of screening is still beneficial for multiple reasons:
- Enhanced safety: Background checks often include a criminal history check, alerting you to any red flags that may put yourself, your employees, or other tenants at risk. Simply having a criminal history is generally not a valid reason to deny housing to an applicant. However, you may be able to identify applicants that may pose a safety risk based on their criminal history. If you find an applicant that meets these criteria, you must make it clear to them that you are denying their application due to the potential safety risk. Provided you document the reasoning and keep a copy of the criminal report, you should legally fulfill all obligations to reject the rental application.
- Reduced liability: Requiring a tenant screening allows you to collect much information about an individual’s background. Without conducting this type of screening, you may be doing your other tenants a disservice and unnecessarily putting them at risk. And in some cases, you could be liable if something goes wrong. Your tenants could pursue legal action if they feel you were negligent in providing a safe housing environment. While reducing liability is vital, it’s also important to recognize that Fair Housing Laws ensure that you cannot deny housing based on discriminatory factors, such as family status, sex, disability, race, national origin, or religion.
- Reduced tenant turnover: Conducting tenant screenings is one of the best ways to ensure your rental properties remain safe for all current tenants. They can help you gain a reputation as a responsible property owner. And this benefit can ensure that you keep the tenants you have for longer, ultimately reducing the time and money you spend filling vacant units.
Landlords have a high level of responsibility. They are responsible for selecting tenants that will be reliable and make regular payments. Without these checks, landlords are taking a huge risk by letting anyone live on their property, which could result in financial losses, security risks, and in some cases, legal action.
With this in mind, there are a few key components that landlords should focus on when reviewing prospective tenant background checks, including:
- Personal information: This part of the background check verifies that the person is who they claim. To accurately verify one’s identity, you must request their full name, birth date, current address, and Social Security Number. This step is vital because of the high number of identity theft cases yearly.
- Work and income data: Landlords have historically looked at income data to ensure tenants could afford rent payments. A background check goes further to verify that the proof of income data, such as that found on paystubs, matches the information provided on the rental application.
- Credit score and history: As a component of one’s financial status, looking a bit deeper into their finances is often a good idea. While income data is vital to ensure their budget allows for the payment, a credit history can give you an idea of how responsible the individual is with their other financial obligations.
- Address history: Looking at an address history can give you an idea of how responsible and reliable a tenant may be. This part of the background check may involve reaching out to former landlords to identify whether rent was paid reliably or if they had any complaints from neighbors.
- Evictions: Looking at a rental history can also provide information about any previous evictions, alerting you to any potential issues you may anticipate with them if they become a tenant. Eviction records often include information about the location of the eviction, the names of the tenant and landlord, and why the eviction occurred. The primary reasons for eviction are non-payment of rent and damage to the rental unit – both of which can be scenarios you would like to avoid as a property owner.
- Criminal behavior: The criminal background check can give you information about past convictions that may put your other tenants at risk.
Landlords cannot protect themselves from all risks when renting out properties. However, a background check can be a strong tool for reducing the likelihood that a poor tenant will be approved. For more information about tenant background checks, contact USA Fact today.
USA Fact Global Screening Services provides comprehensive background and criminal checks for employers that comply with federal and local laws. By helping you eliminate high-risk applicants through tailored solutions, USAFact enables you to create a safe and productive work environment and a foundation for future success.