Tenants

What Do You Need To Know About Tenant Screening

The screening process of any rental contract is viewed by many as the most important part of the process. Anyone can market a property and find you a tenant, but a broker really earns their commission during the screening process.

During this process it is important to understand what you should be looking out for; both good and bad. Plus what kind of things you can ask. There is of course some legal background to this as you are legally not allowed to ask questions that could be viewed as discriminatory.

You must stick to the facts and look for things that make a difference to their ability to be a good tenant rather than personal facts about their race or sexual orientation for instance.

In this article we will look at why screening is important, what you should be asking and what you absolutely should not be asking.

Why is Tenant Screening Important?

Screening is important for a number of reasons and the biggest of those is simple. You need to know who you are allowing to move into your property. It pays to do a thorough background check on anyone that is considering renting your property as you need to get an idea of their background and their previous history as a tenant.

You are then able to user this information to decide whether or not you would consider them as a suitable tenant for you property. At this stage it is worth pointing out that a reference is of course only proof of their previous behaviour and is not a guarantee as to the standard of their behaviour in the future. As such it is important to remember that you should take a view on every reference that you receive and try to use the information to make your judgement.

Background

Of course the most important part of the screening process is the background checks. This gives you an idea of their past behaviours as a tenant. You will need to speak with their previous landlords and ascertain whether or not they have conducted themselves correctly during previous tenancies.

You need to know whether they have paid rent on time, kept the place clean, been loud or caused a nuisance or even had run ins with law enforcement. It is also worth trying to understand what condition they returned the property in. Was the place fully cleaned or was it returned in a bad state?

It also pays to get an understanding of the tenant’s criminal background. You may wish to have a criminal record check carried out on them as well as check the Sex Offenders List to see if they appear. This may mean that they are not legally allowed to rent a property in your area as a number of cities have rules relating to sex offenders living near schools or parks.

Pros and Cons of Tenant Screening

Screening also helps you weigh up the pros and cons of potential tenants as it allows you to learn quite a bit about them. You are able to get an idea of their salary, thus giving yourself an idea as to whether or not they can afford the rent, their job stability and their chances of promotion.

You can also learn about their previous rental tenancies and speak with their previous landlords and bosses who will be able to give them a personal reference, thus giving you a solid understanding of their character.

On top of the positives you will be able to learn about any negative facets of their conduct that will help you to form a picture of them as potential tenants. So one of the most important things about screening is that it gives you the information you need to be able to decide whether to accept or reject them as tenants.

Avoid Bad Tenants

Due to the above you will be able to avoid any potentially bad tenants due to what you have learned about them. Screening can often act as a self-policing system as bad tenants will often try to avoid working with landlords that wish to screen tenants.

So by putting in place these checks you will see that those tenants that know they have a bad rental history (ie the tenants you don’t want) will look to work with brokers or landlords that are less strict in their referencing process.

This for me is one of the key reasons to ensure that you always screen tenants. Tenants that are looking to avoid any screening processes (even those looking to pay large sums upfront) should be questioned as this behaviour should strike you as odd.

What to Ask in Tenant Screening

There are a number of standard questions that you should be asking during your screening process. In this section we will discuss these points and also consider what you should be looking for in the process.

Credit History

One of the first parts of any screening process should be a credit check. This is a simple process to carry out and is one that can give you a lot of information to consider.

You should be carrying out the credit check first as a failed credit check will negate the need to continue the rest of the screening process. What you should be looking for is a strong record of paying back credit and a high credit score.

Both of which can be viewed as good indicators as to the tenants attitude towards paying things off on time. Be cautious of tenants with multiple defaults or missed payments, this is potentially a indication of their view on paying rent. Those with no missed payments are far more likely to pay rent on time as it shows that they have been responsible with paying back credit, etc.

Also be on the lookout for bankruptcy or any other negatives on their file. Should you dig up any negatives it is important to discuss these with the tenant as there may be valid reasons that may change your view.

Previous Landlord

Speak with their previous landlord and try to get an idea of how they are likely to behaviour at your property. Try to find out about their conduct at previous rental homes; were they messy, noisy or a nuisance and did they pay rent on time?

Would their previous landlord recommend them and why did they leave? Was there some sort of issue? A tenant’s previous landlord can hold a lot of information about them so it is very important that you discuss this with them thoroughly.

Be on the lookout for tenants who have bad previous landlord references, ones with a history of late payment or damaging a property should be rejected regardless of how strong their rental offer is.

Employment

Speak with their employers and find out their salary level and the length of time they have been employed in their current role. Their salary must be enough to cover the rent, utilities and other living costs such as food, etc. A good rule of thumb is that the salary should be a minimum of three times the monthly rent.

Also, finding out how long they have been in the role gives you an understanding of their job security. The longer they have been in the role the less likely it is that they will loss their job. This is important as it gives the tenant a level of stability and the long term ability to pay rent.

It is also important to speak with their boss to get an understanding of their behaviour at work towards their superiors and their peers. This gives you an insight into their likely conduct and treatment of the relationship with you as their landlord.

What Not to Ask?

The law gives everyone in the country the right to live their lives free from persecution and discrimination. As such there are a number of things you cannot ask incoming tenants as they could be viewed as discriminatory questions.

It is important that you are not seen to be discriminating against potential tenants as this could land you in hot water with the authorities in your area. The easiest way to do this is to avoid asking any questions that could be seen to help you discriminate against somebody.

Age

You are not allowed to discriminate against somebody due to their age and as such most landlords do not ask this question when screening a tenant. The tenant’s age is frankly irrelevant when it comes to renting a property.

You may find that some tenants freely offer up their age during the process, but my advice would be to avoid asking them, so as to seem unconcerned by their age. This shows that you are not discriminating against them due to be too young or too old.

Race

You do not need to ask a tenant their racial background as this is not important when renting to somebody. A tenant’s race is of no consequence to their ability to be a good tenant.

Landlords that are seen to be questioning tenants on their racial background are walking a tightrope in terms of discrimination laws. Do not question any incoming tenants on their racial background.

Religious Beliefs

As with both of the above, someone’s religious beliefs have no bearing on their ability to be a good tenant. It is not important and asking a potential tenant this could put you at risk of being accused of discrimination.

Religion is irrelevant when it comes to paying rent on time and keeping the property in good condition. Avoid asking this of any incoming tenant.

Sexual Orientation

Again, someone’s sexuality has no impact on them as tenants and asking this question simply opens you up to accusations of discrimination. Apart from being irrelevant, asking any of these questions of an incoming tenant can open you up to negativity from them.

Remember, being asked things that are not relevant to the screening process can negatively impact your relationship with your tenants before it has even really started.

Disability

Quite rightly, you are not allowed to discriminate against individuals based on any disability they may suffer from. Whilst you may need to be aware of any disability that requires you to make adjustments to the property asking about disabilities in the screening process only opens you up to accusations of discrimination.

So, whilst you will need to know about any disabilities so that you can make the required adjustments it should not be part of your decision when it comes to screening the tenants.

Conclusion

Screening a tenant is extremely important and should not be taken lightly. You must use all the tools available to you to find out as much relevant information about your tenants as possible so that you are able to make a rational decision about their rental offer.

Take the time to speak with their previous landlords and find out about their employment and salary status. However avoid asking anything that isn’t relevant and could be viewed as being discriminatory.

I am a firm believer in keeping the screening process professional and ensuring the right questions are asked. Take all of your own personal views out of the equation and focus on what is relevant and nothing else.

If you are unsure of what to do or are concerned that you may be putting yourself at risk with your line of questioning instruct a qualified and experienced broker who will be able to complete the screening process on your behalf.

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