Find Out If You Are Making These Common Mistakes
Like a house built on a strong foundation, your rental application can make or break:
- Your ability to effectively screen your prospective tenant.
- The likelihood you’ll collect your rent.
- Your chances for recovery if you have to turn the tenant over for collection.
Is Your Lease Application Up to Par?
Compare yours to this checklist to see if you are leaving anything out:
- Personal Information, including the full legal name (see What’s in a Name ), phone numbers, Date of Birth, Social Security Number, and Driver’s License Number is critical for screening. While the SSN is not required to obtain a credit report (see How to Screen a Tenant Who Does Not Have a Social Security Number ), it is a crucial identifier in the screening process. Likewise, the Date of Birth is critical to criminal background checks, and Driver’s License info is invaluable for uncovering fraud, and for collection efforts.
- Previous Address history gives you the basis for deciding which criminal databases to search, allows you to cross-check against the PATH report and other information provided to avoid fraud, and gives you current and previous landlord information for references.
- Employment information helps you judge financial ability, allows you to cross-check against the credit report to avoid fraud, and is a necessary step to satisfying a judgment should you go to collection.
- Banking information is provided primarily to show financial ability, to screen for fraud, and is also used for garnishments in collection.
- Credit references help you determine this prospect’s attitude toward financial responsibility, and provides important references.
- Personal references, if verified, can help you decide if the tenant is responsible, and confirms other information, such as previous address history. If personal references are not from the tenant’s purported geographic location, this could be a red flag.
- Emergency contacts are a must-have in case of an injury or when a tenant disappears, and also provide valuable clues for the skip-trace or investigation when collecting against a tenant who skips.
- A list of other proposed occupants. GET AN APPLICATION FROM EACH ADULT, and record each child’s full legal name (see What’s in a Name ).
- List detailed information about each car tenant owns (another way to find him if he skips), each pet, and inquire about possible nuisances like musical instruments, and heavy or dangerous furniture like water beds.
- An Authorization Statement MUST APPEAR ABOVE THE SIGNATURE LINE to allow credit checks, references, criminal and other background checks. You can also include a statement that confirms the prospect’s understanding the application fee will be used to cover the costs of the background check, and is not refundable. Some landlords include a statement verifying that the information provided is true and complete.
- The Signature serves as verification of the information, and validates the authorization for the tenant background check. Make sure the signature and the name match.
Do NOT accept the application unless every item of the application is COMPLETE.
What do you add to your application? Share with other landlords by leaving your comment below.
Need help drafting a Lease Agreement? See our four-part series How to Draft a Solid Lease Agreement.
American Apartment Owners Association offers discounts on products and services related to your commercial housing investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
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