Before accepting any prospective resident into your rental property, you need to perform a tenant background check. This important tool will provide reports about the tenant helping you learn more about them. A renter background check provides a comprehensive look at the applicant, including everything from rental history to criminal history. If you do not perform a background check on tenants, you are putting the safety and security of your rental property, and any other tenants who share that property, at risk.

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How to do a Background Check on a Tenant

AAOA’s screening services and resources make it easy to get a tenant screening background check.

Step 1: Sign up for a free account and join AAOA. The website also offers paid membership which includes discounts on background and credit check for renters.

Step 2: Download AAOA’s free rental application form and collect payment to run the rental background check. Be sure to review the landlord tenant law for your state to learn what the maximum fee is that can be charged. While there is a cost for a background check for tenants, you can pass that cost on to your tenant in most states.

Step 3: Order a tenant credit and background check. This report may include a credit report, credit score, eviction, criminal, employment and/or income verification, and useful data on your prospective tenant. Some managers have been known to also request financial data directly from the tenant including bank statements and pay check stubs. To initiate the background request, all you need to do is provide the renter’s name and email address to a company that does background checks. The tenant’s information will then be run through national databases, from the sex offender registry to the national terrorist watch list and county criminal search. You’ll be able to view basic details of any matching records, and can draw your own conclusions, to do what is best for your property.

Based on the credit and background check you receive, you now have the reporting needed to make a well informed decision on the applicant. The background check may even display your potential tenant’s work and rental history. All of this information gives you the knowledge needed to make an informed decision about the worthiness of the applicant and protect you from making a mistake simply because you want to have a tenant in place to avoid a vacancy.

Now that you’ve completed the landlord credit and background check the next step is to provide a lease agreement to the applicant you’ve selected.

How to Use Background Checks for Landlords

A tenant screening background check should be an automatic part of your application process. Whether you accept applications online or in person, you must require that all applicants fill out the information that allows you to perform the background check. Remember, this important piece of the application process is vital to helping you protect your rental properties and the tenants who are entrusting you to give them a safe place to live.

AAOA support staff can also help to better explain and answer questions about credit, score, and other reports you may receive.

What to Look for on a Background Check

As a landlord, it is your duty to provide a safe place for renters to live. If you have a multifamily property, your renters are counting on you to vet potential tenants carefully, for their own safety. Thus, it’s important that you evaluate any criminal charges that show up on tenant background checks. Any arrest record should be a red flag; however, the decision of whether to allow or deny the applicant rests with you.

Take into consideration the weight of the charge and the date of the incident. To protect yourself, write down criteria for renters. You may decide that you’ll overlook criminal acts that happened 7 or more years ago, or that you’ll rent to someone with a misdemeanor record but not a felony. The choice is up to you.

Sex offenders are not protected under the Fair Housing Act, so any landlord can decide to not rent an apartment to a registered sex offender and face no legal retribution. Some landlords enjoy helping troubled individuals get back on their feet and may find it worthwhile to help someone who has served time for sex crimes rehabilitate into society. If you spot a sex offender charge on a tenant background check, ask more questions to understand the bigger picture, including what may be at stake for your renters.

The other information on the background check will help you determine whether a renter is a high or low risk to your property. An individual with a spotty work history could be a red flag, since a tenant who loses a job may be unable to pay the rent on time. Likewise, someone whose rental history shows frequent moves could be a liability.

If tenant background checks indicate that a renter has changed jobs or moved frequently, consider asking more questions to find out why. There are many legitimate reasons for someone to change jobs or move but without a conversation it won’t be clear on the credit check alone. Relationships might end, someone may move for work, their business could go under, or an applicant could have fallen on hard times or made poor decisions for a period of time.

With any of these red flags, landlords have leeway in determining what to do. You may be stricter about tenants at multifamily units where community safety is at stake, while giving someone a second chance if you own a single-family home. The main purpose of tenant background checks is to provide landlords with information they need to make informed decisions about who has access to their properties.

Failing to Perform a Background Check for Renters Could Have Devastating Consequences

Seasoned landlords and property managers are likely to have a number of potential tenants who wish to forgo the background check. They will often have excellent reasons for this, especially if you are going to pass the cost of running a tenant credit on to them. However, failing to do so could have costly consequences.

Consider these potential problems:

  • A tenant who has a poor past rental history and many evictions is probably going to turn into a nightmare tenant who does not pay rent and who damages the property.
  • A tenant who is a registered sex offender could put you at risk for a lawsuit if your property is near a school, park or other area that children frequent.
  • A tenant with a violent criminal history who harms someone else at your property could lead to a lawsuit and all the fees associated with that when the injured party takes you to court.
  • A tenant who refuses to comply with a landlord background check could be using the identity of other people

As you can see, the potential costs of a bad tenant are extensive, so you don’t want to skip a credit background check. A tenant background search from our site will save you from many of these potential instances. Trust the American Apartment Owners Association to provide you with your renter background checks for landlords. Purchase our basic background check today or click here to see our comprehensive apartment background check packages and choose the services that are the most helpful to your screening needs.

Click on the image below to find out the landlord tenant laws in your state.

Click the Map for Tenant Screening Background Checks in Your State

 

The information provided herein is for advisory purposes only and AAOA takes no responsibility for its accuracy. AAOA recommends you consult with an attorney familiar with current federal, state and local laws.