By Attorney Tristan R. Pettit
Petrie & Stocking S.C.
Screening prospective tenants is the single most important aspect of the rental process regardless of whether you are renting residential or commercial property. If done properly, tenant screening can save a landlord a lot of money, a lot of time, and a lot of headaches. Setting up a proper and legal screening process, which includes the drafting of a Rental Application and written Screening Criteria, can help reduce the need to evict a tenant, defend yourself against a claim that you violated the Wisconsin Administrative Code’s Residential Rental Practices (ATCP 134), defend yourself against a claim for discrimination under the Fair Housing laws, and preserve your property from physical damage.
There are several steps to instituting a good tenant screening process. First, you must verify that the applicant is who they say there are. The best way to do this is to require each adult prospective applicant to completely fill out a rental application. You should also ask each adult to provide you with a valid photo identification. Request a copy of the applicant’s prior utility bill or cable bill as well. You want to ensure that the address on the bills is the same as the address listed on the photo identification and the rental application. You should also obtain the applicant’s date of birth and social security number. Require that they provide you with any prior names that they have used in the past few years such as maiden names, if they are recently married or married names if they are recently divorced. If you are renting to a business entity verify its existence with the Secretary of State’s Department of Financial Institutions. Obtaining all of this information early will greatly assist you later in the screening process.
Second, have a written tenant screening criteria in place before you start accepting rental applications and ensure that it is applied consistently. You should set forth the minimum requirements that are necessary to rent your property as well as what will cause an applicant to be denied. You can provide the written tenant screening criteria to each prospective applicant along with the application, or at the very least, you should memorialize the criteria in writing, date it and keep it for at least 3 years. It is important to remember that if you make an exception to your tenant screening criteria for one applicant that you have now lost the protection of having the criteria in the first place —- so avoid making any exceptions.
Your tenant screening criteria should not be subjective. Rejecting an applicant because they give you a “bad feeling” or because you did not “connect” with them will only run you afoul of the Fair Housing discrimination laws. You criteria needs to be objective. Federal laws contain seven (7) different protected classes and the state of Wisconsin has twelve (12) protected classes. You may not deny an applicant because they are a member of any of the following protected classes: race, color, national origin, sex, religion, familial status, handicap, marital status, sexual orientation, lawful source of income, ancestry and age (18 years old and over).
A common misconception is that you cannot reject an applicant who has been convicted of a crime, who is a smoker, or who has previously been evicted. Criminals, smokers and people with past evictions are not protected classes and therefore legal tenant screening criteria can exclude them without violating state or federal discrimination laws. Other examples of proper tenant screening criteria include the following: (1) Applicant must have monthly gross wages of 3 times the monthly rental amount; (2) Applicant must have no unsatisfied money judgments against them; (3) Applicant must have a credit score of at least 600; (4) Applicant must complete all questions on the rental application; failure to answer all questions or provide an acceptable reason for not answering all questions are grounds for denial of your application.
Fourth, you should run every applicant’s name through Wisconsin’s Consolidated Court Automation Program (CCAP) which is located at http://wcca.wicourts.gov/index.xsl. This website lists all criminal and civil legal actions filed throughout the state. By becoming adept with CCAP’s search capabilities you will be able to discover if a prior landlord has started an evictions action against your applicant, if your applicant has ever been charged with a crime, or if they have been sued for owing money to someone and whether or not they have satisfied that judgment. Best of all CCAP is free and open to the public.
Fifth, you should obtain a tenant credit check on any applicant that is still under consideration after checking CCAP first. A landlord may require the applicant to pay the actual cost of the credit check up to $20 if they so wish. In order to charge this fee however you must obtain the credit report from a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis (American Apartment Owners Association, TransUnion, Experian or Equifax) and you must notify the applicant of the cost before ordering the report and provide them with a copy after it is received.
These five steps for screening and qualifying a prospective applicant for your rental property are the bare minimum that should be done to ensure that you are protecting your investment. If you have any questions regarding the above or would like assistance in drafting your Rental Application or written Screening Criteria or any other landlord- tenant law matter, please feel free to contact :
Attorney Tristan R. Pettit
Petrie & Stocking S.C. 111 E. Wisconsin Ave.
Milwaukee, WI 53202
Fax: (414) 276-0731
For more information, visit: Wisconsin Landlord Tenant Laws Wisconsin Landlord Forms Rejecting A Rental Applicant: The Do’s and Dont’s Wisconsin Attorney General Issues Opinion That Assists Landlords Regarding Carpet Cleaning The American Apartment Owners Association provides tenant screening background checks nationwide. Looking for a tenant screening report in a state other than Wisconsin? Visit our Tenant Screening Background Checks page to learn more.