A guide to tenant screening and what you need to know
The need for a place to stay is basic. Not everyone can afford to buy a property, however, so people use renting as a long or short term alternative. As part of the rental process, virtually all property managers screen tenants. This process is not meant to be discriminatory, and in fact, it can benefit tenants and property managers alike.
What is tenant screening?
Tenant screening is the process of gathering data on individuals who want to live at a particular property. The ultimate goal of the screening process is to determine whether the potential tenant is a good fit for the property—that is, whether he can meet the policies in place at the property and all lease terms.
What is the screening process like and what kind of data is involved?
The screening process starts with the potential tenant filling out a formal application. The applicant gives the completed application, along with supplementary documentation such as pay stubs and letters of recommendation, to the property manager. The property manager then sends the application and supplementary documentation to a third party company. This company is authorized to access items such as a person’s credit score or criminal records, as well as to verify previous and current employment and address/rental information. Once the screening company confirms what the applicant listed on the application and related documents, it reports back to the property manager with its findings. Typically, the property manager requires an application fee and/or a refundable security deposit at the time of application and screening. The application fee the property manager collects typically goes to cover the cost of using the screening company’s services.
The property manager compares the results of the screening to the policies and procedures currently in place at the property to determine if the applicant qualifies to rent. If all goes well, the property manager approves the application and the applicant signs a lease. If there is a problem within the results, such as not meeting income requirements, the property manager denies the application and the applicant cannot rent. Depending on the screening company a property uses and how efficiently the company verifies data, screening takes anywhere from one to seven days.
Who gets screened?
In general, property managers screen every applicant. This is because they have to apply the same standards to all applicants in order to be in compliance with Fair Housing laws. Property managers do not screen minors however, with the exception of minors who are emancipated. Minors do not have the legal authority to enter into legal contracts in most cases, and a lease is a legal contract. Property managers also ask cosigners to submit an application and be screened, simply because cosigners accept financial liability should the tenant default on the lease.
How does screening benefit property managers?
Rental properties are places for people to live, but they are also businesses that seek profit. When a property manager screens potential tenants, she is able to determine very quickly who might be a financial liability to the property. Additionally, unfortunately, not everyone who submits a rental application readily discloses all relevant information. For example, people often do not disclose previous bankruptcies or criminal charges. Screening gives the property manager a way to discover if the applicant is holding back information that might demonstrate he is a risk to the property. This matters not only in terms of the property’s finances, but also in terms of the safety of the other tenants. Lastly, screening lets property managers use the same type of information to evaluate each applicant, ensuring that the opportunity to rent is fair based on property policy and local or state law.
How does screening benefit tenants?
In addition to providing increased property safety and a level of fairness to the application process, screening benefits tenants by alerting them to potential problems related to accessed data. For instance, people sometimes discover cases of identity theft or fraud based on the screening results. The screening lets the applicant alert the proper authorities to these problems. Additionally, applicants have the opportunity to ask for specifics related to their application rejection and make adjustments. For instance, an applicant might take specific steps to boost his credit score or get a cosigner, or he might realize he must look for a non-managed private rental property with less stringent requirements. It doesn’t matter whether you are looking at 1 bedroom flats to rent in London or flats to rent in Edinburgh a landlord will normally pre-check your ability to pay and meet your other tenancy obligations. As well as the benefits we have shown above you should also consider that going through this process will mean that you have a more secure relationship with your landlord; meaning you are less likely to encounter problems later on and less likely to end up with an invasive landlord!