How Landlords Can Legally Screen Tenants

The majority of landlord-tenant agreements are outlined in a lease. A lease is a contractual document which provides the details regarding:

• The length of the landlord-tenant relationship;
• The use of the property;
• The type of occupancy; and
• Any types of restrictions on the property, including smoking or having pets.

It is important to note, however, that even if a lease is not entered into, the landlord still owes certain duties to a tenant and is still entitled to several rights.

What Are a Landlord’s Rights Without a Lease?

Without a lease, the landlord has the right to the following:

• Be paid rent on time;
• Ensure the property meets applicable housing codes;
• Screen and choose the tenants to reside on the property;
• Collect a security deposit;
• Enter the unit in emergencies that threaten the property;
• Enter the unit to make scheduled or necessary repairs; and
• Evict a tenant who:
  • does not pay rent;
  • destroys or severely damages the property, or
  • breaks the law or agreed rules.

What Are a Landlord’s Obligations in a Lease?

When a lease is entered into, the landlord is obligated to:

• Maintain all units in a hospitable condition;
• Return the security deposit at the time the lease is terminated, minus any costs to repair or clean the unit pursuant to local laws;
• Only collect the rent as well as any applicable penalties;
• Provide adequate notice of:
  • showing the property;
  • late rent; or
  • eviction;
• Respect the privacy of all tenants; and
• Not consider certain characteristics of the tenant, including:
  • race;
  • ethnicity;
  • religion;
  • sex;
  • disability; or
  • sexual orientation.

Why do Landlords Need to Screen Rental Applicants and Potential Tenants?

A landlord screening a potential rental applicant and a potential tenant is an important part of having success as a landlord. Due to an increase in tenant’s rights and remedies over the last several decades, evicting a non-paying tenant can be difficult.

Prior to engaging in the processes, landlords should familiarize themselves with the nondiscrimination provisions contained in the Fair Housing Act (FHA) as well as health and safety laws, for example, the implied warranty of habitability.

How Should a Landlord Start a Background Check?

If a landlord is conducting a background check, they should first check that the identification card of the applicant and all of the information contained on the rental application are valid. This includes calling the applicant’s references and employers.

The application fee for the rental must be valid. The landlord should then access the applicant’s eviction records at the local courthouse.

The next step the potential landlord should take is to go to the police station to pull up the applicant’s arrest files. The potential landlord should then contact all of the previous landlords which are provided on the rental application.

This is an important step which can inform the potential landlord if a tenant has a history of any of the following:

• Damaging property;
• Complaints from neighbors;
• Police visits;
• Late payments; and
• Other issues.

A potential tenant should be able to provide a valid reason if they are not able to provide a rental history. The potential landlord should then perform a credit check.

Good credit will indicate that the potential tenant is able to pay their rent on time and it will also provide a history of their previous addresses. At this stage, a potential landlord may also perform a background check on evictions, addresses, as well as the individual’s criminal history.

This can be done by using one of the many web-based companies that are available to potential landlords. Landlords should take care to receive written permission to perform these checks.

If the applicant does not provide permission for these types of background checks, the potential landlord must respect that decision but keep in mind that it is unusual for a tenant to decline giving permission for these types of checks.

What Happens After a Background Check?

If all of the screening checks discussed above check out okay, the next step for a potential landlord is to meet the prospective tenant in person. There is nothing which substitutes for a meeting in person where a potential landlord is able to gauge the personality of the applicant.

During the interview process, a landlord should consider several factors prior to making a decision, including:

• The tenant’s reason for moving;
• The move in date;
• References;
• The intended rental term;
• The number of people living on the property;
• The tenant’s employment status, including how much income and how long has the tenant held the position;
• Whether the tenant keeps pets; and
• Whether the tenant smokes.

The first two issues are important because they can reveal whether a tenant may be troublesome in the future. If a tenant desires to move in very soon, such as the next day, it may indicate that the tenant is either desperate or a poor planner, neither of which may be attractive characteristics for potential tenants.

The tenant’s reason for moving is also very important because if a tenant has been recently evicted or has lost their employment-provided housing may continue these patterns in the future.

What about Commercial Tenants?

A commercial tenancy will not differ much from a residential tenancy. The overall issue will be the same in both situations.

That is, will the tenant be able to pay their rent on time. The purpose of a commercial tenancy, however, makes the screening process different from the screening process used for a residential tenancy.

First, a potential landlord will want to assess the financial stability of the business. Sales numbers, creditors, and debts, are essential information to review.

It is also important to consider if the business has filed bankruptcy. If the business is a newly opened business, it may be prudent to perform a personal background check on the owner or owners.

With a commercial tenant, a risk assessment should be a higher priority than with a residential tenant. Risk assessment includes measuring how likely it is that the tenant may become a nuisance or do something which may result in the landlord having to evict the tenant.

A potential landlord should ensure that the commercial tenant has all of the required licenses and, in addition, is complying with all the applicable laws. A potential landlord should also have an understanding of the purpose of the tenant’s business.

For example, evicting a tenant for selling medical marijuana can be expensive and time consuming.

Do I Need a Lawyer?

The laws governing landlord-tenant relationships can be complex. If you have any issues, questions, or concerns related to these issues, it may be helpful to consult with a landlord tenant lawyer.

If you are a landlord, your lawyer can assist you with complying with applicable laws as well as to develop a process which screens out tenants that may cause trouble in the future. If you are a tenant, your lawyer can advise you regarding the types of background checks that will be conducted and what you are required to allow.

If there are any issues related to discrimination, either as a landlord or a tenant, your lawyer can assist you both with avoiding these issues and resolving any disputes which may arise related to this issue.