Posted by & filed under Tenant Screening.

How Do I Screen Tenants In California?

If you’re a landlord in California, you’ll find that the Golden State tends to handle tenant screening a little differently compared to the rest of the nation. To help you stay compliant with the law—and make the most informed rental decisions—here are some of the most important things you should know about screening tenants in California. Please note that this is for informational purposes only and is not intended as legal advice. 

Understanding California Tenant Screening Laws

As a landlord, there are several important laws you should be aware of when screening California applicants:

  • -As of February 2022, rental application fees are capped at $52.46 and should not exceed your out-of-pocket costs. 
  • -You can charge a maximum security deposit of up to two times your monthly rental rate or up to three times your monthly rental rate if the rental property is furnished. 
  • -You’re required to provide a copy of the applicant’s credit report if they request it. 
  • -You can only run a background check on an applicant if you have their signed consent.

It’s also worth noting that the application fee is usually non-refundable and separate from the security deposit. However, you aren’t required to charge an application fee. If you charged more for the application fee than your actual out-of-pocket costs, you must return the remainder of the fee to the applicant. 

Although you may pass along the cost of screening to your applicants, you must provide each applicant with a written receipt with itemized costs. This step isn’t necessary if you use our RentalConnect service because the applicant pays for the cost of the screening directly. 

Tenant Screening Center offers a variety of free resources for landlords, including state-specific rental applications, pet addendums, and more. Click here to find the form you need. 

The Tenant Screening Process 

Regardless of the state your property is in, every landlord should develop a list of screening criteria that can be referenced when selecting new tenants. Here are some examples of criteria you may wish to include:

  • -Must be fully employed and make 3 times the monthly rent
  • -No smoking 
  • -No pets
  • -No violent crimes
  • -No previous evictions

When selecting tenants, you need to make sure your criteria, marketing, and screening processes don’t discriminate against any of the protected classes listed in the Fair Housing Act. While federal law identifies 7 protected classes, there are several additional classes listed in the California Fair Housing Act. This includes:

  • -Race, color
  • -Religion
  • -Sex, gender, gender expression
  • -Marital status
  • -Sexual orientation
  • -Ancestry, national origin
  • -Mental or physical disability
  • -Familial status
  • -Citizenship, immigration status
  • -Primary language
  • -Age
  • -Source of income
  • -Military or veteran status

Writing down your rental criteria is a critical first step in protecting yourself against Fair Housing Act violations and potential lawsuits. The next step is to ensure that you screen each of your applicants consistently, without making any changes or exceptions to your screening criteria. Even if you were to make exceptions on a case-by-case scenario, this could be seen as discrimination. Likewise, you’ll need to ensure all marketing efforts and screenings are conducted in a way that avoids any form of discrimination. 

For more insights into tenant and landlord rights that are specific to California, click here

Once you’ve chosen a few promising applicants, it’s time to screen them. We recommend a minimum of a credit check and background check. A credit check will give you insight into an applicant’s debt history, while a background check will give you information on their eviction history, bankruptcies, judgments, liens, and address history. 

Don’t Skip Tenant Screening 

Although it may be tempting, you never want to select a tenant based on their likeability or your gut feeling. Even though an applicant may seem like a good fit, there’s no way to know whether they’ll be able to pay rent on time or if they have a history of being a responsible tenant without screening them. 

As there may be specific regional or municipal tenant-landlord laws, it’s always recommended to review your local laws to ensure your properties and processes are fully compliant.

Order your tenant screening reports today or feel free to contact Tenant Screening Center at 800-523-2381.  

Posted by & filed under Rental Verification.

When searching for a new tenant, it’s always advisable to check an applicant’s rental history and talk with their previous landlords to find out what they were like as a tenant. If you’re a first-time landlord, however, this step may seem a bit daunting. How can you verify the applicant’s rental history?

To help you, we’ve created a step-by-step guide, including a list of sample questions you can ask previous landlords to ensure you’re choosing the best applicants for your properties. Please note this is for informational purposes only and is not intended as legal advice. Laws may vary based on your location.

What Does Rental Verification Involve and Why is it Important?

Home buyer protection planning concept with house key in insurance broker agent's hand coverage or in salesman person

Rental verification involves contacting an applicant’s previous landlord to confirm the rental history provided by the applicant is truthful and accurate. Although screenings like credit checks and background checks can give you insights into an applicant’s financial responsibility, criminal history, and eviction history, they don’t provide information about how a renter behaved as a tenant. Tenant verifications give you first-hand knowledge of the previous landlord’s experience with the applicant.

This is important because it can help you determine if the applicant has been truthful about their rental history. If they’ve falsified some of their information, it could be a red flag; it’s worth reviewing the rest of their application more closely—or in some cases, considering another applicant instead.

In addition, an applicant’s previous landlord can give you valuable information to base your rental decision on, including factors like:

  • The applicant’s payment history
  • How they escalated maintenance issues and requests
  • How they treated the landlord and other tenants
  • How well they kept the property maintained
  • Whether there were any lease or rental agreement violations

These insights, combined with tenant screening reports, will help you determine whether the applicant is the right fit for your property.

How to Verify an Applicant’s Rental History

There are essentially two ways you can handle rental verifications. You can contact the applicant’s previous landlords directly, or Tenant Screening Center can do it for you. We do traditional rental verifications, which means we contact the landlord directly to get details on the following information:

  • The applicant’s current and previous address
  • The length of time they lived at each property
  • Whether the applicant gave proper notice of their intent to move
  • The applicant’s current and previous monthly rent payments
  • Whether there have been any late payments, bounced checks, balances owed, complaints on file, or legal notices
  • Whether the applicant has any pets
  • Whether the applicant would be eligible to re-rent either property
  • Verification of the applicant’s current employer
  • The length of time the applicant has worked at the company, their position, salary, and employment status (full-time vs. part-time)

For $15.95, you’ll receive a form filled out with the above information. For the most complete information on your applicant, we recommend pairing your tenant verification with a credit report and background check.

If you’d prefer to conduct a tenant verification yourself, here’s a list of questions you should consider asking:

  • Can you confirm that the applicant rented from you?
  • Did the applicant pay their rent on time?
  • Did the applicant keep the rental property clean and well-maintained?
  • Did the applicant let you know when something needed repair?
  • Was the rental property clean and in good condition when the applicant moved out?
  • Was the applicant disruptive or rude to other tenants or neighbors?
  • Were any of the terms of the lease or rental application violated?
  • Did you offer lease renewal to the tenant?
  • Were there any complaints made against the tenant?
  • Were there any red flags?
  • Would you rent to them again?
  • Is there anything else you can tell me about the tenant?

Asking these questions will help you select a tenant who has a proven track record of being a reliable, responsible renter who will take good care of your property.

Get Your Tenant Screening & Verification from Tenant Screening Center

Whether you’re a new landlord or a seasoned pro, tenant screening and verification can take up valuable time if you choose to do them on your own. Save time and get complete peace of mind with tenant screening reports and verifications from Tenant Screening Center. We help streamline the process so you can focus on what’s important: your business. Our verifications are low cost and with RentalConnect, the cost of our screening reports is deferred to your applicants.

Order your tenant screening and verification today, or feel free to call us at 800-523-2381 for more information.

Posted by & filed under Uncategorized.

In an ideal world, every one of your tenants would follow the stipulations of your lease to the letter. However, it’s likely that at some point, you’ll have a tenant who violates the terms of your lease. Whether your tenant has repeated noise complaints or is late on the rent, these situations can be difficult to deal with—especially if your tenant is a repeat offender.

the notice of eviction of tenants hangs on the door of the house, front view

Unfortunately, there’s no one-size-fits-all solution to lease violations; each of them must be dealt with on a case-by-case basis with consideration of your tenant’s history. All lease violations should be addressed, but some are more serious than others. With that in mind, here’s a look at some common lease violations and the steps you can take to resolve them.

Please note this is for informational purposes only and is not intended as legal advice. Laws may vary based on your location.

What’s Considered a Tenant Lease Violation?

In the simplest terms, a lease violation is a breach of contract by your tenant. When you presented your lease (or rental agreement) to the tenant and they signed it, they were agreeing to follow the conditions you laid forth in order to rent your property.

Any situation where they fail to comply with the requirements and conditions of your lease is considered a lease violation—regardless of whether it’s a minor breach of contract or a major one. As the landlord, you ultimately have to decide how you’ll handle the violation and what consequences (in any) there will be. When determining consequences, they should reflect the severity of the violation. For example, a one-time parking space violation should have a lighter consequence than a tenant who’s repeatedly late on rent.

Keep in mind that you’re also bound by the terms of the lease, so it’s important to ensure you’re following them to the letter. One of the most common lease violations committed by landlords is the failure to respect tenants’ privacy. This can cause a variety of issues for you, including withheld rent, fines, and the tenant breaking their lease agreement. Severe landlord lease violations can also result in legal trouble.

For this reason, it’s important to play your part. Model good adherence to the terms of your lease and prioritize addressing your tenants’ requests and concerns—particularly if they’re related to the habitability of your properties. A strong landlord-tenant relationship can greatly reduce the chances of lease violations from both parties.

Common Tenant Lease Violations

Some of the most common tenant lease violations include:

  • Habitually Late Rent Payments
    Sometimes unexpected things happen in life, and a tenant may be behind on their rent. If they’re a responsible tenant with a good payment history, it’s worth giving them a little leeway. However, if they may a habit of paying their rent late, it’s time to remind them of the terms of the lease they signed.

    To prevent rent payment issues, make sure you have payment due dates clearly stated in your lease so that even a single occurrence of late rent is a lease violation. To give tenants even more incentive to pay their rent on time, you may also want to consider adding a late payment or lease violation fee to the terms, which, depending on the situation, can be waived at your discretion.
  • Noise Violations
    If you’ve ever had a noisy neighbor, you understand how disruptive it can be. Most standard leases should have a clause regarding noise violations that covers times when loud noises aren’t permitted and what’s considered too noisy. You should always address noise complaints you receive from other tenants or neighbors.

    Often, a phone call and reminder about the terms of the lease will resolve the issue. If the tenant tells you that they only had their music loud because another tenant had their music loud the day before, it’s best to talk to both of the tenants.
  • Long-Term Guests
    Tenants have a right to have guests at their homes, but there comes a point when a long-term guest is really an unofficial tenant living at your property without your permission. For this reason, you should have a clause in your lease that puts a limit on how long a guest can stay and still be considered just a guest. Any number of days that goes over your limit is a lease violation. Be sure to include a consequence for violating the lease, such as raising the rental fee for each month the guest lives at the property or terminating the lease agreement.
  • Unauthorized Pets
    Pets can cause significant property damage, which is why many landlords prohibit them from their rentals. Whether you allow pets or not, if your tenant adopts a new pet without telling you, they’re violating the terms of the lease. It’s especially important to address the matter if you don’t allow pets, as other tenants at the property might judge the allowance of the pet as unfair treatment.

    Make sure your pet policy is clearly stated in the lease; if you allow pets, be as specific as possible about which pets you allow. For example, if you allow dogs, are there any breed or size restrictions? You should also include a clause stating that tenants must notify you of any new additions to their homes. As a consequence of violating the lease, you can start with a violation letter, impose a fine, or require an additional deposit. If the tenant doesn’t cooperate, consider issuing a 3-day notice to cure or quit.
  • Unauthorized Renovations
    Although tenants have the right to decorate their living space, any renovations they want to make should be discussed with and handled by you. This includes things like knocking out walls, painting rooms, installing new windows, or changing the locks.

    Most standard leases require renovations to be approved by the landlord in writing; failure to do so is a violation of the terms of the lease and should come with some form of consequence—even if they’re a simple misunderstanding. Depending on the situation, this could be in the form of a lease violation letter, a fee, or even eviction for a more severe violation.
  • Unsanitary Conditions
    Tenants have a responsibility to keep your property clean and habitable; otherwise, you may end up having a pest problem on your hands. Unsanitary conditions also create an unsafe environment for your other tenants and neighbors—so it’s important to address the issue immediately.

    One of the best ways to prevent unsanitary conditions is to inspect the property before a tenant moves in. Take photos and document the condition of the property, and make sure to include a clause in your lease stating that the tenant is expected to keep the property clean and in good condition. If the tenant fails to do this, you can give them a warning to clean up their act; if they continue to violate the terms of the lease, you can pursue eviction.
  • Property Damage
    Normal wear and tear are expected at any rental property, but true damage can quickly drive down the value of your property and be expensive (and time-consuming) to repair. To prevent disputes, take photos and document the condition of your property before a new tenant moves in, and make sure to have them sign the photo log to acknowledge the accuracy of your move-in inspection.

    Perform property inspections from time to time so you can spot potential property damage before it gets worse. If your tenant causes property damage, let them know they’re violating the terms of the lease and that they’ll be responsible for as much of the repair costs as your local laws allow.
  • Illegal Activities
    Illegal activities, such as drug use or gang activity, puts you and neighboring tenants in jeopardy, so they need to be dealt with right away. Contact law enforcement and serve a notice to serve or quit immediately.

How to Write a Lease Violation Notice

A lease violation notice is an official notice informing your tenant that they’ve violated the terms of the lease. It should include the time period you’re allowing them to correct the issue, as well as any consequences of their actions. In most cases, landlords will send out a lease violation notice before moving forward with the eviction process.

Here’s what your lease violation notice should include:

  • The address of the rental property
  • The tenant’s name
  • The date of the notice
  • A description of how they’ve violated the lease, as well as dates and times (if applicable) of the occurrence
  • The deadline to correct the issue
  • The consequences the tenant faces if they fail to resolve the issue or continue to violate the lease

A lease violation notice should be polite and professional, but firm. Tenants can violate their lease unintentionally, so keep that in mind as you write the letter. After all, turnover can be expensive and time-consuming, so it’s best to foster a healthy relationship with your tenant, even in cases where they’ve violated the lease.

Before sending the notice, it’s a good idea to check your local laws to ensure you’re giving the tenant the right amount of time to correct the issue. Send the notice via certified mail, so you can be sure your tenant received it. If you’ve served the notice and the tenant violates the lease in the same way at a later date, you may want to consider eviction. Check your local laws or consult with a lawyer to decide the best course of action.

Reduce Lease Violations with Tenant Screening

Lease violations are relatively common and impossible to completely prevent—however, you can greatly reduce the number of lease violations by using tenant screening to find the most qualified renters for your property.

All of our screening services are available online 24/7; we also offer RentalConnect, which allows you to defer the cost of the report to the applicant. As with all our reports, we strongly suggest reviewing your local laws to ensure you’re using the information legally. Some states and local governments have enacted limits to when certain types of screenings can be conducted and under what circumstances. For more information and tips on tenant screening, visit our blog or contact us at 800-523-2381.

Posted by & filed under Eviction.

the notice of eviction of tenants hangs on the door of the house, front view

As pandemic-related rent relief has started to run out, eviction filings have been on the rise across the country—in fact, they’re above their historical averages in half of the 1,059 counties tracked by Legal Services Corp, a federally-funded legal aid group. In combination with inflation, industry experts, housing advocates, and government officials warn the problem is likely to worsen over the coming months.

The End of Eviction Moratoriums and Dwindling Rental Assistance Funds

With moratoriums and rental assistance at an end, we could be reaching the tsunami of evictions predicted early in the pandemic.

During 2020, evictions fell after the federal moratorium was enacted. Although the moratorium was lifted in August 2021, the number of evictions stayed below typical levels in the majority of cities because of the federally-funded rental assistance programs. However, much of the funding for rental assistance programs began to run out this summer. The Treasury Department estimates that out of $46.5 billion, only $7 billion of the pandemic-era rent assistance funding more than 7 million renters rely on is left.

To make matters worse, Americans are struggling with a lack of affordable housing and pessimism over the state of the economy. According to a poll conducted by CNBC in October, 59% of voters anticipate a recession within the next 12 months. Even though the job market remains strong, approximately 7.8 million Americans were behind on their rent in October; of them, 3 million stated they believed they were likely to be evicted within the next couple of months.

The poll also found that 2.5 million people had experienced a rent increase of over $500 in 2022. Although rent increases have slowed with the growing economic uncertainty and inflation, rent prices are still up by 9% nationwide in September compared to average rents in 2021.

Many areas are currently seeing the highest number of evictions in years. In Arizona, Maricopa County had more than 45,000 filings in 2022.

Preventing Evictions at Your Rental Properties

Evictions are unpleasant for all involved. For landlords, they can be extremely costly and time-consuming. In addition, due to the uncertain economic conditions, many renters are delaying moving—which means it may take longer to find qualified tenants than it did in the past.

Although circumstances can change, tenant screening remains one of the best ways to prevent evictions. Credit reports, background checks, and other types of screenings allow you to get a clear picture of an applicant’s background and how financially sound—and responsible—they are. Tenant Screening Center offers a variety of premium tenant screening services that are paid for by your applicants, making them an easy, convenient, and cost-effective way to have peace of mind for your properties. Order your reports today or feel free to contact us at 1-800-523-2381.

Posted by & filed under Rent.

Rent due reminder on calendar

As a landlord, you probably rely on getting your monthly rent payments on time in order to make ends meet. But what should you do if your rent collection day has come and gone, and you still haven’t been paid? This is a scenario that worries new landlords and industry veterans alike, and it can be especially hard to know how to move forward when the tenant wants to pay rent, but can’t.

To help you navigate this tricky situation, here are five steps you can take—without compromising your business. Please note this is for informational purposes only and is not intended as legal advice. Laws may vary based on your location.

Steps to Take Before the Rent is Late

Whenever possible, the best time to determine what to do about late rent is to figure out an action plan before the lease is signed. Consider taking the following steps:

  • Evaluate how much you have in your emergency fund, factoring in the monthly expenses you plan to pay using your rental income. It’s generally recommended you save approximately 3-6 months’ worth of living expenses to account for any unexpected lost income.
  • Add an addendum to your rental agreement outlining everything your tenant should know about when you expect rent to be paid, what’s considered a late payment, and the consequences of paying rent late.
  • Let your prospective tenants know you’d like to form a transparent, compassionate relationship where they can discuss any issues that might come up, such as losing their job or breaking the lease. This will allow you to handle the situation as quickly as possible, should such situations arise.

If you’re able to take these steps before your tenant is late on the rent, you’ll save yourself a lot of stress and hassle.

Steps to Take After the Rent is Late

If the rent is already late, it’s important to stay calm and make sure you document everything.

  1. Evaluate your tenant’s history.

When determining your course of action, it’s important to consider the tenant’s history. For example, is this the first time they’ve missed a payment, or do they have a habit of being late? Did they give you a heads-up that they might be late on the rent—or did it come as a surprise? This will help you determine the best strategy for handling the issue.

  1. Send the tenant an informal notice.

If your tenant usually pays rent on time, send them an informal notice reminding them that they’re late on the rent payment. Be sure to include the following:

  • The original due date
  • How much rent you’re owed
  • How long they have to pay rent without penalty
  • Your late fee policy
  • The best way to contact you if they have any questions or concerns

It’s typically best to contact your tenant in person, via email, or by posting the notice on their front door. Keep in mind that it’s important to be compassionate about their situation, and try to learn more about the reason behind being late on the rent before you ask them for money. It’s possible they’ve lost their job, have a sick family member, or other sensitive situations. If they simply forgot, the notice should be a good reminder.

If your tenant is struggling due to some unfortunate circumstance, ask them if there’s any way to help. Some ways you might be able to help include:

  • A repayment plan
  • Accept a partial payment
  • Allow them to skip a month of rent
  • Adjust the due date to align better with their payday
  • Waive the late fee
  • Agree to accept lower rent payments

Whatever you decide, make sure to document the agreement in writing and have your renter sign it.

  1. Give the tenant resources for rental relief.

Evictions are costly and time-consuming, so in some cases, it might be in your best interest to offer rent relief resources to your tenant. There are a number of organizations that help tenants pay their rent, including:

  • The Salvation Army
  • Catholic Charities USA
  • The U.S. Department of Housing and Urban Development’s Housing Choice Voucher Program (Section 8)
  • Modest Needs
  • The USDA Rural Development Program
  1. Find Alternatives to Eviction.

If the tenant is unable to get rental assistance (or chooses not to apply), it’s best to discuss your legal options with a real estate attorney. Although eviction is always an option, there may be more viable alternatives, such as:

  • Pay-and-stay plan, which is a formalized repayment plan that allows you to evict the tenant if they are late on rent in the future.
  • Cash-for-keys, which allows you to pay the tenant a lump sum in exchange for them moving from your property.

Although you probably want to avoid paying money to resolve the situation, the cash-for-keys lump sum will be less than what you’d pay the court for an eviction hearing.

  1. Send the tenant a notice to pay or quit.

If the above solutions haven’t resolved the issue, you may need to send the tenant a notice to pay or quit, which is the first step in the eviction process.

Eviction is a lengthy process and one that most landlords want to avoid at all costs. Unfortunately, there are times when it’s the only solution. To prevent issues with late rent payments, make sure you’re conducting thorough tenant screening on all applicants. Although it can’t account for every situation you’ll encounter, tenant screening helps you find responsible tenants who have a history of paying rent in full and on time. Order your tenant screening reports online today or contact Tenant Screening Center at 1-800-523-2381.

Posted by & filed under Rentals.

With the rise of gun violence in schools and public places, should landlords consider banning guns at their rentals, too? This is a question that doesn’t have an easy answer. In some cases, it’s a matter of what the state law says and in others, it’s a matter of personal preference. Before making a decision for your rentals, it’s important to be aware of what your local and state laws say on the matter. After that, you’ll need to weigh all sides of the argument to make an informed decision for your properties. Here are some of the most important considerations you should keep in mind.

Please note that this is for informational purposes only and is not intended as legal advice. Local and state laws may vary based on your location.

Which States Have Laws Regarding Guns at Rental Properties?

State laws vary on the issue of whether landlords can restrict or ban guns at their rental properties, as well as gun possession by tenants in general. Currently, only four states have specific laws on how landlords can handle gun possession at their rentals:

  • Minnesota: A landlord cannot restrict the lawful carry or possession of firearms by tenants or their guests.
  • Tennessee: A private landlord can prohibit tenants, including those who hold handgun carry permits, from possessing firearms within a leased premise. Such a prohibition may be imposed through a clause in the lease.
  • Virginia: Public housing prohibits landlords from restrictions on gun possession for tenants, and landlords cannot use a prohibition clause in their lease.
  • Wisconsin: Although this state has laws regarding where a weapon can or cannot be possessed, the stipulations are complicated.

All the other states (including California, Arizona, Colorado, Oregon, Utah, and Washington) don’t have specific laws regarding the issue, which means private landlords can choose whether they want to allow guns on their properties or not.

The Second Amendment and Other Considerations

What about the second amendment? It’s unlikely to apply to landlords who aren’t government entities or who receive government funding for rental assistance at their properties. However, private landlords should keep in mind that prohibiting tenants from having guns can potentially raise insurance and constitutional issues. However, one way to avoid these could be to add a clause to your lease banning the possession or display of firearms in common areas—as well as in the unit, if the handling of guns can be seen from the outside.

If you’d like to prohibit guns completely on your property and the state laws are silent on the issue, you’re within your rights to do so. So far, there hasn’t been a court case focused on Second Amendment rights in rental properties. However, a private landlord’s tenant could potentially bring a case to court on the grounds that they believe they have the constitutional right to protect themselves.

Another issue to consider is liability. For example:

  • If you allow firearms on your property, could you be liable if someone gets hurt?
  • If you prohibit a tenant from having a gun, and they are attacked in their home and are unable to defend themselves, could you be liable?

Unfortunately, there isn’t a clear-cut answer; each situation would need to be determined on a case-by-case basis. From a practical perspective, there’s still the potential of being sued if a tenant or their family is injured or killed because the landlord took their personal constitutional right away—even though the tenant agreed to the stipulation when they moved in.

On the flip side of the issue, if weapons are allowed on the property and a tenant injures or kills someone with a gun—intentionally or negligently—the landlord will likely be seen as partially liable. If you allow firearms on your property, it’s important to review your insurance policy to find out what is and isn’t covered.

Denny Dobbins, general legal counsel and vice president of Crimshield and RentPerfect weighed in on the matter: “It is possible that if a landlord has a no-weapons policy in the lease that the landlord will immediately become a target by a victim of a tenant shooting injury claiming the landlord should have known about the tenant’s possession of the weapon and should have taken steps to remedy the possession, although not at all practical.  If there is no prohibition for tenants having weapons, then all tenants know of the ‘no-prohibition’ standard, and in my opinion, the risk to the landlord diminishes not just for injuries to others, but for constitutional claims.”

Dobbins also suggested that two Supreme Court cases regarding the Second Amendment potentially make a tenant’s right to possess a weapon in their rental a personal right, and therefore a protected class: District of Columbia v. Heller and McDonald v. City of Chicago.

The Second Amendment: District of Columbia v. Heller & McDonald v. City of Chicago

The meaning of the Second Amendment has been debated many times because it refers to having a “well-armed militia” as well as “the people’s right”—rather than an individual’s right. This has led to confusion over whether the “right to bear arms” is actually a personal right, rather than the right of the people to have a prepared militia.

In the 2008 case, District of Columbia v. Heller, the plaintiff challenged a Washington D.C. law prohibiting the possession of handguns. In a 5-4 decision, the Court found that the law was unconstitutional and stated that the Second Amendment established the individual right for U.S. citizens to possess firearms. The Court also established that the government can impose restrictions on firearm possession when it comes to felons or mentally ill individuals.

In 2010, the Court strengthened Second Amendment protections in the case McDonald v. City of Chicago. In this case, the plaintiff challenged the constitutionality of the handgun ban in Chicago, which prohibited nearly all private citizens from possessing a handgun. In a 5-4 decision, the Court cited the Fourteenth Amendment (which prohibits states from passing laws that are contrary to federal law) and held that the Second Amendment applied to the states as well.

With this in mind, it seems possible that a private landlord who prohibited their tenants from possessing firearms on their property could be successfully challenged in court based on the prior rulings.

Another important consideration is enforcement. If you’d like to ban firearms from your rental property, another important consideration is how can you actually enforce the ban? There’s no way to really know what a tenant has in their home or brings onto the property. Landlords can’t conduct searches. Even if the state law allows landlords to prohibit guns, there’s no practical way to enforce it. In states that have strict gun laws, criminals still find a way to get firearms—even state governments have difficulty enforcing the laws.

Consider Adding Specific Clauses to Your Lease

Obviously, prohibiting guns in rental properties comes with some complex issues and important legal considerations.

In a 2006 Kansas City case, a landlord’s lease agreement specifically gave the tenant the right to sole possession of the residence, prohibited illegal activities on or near the premises, and prohibited the unlawful discharge or possession of firearms. During the tenancy, a minor accidentally shot and killed the tenant’s guest. Although the landlord and tenant were both sued for damages, the court found the landlord wasn’t liable because they had granted sole possession of the property to the tenant.

However, if a landlord is aware of a tenant at a multifamily property who possesses a weapon and is acting erratically, it’s the landlord’s responsibility to keep the other tenants on the property safe. It’s recommended to consult with legal counsel to make a determination of the risk to the other residents and the property. If it’s determined that the tenant poses a threat, the landlord should take reasonable steps to mitigate that risk. If guns are allowed, it’s important for the landlord to effectively monitor the property to make sure they aren’t being brandished or misused.

If you allow guns at your property, here are some examples of clauses you may want to consider adding to your lease:

  1. This is a landlord-tenant relationship and the landlord has no control over your unit or the home. Tenant has sole control of the dwelling unit.
  1. If you have any firearms, you must keep your weapons inside your unit at all times and out of view of open windows and doors, absent legitimate self-defense or the defense of others.
  2. If you openly bring a firearm into the common areas, you will be evicted. You must keep your weapon to yourself, safely tucked away in the private confines of your apartment unit or home, and not visible to other tenants, neighbors, or staff.
  3. Weapons of any kind, including, but not limited to, dart guns, air guns, BB guns, slingshots, handguns, rifles, or any mechanism that could be used to propel an object that could cause harm to a person or property, are not allowed in:
  • The common areas
  • The office
  • On the premises outside of the actual unit

and are not allowed to be displayed, shown, exposed, demonstrated, or exhibited anywhere in the community premises, except in case of:

  • Self-defense or the need for imminent and immediate protection of residents’ life or property
  • For self-defense or immediate and imminent protection of resident, resident’s occupants, guests or invitees’ life, or property. 

If a resident desires to possess a legal weapon in their unit, the resident must safely and inconspicuously carry said legal weapon to and from the resident’s unit in a manner that resident ensures other residents and staff do not see the weapon. Illegal weapons are never allowed visibly on the property outside of the unit. If the resident or resident’s occupants do possess a legal weapon in the unit, the resident shall be responsible for the proper and safe possession, handling, and storage of said weapon. The landlord is not and shall not be responsible in any way to the resident, occupants, guests, or invitees for any accidental, negligent, or intentional act involving any weapon or discharge thereof on, near, or off the property.

Ultimately, every private landlord will need to decide how to approach the subject of guns at their properties based on all sides of the issue. Before making a decision, you may want to discuss it with a lawyer and your insurance broker to ensure that you have all your bases covered.

Posted by & filed under Rentals.

Credit score report research document vector illustration, flat cartoon ranking loan history record investigating or analysis via magnifier glass

Credit reports offer invaluable information to base your rental decisions on credit scores, tradelines, income-to-debt ratio, and much more. One thing you won’t find on a credit report, however, is an applicant’s rental history. Since landlords and property managers aren’t creditors, they don’t automatically report tenants’ payment history to the consumer credit reporting bureaus.

What’s Included in a Credit Report?

Most of the information in an applicant’s credit report comes from financial institutions, such as banks, credit unions, and lenders. In some cases, they may also contain information from the courts. Credit reports contain the following information:

  • Personal information: The applicant’s name, birth date, phone number, current address, past addresses, and employers
  • Accounts: Existing tradelines, like loans, lines of credit, credit cards, collection accounts, last reported balances, payment history, and account statuses
  • Public records: If the applicant filed for bankruptcy, it will show up here.
  • Inquiries: When an individual or company requests a credit report or the individual applies for credit, it will show up as an inquiry for two years; only hard inquiries affect the credit score.

How to Interpret the Information on a Credit Report

If you can’t see rental history on a credit report, how can you determine how an applicant will behave once they’re your tenant? Credit reports can give you a reasonable indication of an applicant’s creditworthiness and ability to manage their finances. Although you won’t receive a list of their on-time rent payments, a credit report can provide a lot of information to help you determine if they have a history of responsibly managing financial responsibilities, like paying rent and bills.

For example, if an applicant has several accounts that show on-time payments over the course of several years, this is a good indication that they’re consistent with meeting financial responsibilities on time. Looking at the length of time they’ve stayed at a job, as well as how many accounts they have open and their overall payment history paint a picture of how stable an individual is.

Total Debt and Rent-to-Income Ratio:
The amount of debt an individual has affects their ability to afford the rent each month. If an individual has an excessive amount of debt, especially in comparison to their total income, it will make it more difficult to pay their rent on time. The gold standard for rent-to-income ratio is 30%, which means no more than 30% of an applicant’s gross income should go to rent.

Open and Closed Accounts:
Looking at an applicant’s open and closed accounts can also give you some indication of how they’ve handled their finances. Open accounts are typically revolving credit (like credit cards) while closed accounts can either be an account that was paid in full or accounts that still have a balance due. “Satisfactory” accounts are closed accounts that have been paid in full. When selecting an applicant, you should check to see whether their closed accounts were in positive standing.

Bankruptcies and Collections:
Bankruptcies can be a red flag that the applicant has difficulty managing their finances responsibly. Bankruptcies stay on a credit report for up to 10 years. On a credit report, you’ll be able to see all the accounts that were included in the bankruptcy. A tenant with a discharged bankruptcy is less of a risk than one who has a pending bankruptcy; with a pending bankruptcy, the applicant may be relieved of all financial obligations—which includes rent payments. If a tenant failed to make payments on an account—or even rent payments to a past landlord—and they were reported to collections, you’ll be also able to see this on a credit report.

Consider Adding Tenant Verification to Your Credit Report

Although credit reports are one of the main ways to determine an applicant’s worthiness as a tenant, adding on tenant verification can give you a more complete picture of what you can expect if you choose to rent to an individual. With a tenant verification, we contact the applicant’s previous landlords on your behalf and you’ll receive the following information:

  • The applicant’s current and previous address
  • The length of time they lived at each property
  • Whether the applicant gave proper notice of their intent to move
  • The applicant’s current and previous monthly rent payments
  • Whether there have been any late payments, bounced checks, balances owed, complaints on file, or legal notices
  • Whether the applicant has any pets
  • Whether the applicant would be eligible to re-rent either property
  • Verification of the applicant’s current employer
  • The length of time the applicant has worked at the company, their position, salary, and employment status (full-time/part-time)

With our tenant verification services, you can make sure the information your applicant provided is consistent with this report—and that they have a proven history of meeting their rental responsibilities. For more information, contact TSCI at 800-523-2381 or order your reports online.

Posted by & filed under Tenant Screening.

Landlord tenant law book on the lawyer table.

For most landlords, finding great tenants is their top priority. Once you’ve determined the criteria for your ideal tenant, the next step is to screen applicants. Tenant screening is essential for finding the right tenants, so it’s important to know how to interpret the reports you receive. Here are some tips on how to read these reports, so you make the most informed rental decisions. Please note that this is not intended as legal advice, but for information only. Laws may vary depending on your location.

Understanding Tenant Screening Reports

Tenant screening reports use an applicant’s social security number to pull their credit history, criminal history, eviction history, and bankruptcies (depending on your state laws). Using the information provided in reports from TSCI, you can spot potential red flags that can help you steer clear of a problematic tenant.

Although most of the information provided in our reports is easy to understand, here are some of the most important sections to pay attention to and what they mean.

  • Credit score: The credit score shows the applicant’s credit activity. It’s important to understand when looking at the credit score that there’s a difference between the numbers represented by VantageScore and FICO. Although one number may seem too low in one system, it may be a good score in the other. If you’re unfamiliar with the differences between the two systems, we recommend reviewing the linked article.
  • Tradelines: the total number of accounts the applicant has opened, including credit cards, mortgages, and car loans.
  • Currently delinquent: the number of accounts that have not received at least a minimum payment for 30 days or more.
  • Collections: the number of past-due accounts that have been sent to collections.
  • Public Records: the number of tax liens and civil judgments, as well as any details pertaining to them.
  • Past due: the sum of the minimum payments the applicant missed plus any late fees that were added to their accounts since their last payment.
  • Utilization: the sum of all the applicant’s balances divided by the sum of their credit card limits.
  • Income-to-rent ratio: the monthly or annual gross income the applicant needs to be able to afford rent each month. Tenants should have at least 30% of their income left for expenses beyond rent and loan payments.
  • Late payments: how many late payments the applicant has made.
  • Public records: the number of tax liens and civil judgments on file for the applicant, as well as details on the records and when they were reported.
  • Eviction Records: details on any evictions that are on record, including the date of the judgment.
  • Criminal Records: the number of criminal or court records on file, as well as the case number and the court’s contact information. This can be used to contact the court if you’d like to learn more. The report also includes a brief overview of the applicant’s sentence and other pertinent details, such as when their probation is set to expire.

To see a sample of what you can expect to receive with our tenant screening reports, click here.

Protect Your Property with Tenant Screening from TSCI

At Tenant Screening Center, our goal is to help you find responsible tenants who consistently pay their rent on time and will treat your property with respect. TSCI tenant screening reports provide invaluable information to help you protect your property by selecting the best possible tenants. Our tenant screening reports are available online and allow you to defer the cost of the report to the applicant. With several options to choose from, we make it easy for you to get the information you need for complete peace of mind. Order your reports today, or feel free to contact us at 800-523-2381.

Posted by & filed under Tenant Screening.

You likely understand the importance of screening potential tenants for a residence, but many landlords don’t realize they should also be screening commercial tenants. Although it may seem like (as business owners themselves) commercial tenants would be more responsible tenants than residential tenants, this isn’t always the case. Unfortunately, there is still risk involved with any tenancy and if you’re not diligent, you could end up with a commercial tenant who refuses to pay rent on time or simply doesn’t take good care of your property.

estate agent giving house keys to woman and sign agreement in office

By screening potential commercial tenants, you can better determine whether they’re a good fit for your commercial space. TSCI’s CommercialConnect offers comprehensive commercial tenant screening, including a company credit report, the signer’s credit report, and a national criminal background check. Keep in mind that the following is for informational purposes only and is not intended as legal or financial advice. Laws regarding tenant screening can vary depending on your location.

Steps to Take When Selecting Commercial Tenants

  1. Interview potential tenants

Although some tenancies can work out well without meeting the lessee in person, it’s always a good idea to meet and interview your potential tenants. This can be done in person or in a virtual meeting. Some topics to inquire about include:

  • Income
  • Employment
  • Criminal background
  • Previous evictions
  • Rental history

Although this is all information you’ll receive on a commercial tenant screening report, it’s essentially a pre-screening step that can help you determine whether the tenant meets your basic criteria before moving forward.

  1. The Application Process

If the interview goes well, the next step is to have the tenant fill out a commercial rental application. This will help you collect pertinent information about the prospective tenant. Typically, the rental application should include:

  • The legal business owner and company name
  • Date the business was established
  • Type of business
  • Rental history
  • Financial information

It’s also recommended to ask about the potential customers who will be visiting the space; if the business is already an established one, you may always want to ask to see financial statements to ensure the company is a viable one. If the company is a start-up, consider asking to see its business plan and names of their guarantors.

  1. Evaluate the Terms of the Lease

Even though things can change quickly in the business world, most commercial tenants will know whether they’re interested in a short-term or long-term lease. Although most landlords prefer long-term leases, there are many reasons why a potential tenant may request a month-to-month lease or a 1-year lease. Either way, determining the leasing terms upfront is an important step before deciding whether the tenant is a good fit.

  1. Check for Guarantors

Many businesses have financial backers who can serve as lease guarantors should the business owner be forced to default on their tenancy. If this is a new business, guarantors can be especially valuable. If the tenant has multiple guarantors, this shows they’ll have adequate financial support in case the market or economy changes or their business struggles to find ground. If the applicant doesn’t have guarantors, it’s even more important to pay close attention to the company’s business model, financial projections, and screening report to determine whether they’d be a risk.

  1. Conduct a Commercial Tenant Screening

If the prospective tenant has met all your criteria so far, the next step is to conduct a thorough tenant screening. Using TSCI’s CommercialConnect will reveal everything you need to know about the tenant, including the signers:

  • Financial summary
  • Credit score
  • Balances
  • Credit lines
  • Prior inquiries
  • Public records
  • Employment and address history

You’ll also receive in-depth and important information about the financial state of the business, including red flags like:

  • UCC (Uniform Commercial Code) Filings: These determine whether the lender has an interest or lien against an asset being used to secure financing—which can increase their overall credit risk and scoring.
  • Bankruptcy: Bankruptcies are a sign that a business no longer has the sufficient cash flow to pay its debts or operate its companies.
  • Collections: Creditors often turn to collection agencies after multiple failed attempts to collect the debts they’re owed.

  • Credit Limit Recommendations: This is the maximum amount of money a lender will allow the business to borrow while using credit cards or its line of credit.

  • Judgment Filing: Judgment filings are court decisions that have been entered into the public record. If a judgement is entered against a business, debt collectors have more tools at their disposal for collecting the debt, like garnishing income or bank accounts.

If allowed in your area, you may also want to conduct a national criminal check, which will show:

  • Felonies
  • Misdemeanors
  • Sex offender status
  • Other convictions at the state and federal levels
  • Evictions

Ideally, the tenant’s screening report will be free of red flags, with a good rental history, excellent credit score, and other signs of financial stability and responsibility.

  1. Make a Final Risk Assessment

If you have more than one prospective tenant, you should conduct a final risk assessment to determine which is the best candidate. You’ll want to weigh factors like references, credit scores, reliability, and results of the background check. Stay objective through the process and consider the interviews as well as the screening reports.

With commercial real estate in high demand, there are likely to be several tenants interested in renting your space. Make sure you’re taking the time you need to screen each applicant thoroughly. CommercialConnect is specifically designed for commercial landlords and screens both businesses and the lease signer for only $75.00. You also have the option of adding on a national criminal background check. Our screening reports are fast, easy to use, and available online 24/7. If you have any questions, feel free to call us at 1-800-523-2381 or fill out our online form.

Posted by & filed under Rental Housing.

Proof of income is often required by experienced landlords; although it may feel like an invasion of privacy, requesting proof of income is an essential step in the application process that can help you decide whether a potential tenant is a good fit for your property. Here’s a look at which documents are considered proof of income, why it’s so important, and how you can verify it. Please note that this is not intended as legal advice, but for information only. Laws may vary depending on your location.

What is Proof of Income?

Proof of income is any document that shows an individual’s earnings; this is generally for a specified period of time (such as earnings for the past year) however the timeframe can vary depending on the type of document used. Proof of income is used to provide proof that a prospective tenant makes the amount of money they claim they make. In the case of credit card companies, it can also be used to figure out whether an individual will be able to pay for large purchases, like a home, a car, or a personal loan. Depending on the situation, the type of documents used to provide proof of income can vary.

Proof of income is an important step in the tenant screening process because it can help you avoid high-risk tenants who won’t be able to pay their rent. In general, it’s best to select tenants who make at least three times the monthly rent rate per month; this ensures that they’re able to pay their rent comfortably, as well as other necessities. However, without proof of income, you have no way of knowing whether a potential tenant makes enough money to cover the monthly rent.

As a landlord, you have the right to request evidence of a rental applicant’s income; you can also legally deny applicants who don’t meet your rent-to-income criteria.

Which Documents Can Be Used for Proof of Income?

Documents that can be used as proof of income include:

  • Pays stubs
  • W2 or 1099 forms
  • Bank statements
  • Federal tax returns
  • Profit and loss statements
  • Employer letters that state the applicant’s job, salary, and date of employment
  • Social security income
  • Other documents, such as court alimony letters or retirement pension statements

You should be able to quickly review these documents to determine whether an applicant is being honest about their income and will be able to afford rent.

Regardless of the type of documentation you require, make sure it includes the following information:

  • The applicant’s full name
  • Identifying information, like their social security number
  • Their income amount for a specified time period
  • The date the document was issued
  • The employer’s name (if applicable)

How to Verify Proof of Income

If the prospective tenant is being honest about their income, they should have no problem providing the requested documents. Let them know that it’s a step in your screening process; you’ll also want to have them sign off on a background and credit check. Once you have their permission to conduct these screenings, you’ll need to verify the information they give you. This is vital because some tenants will lie about their income in order to qualify for a rental property.

There are several ways to verify that the applicant is truly receiving the income they claim. This can be done using any of the following methods:

  • Contact the employer they listed and confirm that they’re still employed
  • Cross-reference bank statements with pay stubs, keeping an eye out for any discrepancies
  • Verify that the documents the applicant submitted are current and real
  • Ask for a letter to verify social security income (if applicable)

Finding out whether a tenant is being honest about their income—as well as knowing how much an applicant makes—is an essential step in the tenant selection process. Without this information, you may have no idea if a tenant can actually afford to pay their rent in full and on time. If a tenant’s income is too low, you may be doing yourself (and them) a disservice by approving them. Being as thorough as possible before choosing a tenant is the best way to protect your business and your property.