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CCPA California Consumer Privacy Act Lock Orange and Gold

Questions over consumer privacy, particularly in regard to credit reporting agencies like Experian, have become a hotly debated topic on a state and federal level. In February, several Senate hearings addressed the need for improved disclosure of the categories of data collected and shared, as well as a need for opt-out processes. As of now, many states are debating changes in how private information is collected and used, meaning there will most likely be significant changes in the future. California is proposing changes to the California Consumer Privacy Act (CCPA), while other states are working to create or expand their own versions of the law. While these are proposed changes at this point, it’s important to understand how the proposed changes may affect laws regarding tenant screening reports in the future. 

Senator Maxine Waters’ introduced two bills that would make significant changes to the Fair Credit Reporting Act: the Protecting Innocent Consumers Affected by a Shutdown Act and the Comprehensive Consumer Credit Reporting Reform Act. These bills, if passed, will greatly impact credit reporting agencies around the country. Waters’ Protecting Innocent Consumers Affected by a Shutdown would create a national database of consumers affected by government shutdowns and prevent credit reporting agencies from reporting any negative financial information that occurs during the shutdown or within 90 days following it.

The second bill, the Comprehensive Consumer Credit Reporting Reform Act, would establish new requirements for consumer agencies who are notified of errors on reports, require those who furnish the consumer information to keep records for accuracy verification and reduce the time negative items are allowed to stay on a report from 7 to 4 years. Bankruptcies history would be reduced from 10 years to 7. This proposed legislation would impact consumer reporting agencies nationally – including tenant screening services.

The consensus to come out of this series of hearings is that it’s of the utmost importance to offer consumers choice and transparency when their information is being furnished to a reporting agency. State legislation like California’s CCPA has been introduced to:

  • Hawaii
  • Illinois
  • Massachusetts
  • Maryland
  • New Hampshire
  • New Jersey
  • New York
  • Rhode Island
  • Texas
  • Washington

Most of the proposed changes revolve around consumer consent and protection.

As legislation moves forward, it’s important to stay up-to-date with local and federal laws to make sure you’re fully compliant when requesting tenant screening services. Always obtain your tenant’s consent to screening in writing in order verify your compliance with the Fair Credit Reporting Act and be transparent on the types of reporting you’ll be using their information for; also, be sure to inform the tenant of their rights to dispute the accuracy of the report. 

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Lease Writing 101

A lease is an essential document that’s often not given the amount of attention it needs. Many landlords rely on sample leases they find online instead of taking the time to write one themselves; while this can save time and online leases can make excellent templates, it’s important to be able to write your own lease and have a complete understanding of every stipulation contained within it. Writing your own lease allows you to customize it specifically to your own rental properties and management needs – as well as offer insights into managing your property. Even if you have excellent communication with your tenants and a good history of verbal agreements with them, an iron-clad lease will protect you and your property should any legal issues arise. 

Lease or Rental Agreement? 

Before you begin writing your lease, it’s vital to understand the difference between a lease and a rental agreement. The terms “lease” and “rental agreement” are often used interchangeably, but they’re actually different types of documents. While both outline the terms and conditions for a renter to occupy a rental property, a lease is a single contract that for a specified period of time – generally six months to a year. Leases can be renewed after the contract period is up, or they can be automatically turned into a rental agreement. A rental agreement differs from a lease in that it covers a shorter period, generally a 30-day period. These are what are known as “month-to-month” agreements. 

Before you begin writing your lease, it’s a good idea to keep the following things in mind:

  • Read some sample leases and clauses online so you can see how things are worded
  • Don’t fill your lease with legal jargon. It’s important for your lease to be written in clear, easy to understand language to avoid the tenant misunderstanding or feeling confused. 
  • Break up your lease into sections with headers and subsections to make it easier to read and understand, as well as to make it easier to find and refer to specific sections
  • Always follow state and local laws on how leases are supposed to be formatted, recorded or written (if applicable). 
  • Start with writing a general lease as a base; then add specifics to each property or tenant as needed. 

Title and Format

Start with first titling and formatting your lease. The title doesn’t need to be anything creative or flashy – “Lease Agreement” will do! It should be large and centered at the top of the page. Then begin by creating your headers. To make it clear and easy to understand, we recommend the following headers as a starting point:

  • Leased Property
  • Term
  • Rent
  • Deposit
  • Utilities
  • Occupancy
  • Tenant Rights and Responsibilities
  • Landlord Rights and Responsibilities
  • Disclosures
  • Lease Termination
  • Governing Law

List Your Provisions

After formatting your lease, it’s time to put some thought into what you’d like the lease to address. Think back to the sample leases you looked at; what types of things did they cover that you felt fit with your property management needs? Make a list of everything you feel an ideal lease would cover, but don’t worry about going into detail – you’ll do that in the next step. Then separate them into categories and list them below each of the headers they would fall under. 

Add Detail to Each Provision

Once you’ve made your list, create clauses by adding detail to each of the provisions. Each clause should provide complete legally binding details for each of the provisions under your headings. We recommend including the following information for each of the headers:

  • Leased Property 
    • Property information – This is where you should include all your property-identifying information to prevent any confusion. It should include the property name, address, zoning, a description of the property and the common areas, and a definition of what areas on the lot are defined as the actual property itself. 
  • Party Information – List the names and contact information of all the tenants for the property. They should clearly be labeled as “tenant”. Then list your name and contact information, labeling yourself as “landlord.” Afterward, you can use the terms tenant and landlord throughout the document in lieu of names.
  • Term
    • Term of the Lease – Clearly state the term of the lease. Generally, they’re between 6 months to a year but they can be anywhere from 3 months to several years. Check your local laws, as some areas may have restrictions on the length of the lease. 
  • Renewal of the Lease – Determine how you’d like the lease to be renewed. You can have your lease automatically renew after the lease period is up or choose to have the tenant give you notice when they want to renew. Add details on how the tenant is supposed to go about renewing the lease and add in the ability to reserve the right to not renew the lease for any reason. Also, include how much notice your tenant will need to give to end or renew the lease; this is generally 30 days, although some local laws may require 60 days’ notice. 
  • Rent 
    • Rent Due Date & Cost – This section should state how much the rent is, what day it’s due, and outline any sort of grace period that the tenant can pay rent late without being subjected to late fees. Also, be sure to include which types of payment you’ll accept. 
  • Late Fees & Penalties – Think about how much you want to charge for late fees, bounced checks, or what types of penalties these things will incur. What types of notices will you send them prior to filing eviction for failure to pay rent? Be sure to check local laws because the minimum length of notice is often legally defined by many states.
  • Deposit – Determine and state how much you’d like to charge for your security deposit to potentially cover any incidental damage the tenant may do to the property while they’re occupying it. Also, be sure to include a clear definition of what is considered damage versus what’s considered everyday wear and tear. Refer to local laws to determine how and where the security deposit money will be held during the length of the lease; be sure to include this information if applicable. Include when the deposit will be returned – again, be sure to check your local laws, as many states have laws about how long you have to asses a property for damage. 
  • Utilities – Who is responsible for paying utilities? Include any details on what is covered versus the tenant’s responsibility, as well as how utilities are divided if they’re shared amongst units.
  • Occupancy – Clearly define who is the tenant, who can be on the property, how long guests can stay, and whether you allow subletting.
  • Tenant Rights & Responsibilities – While tenants have the right to privacy while living at your property, as the landlord you have the right to clearly define which things are not allowed. This could include things such as removing any of the unit’s appliances or putting nails in the walls. Be very specific about what is allowed and what’s prohibited. You also have the option of adding that they can make temporary changes as long as they revert it once they move out. This is the section where you would also define whether you require renter’s insurance. Some basic things to include that are easily overlooked are:
    • Illegal activity on the property is prohibited
    • The tenant is required to follow local health and safety laws
    • The tenant must notify you immediately of any damage or safety issues
    • The tenant must keep the property sanitary
  • Landlord Rights & Responsibilities – As the landlord, you also have a list of rights and responsibilities. While these are defined legally by state and local laws, it’s important to list them in the lease as well so the tenant has a clear understanding. As the landlord, it’s your duty to ensure that the property is in livable condition, which may also require you to make certain repairs as your tenants notify you of issues; list any timeframes that you are responsible for making these repairs by. While landlords have the right to enter and inspect their properties at any time, tenants must be given notice.Check your local laws to determine how much notice you’re required to give, and list that in this section. This will ensure you’re protected from potential privacy lawsuits should you need to enter the property for any reason.  
  • Disclosures – Depending on your location, there may be federal and state laws that require you to give certain disclosures about the property to tenants.This section simply provides written evidence that you provided the required disclosures to the tenant. 
  • Lease Termination
    • Canceling the Lease (Tenant) – Clearly state the exact circumstances a tenant can terminate the lease before the stated term. Include which penalties they will incur if they cancel prior to the stated period without a valid reason and the fees they’ll have to pay.
    • Canceling the Lease (Landlord) – Describe the reasons you as the landlord can terminate the lease early. This is up to your discretion, but it can be things like choosing to sell the property, failure to pay rent, or illegal activity on the property. Be sure to also include information about the process, such as how much notice you’ll give, how long the tenant must reply to the notice, and when you can legally file for eviction.
  • Governing Law – At the end of the lease, include a clause that states the governing law that the lease follows; be sure to include a stipulation that the governing law’s clause will replace anything on the lease that is at odds with the governing law without invalidating the remaining lease agreement. 

Once you’ve written all your clauses, it’s important to check your local laws to ensure your lease is compliant and doesn’t have any inconsistencies. 

Create a Signature Section – This is one of the most important parts of your lease! A lease must be signed to be a legal document. Don’t forget to include an area where you and the tenants will sign and date to acknowledge the agreement to the lease stipulations. 

Addendums – While the above clauses are essentially the foundation of your lease, there are always addendums you may want to add to further define the provisions of the lease. These could include which appliances are included with the rental, how you will handle abandonment (leaving the property without notice), lease termination for military personnel, termination due to sale of the property, pet fees and deposits, an inventory of keys and passwords given to tenants, and how you’ll manage the property during the tenant’s extended absences. 

Congratulations, You’ve Written a Lease!

Hopefully, by following these steps you feel confident about your lease writing skills and now have a lease that is personalized to your specific properties and management style. If you get overwhelmed, just be sure to work through each section gradually and start from general headers to specific details. Bulk up your clauses as you go, referencing local laws as needed. Once you have a good base lease, you can use it as a template for all your properties, making small adjustments as needed. Take your time writing the foundation, and you’ll have a perfect, iron-clad lease ready to go when you need it! 

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Summer Pest Prevention

Summertime brings warm sunny days, barbecues, and… bugs. Not only are insects an annoying pest, but they can also make your tenants uncomfortable, ill, or cause serious damage to your property. When it comes to insect infestations, the best solution is always prevention. We recommend establishing a systematic quarterly pest prevention program will ensure you’re able to stay on top of factors around the property that may attract insects. By identifying the factors that attract insects, you can greatly reduce the chances that they’ll become a problem. 

Remove Problematic Plants

Some types of landscaping plants like flowering shrubs, ivy, ground covers, and fruit trees can bring in multiple types of pests. They may look attractive but replacing them with plants that repel insects (or at least don’t attract them) can significantly reduce bug issues. If you’re set on having some flowering shrubs on the property, plant them on the edges of the property, far away from any buildings. 

Maintenance Matters!

Keeping your property clean and well-maintained will also prevent many insect issues. Cockroaches are highly attracted to wet paper; proving adequate waste disposal will ensure you don’t have any piles of cardboard or other paper products lying around that could become damp. Likewise, removing standing water from puddles or other places it may pool will prevent many types of insects from gathering on the property. All downspouts should direct water away from the property; ask your tenants to alert you to any leaks or areas where the downspout runoff is pooling.  

Weather stripping on screening, whether for doors or windows, will greatly reduce the ability of even the smallest insects from invading your tenants’ homes. They should fit tightly when closed and provide an effective seal. Patching holes, cracks, and crevices that insects may crawl through with a mildew resistant caulking will also prevent them from being able to get into your buildings. Insects are often attracted to light and heat; installing low-heat emitting sodium vapor or halogen lights will greatly reduce the allure to insects. 

Provide Pet Waste Solutions & Stipulations

Many types of insects are also attracted to foul odors; if you allow pets at your property, the addition of pet waste stations and pet waste bags will allow your tenants to quickly remove and dispose of any waste before it has a chance to bring in any pests. Adding a clause to your lease regarding tenant responsibility to keep the premises clean of pet waste is a clear way to convey your expectations to tenants. It’s also beneficial to add a clause stating that tenants must keep their own unit clean and free of any insect attractants, such as wet paper and cardboard, pet waste, or food crumbs. A dirty unit is certainly at risk of becoming a pest magnet. 

Open Communication Aids Pest Prevention & Fosters A Good Relationship

Always encourage your tenants to alert you as soon as possible to any potential insect issues they may spot. Discuss preventive measures with them at the time of rental and add specific clauses to your lease that include cleaning expectations. While the law state that rentals only need to be “habitable,” preventing insect infestations and quickly ridding the property of them when they do occur will make your tenants more comfortable, prevent insect-borne illnesses, and foster a good relationship with them. Your tenants will greatly appreciate the measures you take to prevent pests, and you’ll be protecting both your reputation as a landlord and the structure of your property for years to come. 

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Hard Lessons Learned from Verbal Agreements and a Very Large Dog

Many landlords believe they have all their bases covered with tenants, only to discover something crucial they overlooked – and they often learn about it the hard way. Thankfully, when they share their stories, it allows others to learn from their mistakes! One landlord recently posted the hard lesson they learned revolving around a tenant who had a very large dog… Curious yet? Read on. 

Establishing the Pet Policy

The landlord was approached by a tenant who was wondering if they could keep a large mastiff mix at their apartment. The landlord told the tenant they were sorry, but they had a strict policy when it came to pets. After that, the landlord figured that was the end of it. No means no, right?

One day, the landlord received a panicked voicemail from the same tenant, who said there was a terrible fly infestation in the rental complex. The landlord quickly placed a call to another tenant who lived in the unit above to see if they were having issues with flies too. The upstairs tenant said they hadn’t had any problems with flies… What was going on?

When the landlord arrived at the complex, they discovered that not only had the tenant decided to go ahead and keep the mastiff in the apartment, they had also been throwing the giant dog’s giant poop straight into the garbage cans, which unsurprisingly caused a fly infestation! To make matters worse, the tenant kept their trash cans right outside their open window, allowing hundreds if not thousands of flies to enter the building. 

This landlord unfortunately learned the hard way that it’s absolutely necessary to have every possible stipulation clearly stated on the lease or rental agreement. Don’t assume that a verbal agreement will be treated as an actual binding agreement by a tenant. To ensure your tenant understands the terms of the lease agreement, have them sign or initial each section. It may feel tedious to list each of the terms individually, but it will provide tenants with explicit information about what is or is not allowed on the property. 

The Importance of the Rental Agreement

Clearly stating every condition on the rental agreement isn’t just a matter of saving you from having to deal with potential issues, it’s also a matter of comfort for the sake of all your tenants. In this case, the other tenants weren’t affected by the fly infestation – but they easily could have been. As the landlord, it’s your responsibility to make sure the property is comfortable and livable. The definition of “livable” varies from state-to-state and landlords aren’t generally responsible for vermin that are brought in by a tenant’s uncleanliness. However, had the landlord in this story clearly defined that the garbage cans were to be kept far from the building, it would have prevented the flies from entering through the open window. 

Likewise, defining where tenants’ guests can park, property noise restrictions, and other details that may seem small and nitpicky can greatly increase the comfort of your property for all tenants. Creating an iron-clad lease or rental agreement that will proactively prevent problems takes some time and thought, but in the end, it’s worth it – for both landlords and tenants. 

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When someone owns their home and injure themselves there’s little question about liability, but what if it happens to a tenant? Let’s say one of your tenants is planning a big barbecue and decides they want more lighting outside. As they’re climbing their ladder to hang the lights, they lose their footing and slip off, spraining their ankle. Who’s actually liable for the injury on a rental property? The tenant or the landlord? While it’s always recommended to read lease agreements or check into your local laws, there are a few guidelines that can help you determine liability.

Falling while hanging lights or decorations

In the case of a tenant slipping off a ladder while hanging lights or other types of home decor, the liability usually rests with them. As long as the property itself is maintained, it’s up to the tenant to pay attention to their personal safety. Generally, the only time a landlord is responsible for the injury is when the tenant is injured due to an actual structural issue, like falling through a hole in a poorly maintained deck.

Slipping on the floor

Similar to falling off a ladder, a renter would be liable for their own injury unless they can prove that it was the result of being poorly maintained. In the event of a guest falling and injuring themselves, a tenant’s rental insurance should cover the guest’s injury- another great reason to require tenants to have renter’s insurance.

Falling on the sidewalk

Most leases place day-to-day property maintenance responsibilities on the tenant. Day-to-day maintenance includes keeping outdoor walkways clear by cleaning up leaves, brush, rocks, and other tripping hazards. This also includes snow and ice. As the landlord, you have the option of passing 100% of maintenance responsibility onto the client.

Electrical fires

Electrical fires can start any number of ways, but the most common reason they occur is due to old wiring. As a landlord, it falls within your responsibility to make sure that the property is safe and properly maintained – electrical wiring included. If the fire is started due to negligence on the part of the tenant, then the liability rests with them. The best way to prevent liability for electrical fires is to make sure your rental properties are regularly inspected and maintained by a qualified electrician.

Falling on steps

Similar to other types of slips, trips, and falls, tenants will generally be liable unless they fell due to a maintenance issue. If the stairs have boards or nails sticking up, this also falls under the category of being poorly maintained and you could be liable for injuries that occur.

The bottom line

In most instances, the question of liability comes down to how well-maintained the property is. If there are areas of flooring that are weakened, holes in the deck or roof, old shoddy wiring, or similar issues that really should be fixed, the liability lies with the landlord. If everything on the property is regularly maintained and in great shape, then the liability most likely falls on the tenant. Be sure to check your local laws, and always make sure that liability and maintenance responsibilities for the property are clearly defined in the lease to avoid any potential misunderstandings or legal issues.

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4 Steps for Effective Rental Applications to Find Great TenantsThere are many reasons to use rental applications to screen tenants before signing a lease. They’ll give you a more complete picture of your applicants, notify you of any problematic history, and help you choose renters who can pay regularly and on time. However, in order to get the most out of your tenant screening service, there are a few steps you can follow.

Step 1: Always check for skipped fields.

Tenants who are being straightforward should have no reason to skip a field in their application. Sometimes you might overlook it – if they chose not to select a title, for instance – but generally speaking, you want to have the full information on every tenant you consider. For important details like social security numbers, employer information, or previous residences, skipping that section could be a pretty major red flag. It’s possible that they simply missed a section, so if things look fine otherwise, you might want to verify that they didn’t accidentally forget to leave out information, but if there are questionable gaps and further inquiry results in a refusal to pass on those details, it’s probably best to move on to the next applicant.

Step 2: Make sure applicants sign off on consent.

In order for you to access some of the information you’ll need from your applicants, you’ll want to make sure to include a clause or section for them to sign that indicates in clear language that they’re authorizing the release of specific information. That information can include details from old landlords, bank information, employment verification, and more. This is both to make it clear to them that you’ll be looking into the details on their application and to protect you while you’re doing your due diligence.

Step 3: Verification is essential.

Don’t skip this step! It can be a hassle to get on the phone and call around to verify previous residences and employment, but it’s necessary to ensure you’re not dealing with fudged facts. We know that this step can take a lot of time and you may be tempted to only do so for people you have a gut feeling about, but trust us when we say it’s in your and your business’ best interest to check out every single applicant. A tenant screening service can help make the rental application and verification process a lot easier by running background checks, eviction history, credit history, and more for you so all you have to do is check the reports.

Step 4: Get that background check!

Background checks will fill in the gaps in your information and give you the details you didn’t have before. They are well worth the time and effort and are sure to help you find the right tenants for your properties. We typically recommend that you check the local laws and regulations in your area as to whether or not you can use criminal background in housing selection – some cities, like Seattle, have passed legislation against it.

We recommend our RentalConnect program as an added tool for selection the right tenants for your property. RentalConnect offers property owners and landlords a great alternative to the expense of full tenant screening. This service requires no on-site visit, sign-up, or membership fees, making it extra convenient, especially for those with less experience in property management. The $34.95 service fee is paid by the applicant. Available 24/7, RentalConnect is fast, easy, secure, and delivers reports needed to make an informed decision, including a credit report, a national criminal search, and a national eviction search.

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Find a Property Management Company That Works Well with LandlordsAs you grow your business and become the landlord of multiple properties, you may feel it’s time to start seriously looking into a property management company that can help you maintain and find tenants for your properties. When you work with competent professionals who have experience maintaining various types of properties, you’ll find that your workload is lessened and your profits maximized. However, if you end up with a dud or someone who lacks experience, it can cause far more headaches than it’s worth.

Find the Right One for You

This is why you should do proper research and follow a few choice steps to ensure you’re working with a property management company that will do right by you. We have a few general tips for you:

  • Ask people you trust for referrals. Always a good bet!
  • Consider local companies familiar with your area.
  • Do your due diligence and read up on the company’s reputation.
  • Conduct interviews to see who you click with and get professional vibes from.

Stick with these tips and you’ll be well on your way to finding a qualified manager you can trust. Referrals are likely your top source for reputable management companies, especially if the people you ask are also landlords with experience working with multiple properties. You should keep their recommendations at the forefront of your mind, but don’t be afraid to ask additional questions. You may want to consider what types of properties they own and whether you have comparable properties.

Your next step is to cross-check your referrals with local companies who work with buildings in the area. These companies will know your local market best and likely have contacts already when it comes to knowing the best way to fill your properties with reliable tenants. They’ll know how to market, who to market to, and how to ensure your units stay filled if at all possible. Property management professionals will also know your local competition and account for them so you see the benefits.

Do the Research

Before signing with a company and trusting them with your property management, you’ll want to do some additional research on your own. You can often rely on personal referrals, but even so, it’s a good idea to do some extra work on your own to check online reviews or professional site details to get a more well-rounded picture of who you’ll be working with. Speak directly with the people who will be managing your property along with their superiors so you can get a personal feel for their personality, work style, and more. They should be friendly and professional, as well as give you the sense that you’ll be in good hands.

When you do find property managers you can trust, you can support them with a tenant screening service that will help match your units with the best possible tenants. We recommend our RentalConnect program as an added tool for selection the right tenants for your property. RentalConnect offers property owners and landlords a great alternative to the expense of full tenant screening. This service requires no on-site visit, sign-up, or membership fees, making it extra convenient, especially for those with less experience in property management. The $34.95 service fee is paid by the applicant. Available 24/7, RentalConnect is fast, easy, secure, and delivers reports needed to make an informed decision, including a credit report, a national criminal search, and a national eviction search.

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You just met with a really nice prospective tenant. They see like they have their act together, they were friendly, and they answered every question well. You’re feeling pretty good about them. Should you trust your gut and extend them a rental agreement? Well, while trusting your gut can be a good thing in many situations, when it comes to your business and livelihood, it’s best to be absolutely sure. Using a tenant verification service will give you all the answers you need and help prevent fraud.

As a landlord, your properties and ability to fill those properties with qualified, paying tenants is essential for your success. Anyone who’s been in the rental business long enough knows this is easier said than done, however. Even if everything looks good on paper and in person, there may be something hidden in an applicant’s past that will give you pause. At the very least, it’s worth looking into and seriously considering.

More Comprehensive Than Credit Reports

Tenant verification screening can take many forms, but most landlords and property managers rely on credit reports first and foremost in their decision making. While a credit report can give you a lot of information – credit score, current debt, payment habits, declaration of bankruptcy, and more – there are some things it can’t tell you. A more comprehensive tenant screening can include a background check, criminal history, eviction history, and even out-of-state information for someone who’s moved in from outside the state. All of this information can combine to paint a different picture than the person you met.

Important things to keep an eye out for in your application and tenant verification reports:

  • Employment verification
  • False pay stubs
  • Previous residences and relationships with landlords
  • Criminal background
  • Eviction history
  • A slight variation in the name that doesn’t match the social security number given
  • Anything else that doesn’t quite match what’s on the application

Any or all of these things could be warning signs and are worth a deeper look. It’s vital to protect your business and property from fraud and income loss, and doing your due diligence is always well worth it. Best of all, screening services like those from TSCI are paid by the tenant as part of their application fee, making the screening virtually cost-free for you.

We recommend our RentalConnect program as an added tool for selection the right tenants for your property. RentalConnect offers property owners and landlords a great alternative to the expense of full tenant screening. This service requires no on-site visit, sign-up, or membership fees, making it extra convenient, especially for those with less experience in property management. The $34.95 service fee is paid by the applicant. Available 24/7, RentalConnect is fast, easy, secure, and delivers reports needed to make an informed decision, including a credit report, a national criminal search, and a national eviction search.

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Landlord Responsibility for Tenant Utility BillsIt’s not uncommon for landlords to have to deal with nonpaying tenants at one point or another, but another thing that some may not consider is having a tenant who pays rent but skips out on utility payments, either for their final month in the property or for even longer. When utility bills have been going unpaid, who’s responsible? Do you have to cover for tenants who bailed, or do you have some recourse?

First things first: always go back to the rental agreement.

If you have a comprehensive rental or lease agreement, then you should have a section that details who’s responsible for which utilities. In some instances, the tenant is responsible for all utilities, while in others the utilities may be split between the landlord and the tenant. For example, in an apartment complex, the property owner or landlord may cover trash pickup and water, while the tenant is responsible for gas, electricity, and other bills. This varies by type of property, as well as local laws. Always confer with your legal counsel about what you have to cover, legally.

Once you know what you’re responsible for and what the tenant should cover, you can move forward. Even if you’re pretty sure you know, check your agreement anyway just to be sure. This should indicate to you whether utilities are registered under your name or the tenant’s name. If the unpaid utilities are under the tenant’s name, then you should not legally be responsible for repaying their late payments or fees. However, if the utilities remain under your name for any reason, you’re likely on the hook to pay. If this were the case, you probably would have noticed missed payments before the tenant’s move-out date, but it’s possible something was overlooked.

What do you do if a tenant leaves you holding a very expensive bag of missed utility bills that you’re now responsible for? You may want to strongly consider taking them to small claims court to get back some of your lost revenue. It’s up to you to weigh your options and decide if the amount lost is worth the additional hassle and time commitment. On the other hand, if the tenant skipped out on bills that are still under their name, then the utility company will have to take legal action themselves to get their money – they can’t force you to pay if you’re not legally obligated.

It’s always possible to end up with a less-than-stellar tenant, but if you use a screening service during the application process, it can significantly reduce your risk of dealing with a nonpaying tenant. We recommend our RentalConnect program as an added tool for selection the right tenants for your property. RentalConnect offers property owners and landlords a great alternative to the expense of full tenant screening. This service requires no on-site visit, sign-up, or membership fees, making it extra convenient, especially for those with less experience in property management. The $34.95 service fee is paid by the applicant. Available 24/7, RentalConnect is fast, easy, secure, and delivers reports needed to make an informed decision, including a credit report, a national criminal search, and a national eviction search.

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How Tenant Verification Protects Your Business

Why is tenant verification so important?

Because it helps you determine not only the best tenant for your given property but also gives you the information you need to make a good business choice as a landlord. Any tenant can walk into a showing and put their best foot forward, making you feel at ease, but it’s really only through a thorough screening that you can be sure of exactly what you’re getting. Many tenants know how to play the game to make themselves appear more desirable than they actually are, and some may even lie about income or employment in the hope that you’ll rent to them without verification. Don’t fall into that trap!

Whether you decide to screen your own tenants or use a property management company, you should make sure that you’re really looking behind the curtain to see what’s going on with each applicant. Tenant verification screening is going to benefit you either way, and better yet, with the right program it’s available at minimal or no cost to you because the application and screening fee is paid by the tenant. As always, it’s important to check your local laws to see which screenings you can use and determine that maximum you can charge for an application fee.

Here’s what a screening can tell you

  • Determine that the information on an application is accurate. Everything from previous addresses to employment history can be cross-checked via a screening.
  • Check credit history. Getting a credit score for a potential tenant is only one piece of the puzzle. You can also get a bird’s eye view of how a potential tenant has dealt with financial highs and lows in the past so you have a better idea of how they’ll do so while living in your property.
  • A background check can prevent messy incidents. If you live in an area where you’re allowed to run background checks on rental applicants, this tenant verification will help you see whether someone has a history of violent crime, drug convictions, domestic disturbance, or anything else that would cause you and your other neighboring tenants grief.
  • Eviction history. Knowing whether a tenant has been previously evicted can tell you a lot. It’s not always a sign that you shouldn’t rent – sometimes landlords are in the wrong or it truly is out of the tenant’s control! But it will give you a better idea of their rental history and is important to note.
  • Learn more from previous landlords. Still not sure about a certain applicant? Contact their previous landlord to get a more well-rounded picture.
  • Speak with the tenant directly and verify everything they tell you. Some people can be very personable and friendly, but no matter what, you’ll always want to double-check that everything they told you during an interview is accurate. Cover all your bases!

At the end of the day, screening is the best way to protect your livelihood. We recommend our RentalConnect program as an added tool for selecting the right tenants for your property. RentalConnect offers property owners and landlords a great alternative to the expense of full tenant screening. This service requires no on-site visit, sign-up, or membership fees, making it extra convenient, especially for those with less experience in property management. The $34.95 service fee is paid by the applicant. Available 24/7, RentalConnect is fast, easy, secure, and delivers reports needed to make an informed decision, including a credit report, a national criminal search, and a national eviction search.