Posted by & filed under Property Management.

House key with home keyring in keyhole on wood door, copy space

In most cases, the residents who live the properties you manage will be paying tenants. They were selected to live there, have signed a lease or rental agreement, and pay their monthly rent. In rare cases, however, you may encounter squatters. These are individuals or groups of people who haven’t signed a legal contract allowing them to take up residence at the property. This can be a frustrating and sometimes complicated situation for property owners and managers alike.

So how should you handle the situation? Here’s a brief overview of what property managers should know about squatter’s rights and how to prevent them from taking up residence at one of your vacant properties. Please note this is for informational purposes only and is not intended as legal advice.

What You Should Know About Squatter’s Rights

Even though squatters haven’t signed a contract or paid to live at the property, some laws require property managers to go through the eviction process to get the unauthorized tenants to move. They must be treated just like any renter who’s fallen behind on rent: the eviction notices must be delivered through the local police department or by mail. You’re not allowed to just kick them out.

Nearly every state has laws pertaining to squatter’s rights. California, for example, allows squatters to lay claim to a building or unit after establishing residency. Establishing residency isn’t difficult to do; they need to come and go through the front door, have their mail and bills sent to the address, and pay property taxes for at least five years.

However, if the squatter doesn’t pay property taxes, or the property manager or owner catches them living at the property without consent, the squatter can be arrested for trespassing and evicted.

Prevent Squatters by Keeping an Eye on Vacant Properties

Most property managers will have vacancies from time to time, so it’s important to visit these properties frequently to ensure no one has taken up unauthorized residence. The easiest way to do this may be hiring a full-time security guard. If this isn’t an option, make sure to stop by to perform routine maintenance and safety checks. It’s common for squatters to keep watch on vacant buildings to make sure no one is coming and going before they move in, so frequent comings and goings are a good way to deter them.

It’s also important to know that in most states, you’re not allowed to add padlocks, barricades, or other types of physical deterrents to keep squatters out. This also includes shutting off utilities. Intimidation isn’t an option, either. The best thing to do when you discover a squatter is to contact your local law enforcement agency and ask for assistance. If you come across a squatter at one of your properties, don’t wait to get law enforcement involved. The longer the squatter lives there, the more likely the court will believe they were living at the property with consent.

If law enforcement decides the situation is a civil matter, you’ll need to move onto the eviction process. The first step you should take is to provide notice to the squatter. The squatter may decide to vacate on their own, but if they don’t, you’ll need to pursue an unlawful detainer lawsuit to help with the eviction. It’s also recommended that you research your local laws surrounding squatters so you know how to handle removing them legally and don’t run into legal issues. If in doubt, consult legal counsel to determine your best course of action. Click here for more information on squatter’s rights.

Posted by & filed under Tenant Screening.

Tenant relationships can be difficult to navigate at times, especially when it comes to the end of a lease. Although you may be ready to renew the lease, your tenant may have other ideas. Keep an eye out for these warning signs your tenant may not be planning to renew their lease so you can start preparing to fill the upcoming vacancy:

Late Rent Payments

lease renewal icon, black vector sign with editable strokes, concept symbol illustration

Has your tenant gone from consistently paying rent on time to being habitually late as the lease renewal gets closer? Recent recurring late payments can be one of the easiest ways to tell your tenant has no intention of renewing the lease.

It’s important to keep in mind that with the pandemic, even the most reliable of tenants can fall on hard times. You may want to consider discussing the reasons behind the late payments with your tenant or find ways to encourage timely payments, like offering the ability to pay their rent online. If late payments are also accompanied by some of the other warning signs, however, it’s likely they’re not planning to renew their lease.

Shorter Lease Requests

If the tenant requested a shorter lease, such as a month-to-month or a six-month lease, this could be a sign that the tenant views your property as a temporary housing situation. This is most likely to occur at the initial lease signing, but it could also happen at lease renewal. A request for a shorter lease doesn’t necessarily mean they’re not a good choice as a tenant, but it could be a red flag if you’re searching for a long-term resident. Depending on how much the vacancy is costing you (or could cost you in the future), you may want to consider a shorter lease and increase the monthly rent to offset expenses.

Lease Renewal Cancellation Questions

One of the most telling signs your tenant isn’t planning to renew the lease is if they start asking questions about canceling the lease renewal. Many leasing agreements include automatic renewal clauses requiring tenants to give notice if they plan to terminate the contract once the initial lease is up. If your tenant asks when the cancellation date is, it’s a fairly sure sign that they’re not planning to renew the lease – or that they’re at least considering their options. Another sign your tenant is shopping around for other places to rent would be if you receive inquiries about your resident’s rental history from other landlords or property management companies.

Other Indications Your Tenant Won’t Renew

Along with some of the more obvious signs your tenant isn’t planning to renew, there could be some subtle indicators that they’re going to move, such as

  • Avoiding discussions surrounding lease renewal
  • Closed or uncomfortable body language when discussing the subject
  • Constant requests to negotiate expenses, like the cost of rent or utilities
  • Numerous complaints about the property or requests for updates to the property
  • Communication breakdowns or inability to reach the tenant when they’ve previously been very communicative or responsive
  • Lease violations
  • A change in relations, such as the tenant suddenly becoming rude or disrespectful
  • The tenant’s maintenance responsibilities (such as maintaining the yard) are being neglected
  • Unauthorized residents or pets at the property
  • Consistent disputes with the neighbors

Although it’s often in everyone’s best interest to renew a lease, it’s also important to watch for the signs that the tenant could be planning to move on. By staying vigilant in the time leading up to the lease renewal period and keeping communication open, you’ll be less likely to get caught off guard if your tenant plans on moving – and you can start preparing to find new occupants.

Posted by & filed under Tenant Screening.

How to Choose the Best Tenant Screening Services

Tenant screening services provide numerous benefits for landlords and property managers. They’re convenient, efficient, and allow you to focus on other aspects of your business. However, not all screening services are alike. Many of them vary in terms of the types of reports and support they offer. So, what should you look for? How do you know which screening service is best?

Here’s a list of things you should look for:

A Full Product list

If one of your goals is to save time, you’ll want to avoid screening companies that only offer one or two types of reports. Make sure to choose a vendor that offers all the reports you need; this not only saves time but also makes it easier for documentation purposes. Click here to see a complete list of TSCI’s tenant screening services, including tenant verifications, credit checks, and background checks.

Credit Score and Credit Reports

Credit scores and reports are essential for determining if a potential tenant will pay their rent on time. However, some tenant screening services may offer limited credit reports or just a score. While this is better than nothing, it doesn’t give you the complete picture. A full credit report should include:

  • The applicant’s personal information (social security number, name, and address)
  • Credit accounts, limit, and score
  • Loans, balances, and payment history
  • Public records, such as bankruptcies or collections

Criminal Background Checks

Some tenant screening services may only run a state-specific background check, which means the applicant could have criminal records in a different state, and you wouldn’t know about it. It’s always best to choose a company that offers screening through a nationwide criminal record database.

Eviction History

Does the company provide an eviction history report, and if so, does it show court actions related to an eviction? Is the eviction history state-specific or from a nationwide database?

Pricing

Another thing for you to consider is pricing. How much does the service cost overall, and how are the products priced? Does the company offer bundles or a la carte options? While both have their advantages, it’s best to work with a company that offers both options, so you have flexibility. Bundles are cost-effective and convenient, and they might be the best choice for the majority of your screenings, but what if you want to add on an additional service?

Another thing to look for is a clear pricing structure. Avoid companies that don’t have their prices listed on the website or aren’t responsive in answering questions about pricing. Professional tenant screening companies will have their prices clearly listed on the website.

Who Pays for the Screening?

Tenant screening services can add up, especially if you’re screening a large number of applicants, so it’s important to know who will be responsible for the cost. Does the company offer an option to defer the cost to the tenant? If you’re responsible for the fees, are they low-cost and reasonable for the service and reports you’re receiving?

Turnaround Time

How long does the whole process take, from ordering the reports to being able to view them? The turnaround time should be reasonable for the amount of information you’re receiving. Stay away from instant screening reports that are available as soon as you pay; these are often pulled from automated databases and may not contain the level of detail you need – and even worse, they may have outdated or incorrect information.

Online Forms

Does the company provide free online forms, like rental applications the applicant can fill out?

A Secure, Easy-to-Use Online Platform

Ordering your reports should be easy and secure for you and the applicant. The more difficult a platform is to navigate, the less likely you (or an applicant) will want to use it! It’s important to find a tenant screening company that has an online ordering process that can be accessed from any computer with an internet connection. The platform should also provide clear information on the types of reports offered.

Accessible Customer Support

Nothing is more frustrating than needing an answer to a question and not being able to reach a live person! Avoid this issue by choosing a company that offers live customer support. Look for a screening service that has its support line clearly listed, like TSCI. You can contact us directly Monday through Friday from 9 am to 5 pm PST at 1-800-523-2381 or reach us through our contact page.

Skip the Search and Choose TSCI

If you’d like to save time and resources on your tenant screening, you’ll find TSCI meets all of the above criteria. We provide comprehensive tenant screening and tenant verifications for landlords and property managers throughout the U.S. Our products are available online, 24/7, making it easy for you to order screenings whenever it’s most convenient for you. In addition to our traditional screenings, we also offer RentalConnect. Rental Connect offers an excellent alternative to the expense of full tenant screening. This service requires no on-site visits, sign-ups, or membership fees, and the cost of the screening is deferred to the applicant.

TSCI stays up-to-date and fully compliant with TransUnion, Experian, The Fair Credit Reporting Act (FRCA), The Investigative Consumer Reporting Agencies Act (ICRAA), and the Nevada Private Investigators Licensing Board, so you can feel confident that the reports you receive won’t violate federal or state screening laws. We also maintain membership with the Professional Background Screening Association and have been accredited with The Better Business Bureau since 2014. For more information, visit our services page, or feel free to reach out to us with any questions you might have.

Posted by & filed under Credit Score.

If you’re tired of being inundated with commercials for large ticket items talking about how these are “unprecedented times” we’re living through, you’re not alone. Although the availability of vaccines has given us all some light at the end of the pandemic tunnel, we’re certainly not out of the woods in many ways, especially economically. Anyone who’s been paying attention to the state of affairs knows this isn’t a good time to purchase a new car, travel abroad, or go on a cruise. A recession is likely on the way (if it’s not here already).

This is a fact that’s not lost on many in the rental housing industry, especially as unemployment rates hit record highs this year. People are struggling around the nation, and the industry has essentially come to a halt. Many residents aren’t able to pay their rent – and in many cases, landlords and property managers still aren’t able to evict for unpaid rent. States that have reopened their eviction courts are facing a backlog, extending the burden on property owners. While the latest relief package offers minor respite for landlords, it’s not enough. Some property owners still aren’t able to pay their bills, while others have properties that are just getting by, but in desperate need of income.

With this in mind, there are still plenty of renters who are searching for their next home, but you should consider that the next vacancy you fill may look very different from one pre-2020. There’s a high likelihood that the next applicants you screen may not meet your typical rental criteria. Strapped for cash with less economic opportunity, you may find that a large portion of your applicants have lower credit scores than what you previously would have seen as acceptable.

Anticipate Lower Scores and Make Some Adjustments

While it’s reasonable to want tenants with good credit, it’s also important to look at the situation from all angles. Credit scores are important because they allow you to make an informed decision on which applicants present the lowest financial risk. However, every month your vacancy goes unrented costs you money.

The fact is, 2020 is really an outlier, and it may be beneficial to see your future tenant screenings through this lens. Nothing was normal about last year, so it’s likely this will be reflected in some of the applicant’s information. You may find some of the applicants have a history of steady work up until 2020, or that they had no history of evictions up until last year. In these cases, it’s best to consider making some allowances.

Here are a few ways you can adjust your rental policies or criteria to accommodate some of the special circumstances your applicants may have encountered in 2020:

  • Modify your credit score requirements
    One simple way to make an allowance for lower applicant credit scores is to lower the number you deem to be an acceptable credit score. However, if you decide to do this, it’s best to stay on top of the current news regarding employment rates and credit scoring analysis from credit bureaus to make sure you’re in line with any changes in the economy. Keep in mind that if you decide to go this route, you’ll also want to pair your credit checks with other methods, such as tenant verification, or a background check to give you a better idea of the applicant’s rental and employment history.
  • Month-to-month leases
    If none of your applicants have a credit score that matches your rental criteria, you may want to consider offering a month-to-month lease. Although this can come with its own problems, month-to-month leasing may be a good solution, at least in the short term. A month-to-month will minimize your risk if you’re not convinced the applicant will be able to consistently pay their rent; you’ll quickly get a feel for what you can expect and can make a decision on whether or not to renew the lease. If the tenancy doesn’t work out, you’ll at least have some income coming in for a while.
  • Increase your security deposits
    Another option you have is to increase your security deposits – although, make sure to consult with a lawyer to make sure it’s legal in your area. Having a larger deposit may give you some peace of mind in place of an ideal credit score.
  • Require a co-signer
    Requiring a co-signer is common for young renters who have little to no credit history, so it could be a good option for applicants who have struggled over the past year as well. If the applicant’s score is too low, ask them if they’d be willing to have someone with a higher score agree to cover a defaulted rent payment. If you have employees, make sure to discuss this with them as well, so they understand how to vet applicants and how to answer applicant’s questions regarding the rental criteria.

By taking certain precautions and making adjustments to your operations, you can ensure that your rental properties stay occupied – and protected.

Posted by & filed under Tenant Screening.

Close-up Of A Human Hand Filling Lease Agreement Form With Pen

When a tenant’s lease is coming to an end, you’ll have to make a decision: whether to renew the lease or part ways. If the tenant has been reliable, responsible, and a good resident overall, the easiest choice is to renew the lease. Finding a new tenant can be stressful, even with screening services. It can be time-consuming to market the property, sort through applications, and show the unit. And the longer it takes to find a new tenant, the more expensive the process becomes.

Here’s a look at why renewing a lease is beneficial, and some tips on how to go about doing it. Please note that this is for informational purposes only and is not intended as legal advice.

Why Should I Renew a Lease?

First, what does it mean to renew a lease? Renewing the lease typically means signing your existing tenant to a new lease, with terms that are the same or similar to their current lease. This can also include an extension of their current lease, which keeps the same terms and extends out the end date.

Here are a few benefits of renewing a lease:

  1. Eliminates the cost of finding a new tenant

There can be many costs associated with finding a new tenant. These include:

  • Advertising
  • Cleaning or repair costs after the tenant has moved out
  • Maintenance (like replacing old carpet, fixtures, or appliances)
  • HOA dues (if applicable)
  1. Reduces the risk of vacancy

If you don’t already have a tenant lined up to move in when the current tenant moves out, you risk losing income from the vacant property. Not only do you lose out on rental income, but you’ll also have to continue to pay for utilities or other expenses associated with the property.

  1. Minimize stress

Searching for a new tenant can be stressful so once you find a good tenant, it’s best to keep them. There’s certainty with your current tenants – you know what to expect and already have an established relationship. Even though tenant screening and verification give you an excellent idea of a tenant’s responsibility level and rental history, it doesn’t necessarily tell you what an applicant would be like on a personal level. If your current tenant is paying their rent on time and does a good job of keeping up the property, it’s worthwhile to renew the lease.

  1. Save time overall

When a tenant moves out, there’s often quite a bit of work involved to get the property ready for the next tenant. This includes cleaning, maintenance, preparing a listing, looking over applications, interviews, showing the property, deciding who to screen, and making a final decision. Retaining good tenants eliminates these steps and frees up time for you to focus on other aspects of your business.

Tenant Retention

Something to consider: A Zillow trend report from 2018 found that nearly half of all renters (46%) who had moved within the past 12 months had plans to move again within the next year. So how can you ensure that you keep good, reliable tenants? Here are a few things that can help:

  • Make them feel welcome at the property
  • Help them feel connected with the neighborhood by giving pointers on things to do, where to shop or eat, etc.
  • Be available and easy to contact
  • Respond to questions, concerns, or requests quickly
  • Provide ample notice for changes or problems that could affect them
  • Allow some personalization of the unit or property
  • Be considerate of their privacy and rental needs
  • Keep up on maintenance
  • Keep features of the property updated
  • Enforce rules fairly and consistently
  • Foster a personal (but still professional) relationship

Click here for more tips on how to get a good tenant to renew their lease.

Do I Have to Renew a Lease?

Whether or not you’ll have to renew a lease depends on your local laws; some areas have laws that restrict or limit a landlord’s ability to not renew a lease. However, in most cases, landlords do not have to renew a lease. Likewise, a tenant can also choose not to sign a lease renewal. If you’re unsure what the local laws are surrounding lease renewals, it’s best to consult with legal counsel to ensure you’re doing everything by the book.

Depending on where your property is located, landlords generally have 30 days prior to the end of the lease to notify a tenant if the lease won’t be renewed. This can be done through a written notice of termination or a non-renewal of lease letter, which confirms the end date of the lease and move-out instructions.

Some areas don’t require you to include a reason for terminating the lease once it ends, however, you may be prohibited from ending a lease in retaliation or if it’s discriminatory towards a protected class under fair housing laws. Some reasons to consider not renewing the lease include:1

  • Unreliability, such as consistent late rent payments
  • Damage to the property beyond normal wear and tear
  • Lease violations
  • Frequent complaints from neighbors or other tenants
  • You’re selling the property or have hired a property management company

How Do I Renew a Lease?

If you’ve decided you’d like to renew a current tenant’s lease, it’s recommended to send them a renewal letter to let them know you’d like to continue renting to them. Make sure to include whether the terms of the new lease will be the same or if you plan on making adjustments. The renewal letter (also called a lease renewal agreement) serves two purposes: it informs your tenant that the lease will be ending soon and it also allows you to gauge their level of interest in continuing to rent your property.

The laws surrounding lease renewal letters vary from location to location, but typically they should be sent to the tenant at least 90 days before the lease expires. This will give your tenant plenty of time to make a decision and find new housing if they don’t plan to renew.

How Do I Write a Lease Renewal Letter?

Here’s an overview of what you should include while writing your lease renewal letter:

  • Your name and contact information
  • The name and contact information for your tenant
  • The address of the rental property and unit number (if applicable)
  • A reference to the original lease (or better yet, a copy of it)
  • Your renewal terms or any changes to the original terms of the lease
  • The new rent amount (if applicable)
  • The proposed end date of the lease

Once you’ve written up the lease renewal letter, make sure to attach a copy of it to the original lease as documentation.

Negotiating Lease Renewal Terms

In some cases, your tenant may want to negotiate the lease renewal terms. Whether you want to negotiate is completely up to you. If you’d like to keep the tenant at your property though, it’s generally best to listen to their terms and consider working with them to create a new agreement. Some of the most common things changed in a lease renewal include:

  • The price of monthly rent
  • The cost of the security deposit
  • How payments can be made
  • The duration of the lease
  • Policies or rules for the property
  • Renter’s insurance requirements

Month-to-Month Leases

If your tenant wants to sign a month-to-month lease, it’s important to agree to the terms or terminate the lease before it expires. In some states, a lease may automatically carry over to a month-to-month lease unless it’s terminated. Month-to-month leases generally renew automatically each month unless the landlord or the tenant notifies the other party that they want to terminate the lease. In some areas, the tenant or the landlord is required to provide a 30-day written notice if they’re planning to terminate it; other areas require a 90-day notice. Be sure to read up on your local laws and consult with an attorney if you have any questions.

The Tenant Doesn’t Want to Renew

If the tenant doesn’t want to renew, they will typically be required to notify you in writing. However, there are some circumstances where they may not be required to provide notice. This includes situations like military deployment or being the victim of domestic abuse. If the tenant doesn’t want to renew, make sure to send them written confirmation of the lease end date and move-out instructions.

The Tenant Stays After the Lease Expires

Although it’s unlikely, what should you do if the tenant stays at the property after the lease has expired? You have a couple of options. If they continue to pay rent and you accept the money, this may be legally seen as a renewal of the lease in some locations. If they continue to live at the property without paying rent or otherwise violates the terms of the lease, you have the option to evict them. Regardless of what the situation is, you should always consult with an attorney to determine your legal rights and the best course of action.

Posted by & filed under Property Management.

Whether you’ve been screening tenants yourself or are searching for a new screening partner, Tenant Screening Center enables you to do the best work for your clients without interfering in your operations.

We bring you the best of both worlds: the personalized, responsive service of a smaller company, paired with credit scores and history from worldwide leaders in credit reporting.

Our traditional screening services and tenant verification allow you to have accurate reports tailored to your rental criteria. You’re in total control, without being at the mercy of technology or intrusion from a third party. Pay only for the reports you need.

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Other benefits of our tenant screening and verification services include:

  • Accessibility for multiple team members and agents
  • Fast turnaround times
  • Convenient integration with many types of property management software
  • Direct 24/7 access to request and view your selected reports
  • Live customer support

TSCI allows busy property management companies to do business the way they always have, without being boxed in or forced to conform to another company’s standards.

Find the freedom you need to do the best work for your clients while minimizing your task list and enjoying tailored service, timeliness, and efficiency.

For more information, visit us today at TSCI.com or contact us at 1-800-523-2381 Monday – Friday from 9 am to 5 pm PST.

Posted by & filed under Tenant Screening.

It can be a challenge to find the right tenant for your rental property – especially if you feel financial pressure to fill the vacancy quickly. Fortunately, tenant screenings can help you quickly eliminate tenants who aren’t a good fit and narrow down potential tenants who have a history of being reliable and responsible. In addition to the standard background and credit checks, it’s also a good idea to perform a tenant verification, which includes references from the applicant’s former landlords. A former landlord can fill you in on information that goes beyond the data-driven reports, giving you better insight into what you could expect if the applicant were to become a tenant.

However, it’s important to realize that fraud can occur when applicants supply references. It’s not unheard of for an applicant to ask a friend to fabricate a reference or documents to give them better chances at landing the rental. Maybe the renter severely damaged the unit, or they had other issues they’re trying to hide. According to one report conducted by a tenant fraud detection agency, 22% of applicants submitted fraudulent documents during the application process – this increased by 11% during the beginning of the COVID-19 outbreak between March and April last year.

So how can you tell if the information the applicant provided you is false? Here are a few tips to help you decide.

Look into the landlord’s past activity

Conceptual triangular hazard road sign against a stormy sky saying fraud alert

If you’ve talked to the reference on the phone but aren’t sure you believe they’re actually a landlord, try doing an online search for the property owner and the property itself. If the reference is a real landlord, you should be able to find some ads or posts for the rental that prove it’s a legitimate property. If there’s a dedicated website for the rental, check the Wayback Machine to see how long the website has been around. Unfortunately, there are online services that sell websites for fake references; it’s a good idea to check when the website was established.

Social media sleuthing

Social media can also be a good place to do a little sleuthing. Do a search on the reference’s name and see if they have any connections to the applicant. Are they tagged in each other’s posts or photos? This could be an indicator that they’re friends or family members. Do you notice any overlap between the applicant’s profile and the landlord’s profile? Although some landlords have a friendly management style, profile overlap is an indication that this is a personal relationship, rather than one of a landlord and tenant. Keep in mind that some landlords may not have a social media profile or talk about their business on social media.

Familial Interviews

When you’re chatting with the landlord or leasing team, make sure to pay attention to their tone. Do they sound nervous or uncomfortable? Are they able to answer your questions easily? If they seem nervous, it may not be that they’re a fake reference; some people aren’t comfortable talking on the phone, but it’s still something you should take into consideration.

Another thing to pay attention to is their comments. A real landlord will focus on useful rental information. They’ll know if the tenant ever paid their rent late, how much wear and tear occurred at the property, if there were any major damages or repairs, and if there were noise or other types of complaints from neighbors. These are all things that a friend or family member isn’t likely to know. If they provide general statements like, “they were an excellent tenant” without any details, this is a red flag. Likewise, if the person seems anxious to get off the phone, this could also be a sign of a false reference.

Check the ownership records

Most property tax records are public, so as long as you have the applicant’s previous address, you should be able to look up the owner by doing an online search. If the owner listed doesn’t match the name you were given, that could be a red flag.

Let TSCI Save You Time

Although there’s no completely fool-proof method to weed out fraudulent rental references, you can get peace of mind and save time by letting TSCI handle your tenant verifications for you. With over 35 years in the tenant screening industry, we have extensive experience determining the reliability of references. Our tenant verification services are low-cost and a great first step before moving onto credit or background checks. Our tenant verification service includes 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)

You’ll receive a form completed with the above details, giving you the information you need to make the most informed decision possible. For more information on this or our other screenings, contact TSCI today at (800) 523-2381 or purchase your tenant screening reports online.

Posted by & filed under Property Management.

On January 29, 2021, the California state legislature signed new legislation into law that extends the current COVID-19 Tenant Relief Act. The bill (SB 91) included several provisions that can be read in its entirety here. Please note that this is for informational purposes only and is not intended as legal advice or as a complete overview of SB 91.

Calculator with wooden house and coins stack and pen on wood table. Property investment and house mortgage financial concept

One of the most noteworthy provisions for the rental housing industry prohibits rental housing providers, tenant screening companies, or other entities from using COVID-19 rental debt as a factor when evaluating an applicant for tenancy. Likewise, COVID-19 rental debt cannot be a reason to deny an applicant that would otherwise qualify as a prospective tenant.

What Qualifies as COVID-19 Rental Debt?

The bill defines “COVID-19 rental debt” as any unpaid rent or other financial obligations the tenant has accrued during the ‘Covered Period,” which is between March 1, 2020, and June 30, 2021.

How Will SB 91 Affect Tenant Screening?

In response to the bill, TransUnion has made changes to the data provided in screening reports:

  • Eviction records that occurred in California during the covered period will not be included in the evictions report.
  • COVID-19 rental debt that occurred during the covered period will not be included in ResidentScore or VantageScore credit scores or reports.
  • No changes will be made to TransUnion’s batch credit reports.

To develop a strategy that will best fit your operations, we recommend discussing the new provisions with your legal counsel.

Posted by & filed under Rental Housing.

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Rental housing laws regarding tenant screening, applications, and rental housing decisions are constantly evolving. Although it can be time-consuming and difficult to keep up, it’s important to make sure your written rental criteria adapt to the latest regulations. Updating your rental criteria annually is the best way to ensure you’re following all the guidelines – while avoiding actions that could cause legal issues. Here are some key factors to keep in mind to ensure your rental standards stay up to date and in line with the latest laws; please note this is intended for informational purposes only and is not intended as legal advice.

What are Rental Criteria?

You likely already know what rental criteria includes, but here’s a quick refresher. Rental criteria refers to a set of standards that applicants are required to meet in order to be considered “approved,” “conditionally approved,” or “denied” tenancy at your property. Although rental criteria can vary, it typically includes the following:

  • Credit scores
  • Income requirements
  • Specific criteria regarding eviction records
  • Specific criteria regarding criminal convictions

Although you can adjust rental criteria to your own standards and personal preferences, you’ll need to check to make sure you’re following Fair Housing Laws to avoid anything that could be seen as discriminatory. Likewise, it’s best to review your local laws to make sure your criteria don’t conflict with regulations regarding factors like criminal or eviction records.

If you choose to include criteria that involve current or previous landlords, or personal references, be cautious about the source. For example, it’s possible an applicant could provide the number of a friend or relative instead of a landlord. Tenant verification also less objective than credit history, for example, but it’s often the best first step to see if you’re interested in screening the applicant further. If you’re planning to include tenant verification in your criteria, save yourself some time and hassle by ordering yours from TSCI.

Key Factors for Creating Your Rental Standards

As you establish your written criteria and audit them annually, here are some important factors to keep in mind:

  1. Always Base Your Decision on Objective Data

Although some landlords and property managers investigate prospective tenants by looking at their social media or other subjective methods, doing so is a good way to potentially find yourself in legal trouble. Your leasing process should always use objective data, like credit, criminal, and eviction history.

A good way to make sure you’re not going out-of-bounds is to work with data from a tenant screening service, like TSCI. Screening reports provide objective, legal information to help you decide whether the applicant might be a liability.

  1. Avoid Blanket Standards

Blanket standards, also called bright-line standards, include overly broad language in your written criteria. This means the standards don’t factor in the differences between federal, state, and local laws. Blanket standards can increase your liabilities, as one may be able to argue that they’re discriminatory.

One example of this would be saying one of your requirements is “no felonies.” A rule like this doesn’t take into account that what one state considers a felony may not be considered a felony in another state. In some states, it’s considered a felony to possess marijuana; in others, it’s completely legal. Blanket standards could potentially bar a good applicant from meeting the criteria without considering why they were convicted.

  1. Local Laws

Write up a rough draft of your rental criteria, including the requirements for meeting “approved,” “denied,” and “conditional.” After that’s done, take a look at your local laws. These can significantly affect which information you’re allowed to use to make a decision on an applicant’s eligibility. For example, in Cook County, Illinois, landlords and property managers may only consider criminal convictions that have occurred within the past 3 years. In Seattle, Washington, the only criminal record you’re allowed to consider is the National Sex Offender registry.

This is especially important because many screening companies have an industry standard of criminal records going back 7 years. If you weren’t aware of a local law stating you can only consider the past 3 years, and you make a rental decision based on a conviction that happened 5 years ago, you could end up in legal trouble. Fortunately, TSCI follows all current local regulations regarding criminal and eviction records, so you aren’t provided with any information you can’t legally consider.

  1. Protected Classes

As long as you’re basing your rental decisions on objective data, considering protected classes shouldn’t be an issue – but it doesn’t hurt to review it anyways. As an added precaution, you should check to make sure your criteria don’t infringe on any federally or state-protected classes. This includes discriminatory language or criteria based on:

  • Race
  • Color
  • National origin
  • Religion
  • Sex
  • Familial status
  • Disability.

Depending on your state, you may have additional protected classes, such as source of income, sexual orientation, gender identity, or gender expression.

  1. Adjust Your Standards Based on the Property

It wouldn’t make sense to have the same rental standards for a luxury apartment as you would a small studio on the outskirts of town, so when creating your criteria, think about the types of applicants your property is likely to attract. If you have more than one rental, consider tailoring your criteria to each property individually. This could mean adjusting your income requirements or credit scores required for approval, or sorting your properties by type, and create a set of criteria for each category.

Apply Your Rental Criteria Equally

Once you’ve determined your leasing criteria, you’ll need to make sure you apply them equally to each applicant. Every applicant should be subject to the same qualifying questions, screening process, and rental standards. Even though your properties may have separate standards, make sure each applicant is treated equally within the property’s criteria.

This is one important reason to have your rental criteria written out. Whether you’re training a team at a property management company or you’re an independent landlord, written criteria give everyone a clear checklist, so to speak, that can easily be referred to. Without this, it’s easier to make exceptions or unintentionally overlook an important legal consideration.

For more information on vetting applicants, writing leases, and other helpful tips, visit our blog.

Posted by & filed under Property Management.

Messy Room

Dealing with messy tenants can be a tricky situation. Trash on the patio is one thing, but it’s another thing completely if there’s mold growing in your rental due to the tenant’s slovenly lifestyle. Everyone has a different idea of what “clean” looks like, so how can you ask your tenants you’d like them to keep the property up to your standards? Here are a few tips on how to go about asking your tenants to clean up their act. Please note this is for informational purposes only and is not intended as legal advice.

Why Does Cleanliness Matter?

Technically, landlords shouldn’t be telling tenants how and when to clean, but if their cleanliness is becoming a health hazard or could damage your property, this is a valid reason to address it.

Some tenants may not see their messiness as a problem. After all, they’re the ones living in it, so why should it matter? Unfortunately, there are some expensive issues that come with their way of living – which could come out of their security deposit. If you need to confront your tenants about their cleanliness, here are some issues you can mention:

  • Structural damage – Large, damp messes can leave behind unsightly stains, rot, and smells, that can only be removed by professional cleaners. There could also be damage to support beams or other important structures of the property, which could be a safety hazard.

  • Infestations – Messy living areas can attract a variety of pests, like cockroaches, water bugs, flies, ants, and rodents. Besides being gross, they can be a health hazard. Some of them can carry vector-borne diseases or affect allergies and asthma. If you have several units on the property, they can also impact neighboring tenants’ quality of life. Pests can be difficult – and expensive – to get rid of.

  • Hygiene – Good hygiene is an important topic, especially with the pandemic. Remind your tenant that you’re responsible for ensuring the property stays safe and clean for all tenants, including future residents.

When addressing cleanliness with the tenant, you may also want to consider their age. Are they a young college student? If so, it’s common for younger people to be a bit messy as they get into the groove of taking care of themselves. Try to put aside your frustration and view it as a positive teaching moment instead.

What Types of Cleanliness Issues Should Be Addressed?

Clutter and garbage here and there is unsightly, but it may not be enough to bring it up to the tenant. Here are some more serious issues that are worth addressing:

  • Mold
  • Animal feces
  • Excessive garbage
  • Rodents, roaches, or other pests
  • Overwhelming or unpleasant odors
  • Spoiled food left out or piles of dirty dishes
  • Sticky or strange substances left on surfaces
  • Junk or clutter that blocks entryways or air vents
  • Hoarding*

*If you believe your tenant is a hoarder, you should be careful with how you approach the situation. Since hoarding is considered a mental health disorder, there could be legal and medical protections to consider. Federal (and some state) laws prohibit discrimination based on hoarding and require landlords to make reasonable accommodations. If in doubt, consult with legal counsel on how best to proceed.

Keep Communication Open

Once you’ve noticed a cleanliness issue, it’s important to say something. If you noticed the problem and walked away, that’s understandable! It can be difficult to know what to say at the moment. Contact your tenant and let them know in a professional and kind way that you have concerns about potential health and safety violations.

Make sure to be understanding and address any limitations the tenant may have in their life, such as long work hours, family, or mobility issues. You should also double-check your lease to ensure you’ve included a clause that states the expectation of the tenant to maintain the cleanliness of the property for health and safety reasons. If you do have such a clause in your lease, make sure to bring this up in the conversation.

Tenants want to feel you care about them, the property, and the community, so make sure to let them know their health and safety are important to you. You can say something like, “It’s important to me that the property is safe for everyone, and it’s my responsibility to make sure it is. I’m concerned that the current state of the property could cause health and safety issues due to the [mold, pests, or other concerns].”

It’s always a good idea document when you talked to them and what was discussed. You may also want to consider sending a follow-up email regarding your conversation. This serves two purposes; it reinforces what was discussed, and it provides you with additional documentation.

In some cases, being firm about the cleanliness issue won’t be enough to get the tenant to change their ways. If you’ve already had a discussion and sent a follow-up email without any sign of progress, it may be time to send the tenant a formal notice. Check with your legal advisors to determine the specific language you should include and to make sure you’re going about everything legally.