5 Things You’re Doing Wrong with Tenant Screening

Tenant screening is one of the landlord’s most valuable tools. A good screening practice ensures that the most qualified applicants get through, while saving you from wasting lots of time waiting for, giving tours to, and negotiating with unqualified applicants. Not all tenants are bad for all rentals. But regardless of what kind of tenant you want, here are five things you’re probably doing wrong with tenant screening.  (Share with your staff.)

Rental Application under Magnifying Glass

1. You’re Waiting too Long to Say “No”

Your time is valuable. There are many more tenants who want your apartment than will qualify. You need to find out as quickly as possible whether someone is qualified and tell them “no” as soon as you find a reason. This helps the tenant, too. They don’t want to waste time with a landlord who’s leading them on.

For instance, we recommend a minimum qualification that all applicants combined have total gross income greater than three times the monthly rent.  If a tenant calls you, find out how much they make.  If they make only twice the monthly rent, tell them “no” right then and there. No tour. No application.

If they smoke and you don’t allow smoking, say “no.”

If they’re being evicted and you don’t take tenants with an eviction history, say “no.”

If they have more people or more cars than you can legally or safely accommodate, say “no.”

Does this mean you need to be rude? Of course not. You can always say, “Oh, I’m sorry, but I just can’t rent this apartment to a smoker. The whole property is non-smoking so you’d have to go out to the sidewalk even in winter, and you just won’t be comfortable.”

2. You’re Saying Discriminatory Things

A very common question is, “Do you take Section 8?” Part of the reason this is so common is that Massachusetts employs “testers,” who from time to time make inquiries. It is against Massachusetts law to discriminate against an applicant because they receive public assistance. The answer to “Do you take Section 8?” is always, “Yes, I do.”

Realistically you might never have taken Section 8 before. It’s safe to admit that. Say, “Well, I haven’t used that process before but I’m sure we can figure it out.” Usually the tenant is only too happy to connect you with people who can answer your questions.

There are a host of other protected categories.

Q: “Do you rent to gay people?”  A: “Yes, I do.”  You cannot discriminate on the basis of sexual orientation.

Q: “Do you rent to transgender people?” A: “Yes, I do.”  You cannot discriminate on the basis of gender identity.

Q: “Do you rent to single moms?” A: “Yes, I do.”  You cannot discriminate on the basis of marital status.

Q: “Do you rent to children under six?” A: “Yes, I do.”  Even if you have lead paint in the apartment, which constitutes a hazard to children, you cannot refuse to rent to them because of the lead paint.  You must use remediation procedures to get a letter of interim control or full deleading compliance.  (There a few exceptions to the children rule; for instance MGL 151B Section 4, paragraph 11-1.)

Q: “I just got back from service in Iraq.  Do you rent to veterans?” A: “Yes, I do.” You cannot discriminate against veterans.

Q: “I have a service dog.  Is that okay?” A: “Yes, I just need a doctor’s note.”  You cannot discriminate against emotional or physical handicaps requiring animal support.

Q: “I’m from Kreplakistan.  Do you rent to Kreplakistanis?”  A: “Yes, I do.”  You cannot discriminate on the basis of national origin.

Q: “I’m deaf.  Do you rent to handicapped people?” A: “Yes, I do.”  You must make reasonable accommodations, especially if the tenant will pay.

3. You’re Not Keeping a Paper Trail

You might say “no” to someone only to get in trouble for discriminating.  You tried to save yourself time but now you have a lawsuit.  For instance, you could tell a wounded warfighter that you won’t rent to her because she smokes, and the apartment is non-smoking. If she feels that the true reason was that you didn’t support her involvement in the war, she could threaten you with a suit for discrimination against veterans.

Your paper trail should start with a clear apartment ad stating the restrictions (e.g., no smoking). You should take notes of every phone call. If you wish to record a call, you may say, before you begin recording, “This call may be recorded or monitored for legal compliance.” CNET recently reviewed some recording apps.

Then if you do get threatened with a suit, you can say, “Actually, my paper trail clearly shows the reason for declining this applicant was XYZ.  That reason is allowed under the law.”

4. You’re Afraid to say “Yes”

Tenant screening sometimes turns into picking a new friend.  Don’t let it be like that.  You don’t have to understand a person’s life choices, agree with their choice of hair color, or have them over for dinner.  This is a business relationship, and sometimes really colorful and unusual people will walk into your business with good qualifications.

Your decision should be on the basis of economic qualifications.  Also, you should have a reasonable expectation that they will cooperate with you for maintenance and monthly rent payments.  Your rental agreement should outline the behaviors you expect and the consequences for non-compliance.  Your “gut feel” should be positive. You absolutely should not wait to find someone you would invite over for dinner.

If all these factors are in alignment, look past whatever you find unusual and rent to them. Economically qualified people with cooperative mindsets usually work out. We recommend a rigorous numerical assessment of each candidate, like our applicant scoring sheet.

5. You’re Not Asking the Right Questions

The most important thing is to get the tenant to admit the truth about their situation. No one wants to live a lie, and many people will be only too happy to tell you what’s going on in the hopes that you will understand. Maybe you will.

Instead of asking, “Do you have any pets,” which creates defensiveness, get in the habit of asking, “How many pets do you have?” The former question implies that “zero” might be the desired answer. The latter question implies that one, two, or seventeen might be allowable. Ask the same question regardless of whether you allow pets.

If a tenant goes on a rant about their current landlord, don’t say, “Golly, I guess you’re glad to get away from that bad landlord.  Instead ask, “Are you being evicted?” Come right out with it. Your business might not weight this factor very heavily. Or it might. Either way, both you and the tenant want to find a place where the arrangement is welcome.

You should also ask, “What kind of recommendation could you get from a previous landlord?” That invites the truth, whereas “Did your previous landlord like you?” invites a “yes.” Ask, “Why are you looking to move?” and “How many people will be living with you?” as similar open-ended questions.

So those are the five most common mistakes we see with tenant screening. Do you think you’ll change anything in your process?  Let us know in the comments below!

 

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7 Responses to 5 Things You’re Doing Wrong with Tenant Screening

  1. SocialCritic says:

    There’s another mistake landlords and property managers make:

    6. Asking open-ended questions about past bankruptcy, eviction and the like.

    It may not be illegal to discriminate against people who have had a prior bankruptcy, eviction or even a criminal conviction. However, the growth of investor-owned multifamily rental properties across the nation, with their emphasis on strict, uniform applicant policies, may spawn demand for change to Fair Housing laws as we know them.

    There is a practice among too many to enforce a blanket policy of rejecting rental applicants who have had bankruptcies at ANY time in the past. Bankruptcy reports typically don’t show up beyond 10 years on a credit report, but that doesn’t stop landlords from demanding information that has little bearing on current risk, debt or credit worthiness.

    My advice, even if it isn’t yet illegal to ask an open-ended questions, is to voluntarily limit such questions to a reasonable timeframe. Putting an upper limit on how far back you expect the applicant to go in the interest of housing may in fact be the lesser of two evils. Why? Because the alternative is to contribute to a whole new crop of government anti-discrimination protections that only serve to limit your discretionary options.

  2. back fired - says:

    If one has an apartment to rent and lead paint is a concern. Note even a removeal of lead paint will not free Landlord of a lead paint liability lawsuit. A bit dot of it can be undetected and result int liability onto them, even if inspector certificates of removeal are acquired. Plus many will sue anyways if lead paint in child came from another environment they will lie and state it was from the apartment. Landlords that can’t affair to de lead should have the right to deflect people with kids. They do have the right to do so in Massachusetts when some one old lives next door under a new state statue. Its ridiculous – a valid reason is not allowed and others are allowed that are less valid. Note : A two family home that is landlord occupied is different and can deny occupancy to tenant with children as is specifically allowed in the Federal Statute, As well as a two family unit that is to small to hold a family such as a studio apartment in such case Land Lord may deny tenant from over loading unit and only rent it as a one bedroom – only to a single person or couple only. If one owns a place for rent wether held legal or not if you know lead paint exists or not – make your new tenant with kids , that forces their way in after you told them it may have lead paint to sign a lead paint disclaimer that will relinquish their right to sue you, or lower your liability. The courts have yet to rule on it , some areas have and do not feel parents should knowingly be let go completely when done so. The release should relinquish liability, place the parents in a position they knew up front deleading would not be done, that they would share in liability , or have all of it. The Massachusetts Lead paint law has been heavily slammed by experts , the Rhode Island law favored over it and states without lead paint laws actually have less lead paint , and more likely to have it removed since it can be legally removed at less costs because its not declared a hazardous thing removeal procedure thing. Those with lead paint laws learn to live with it, cover it with a board as is mandated by law, yet its not removed and lies dormant, others without the law can have and do strip old paint and re paint continually thus diminish and remove lead paint more rapidly and fully since no new paint may contain lead paint in manufacturing after year such an such many years ago – it over time means it’ll be gone – in areas without lead paint laws. But in areas with lead paint laws it won’t and costs fly in those areas since specialist now must do it – it costs more than the house- it doesn’t get done all learn to live with the hazard and play dumb ignore it etc…

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