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Rental Verification: How to Legally Run a Tenant Background Check

One of the top priorities of a landlord is making sure that they have reliable tenants. These are people that generally will pay their rent on time and not cause trouble in the neighborhood.
In Canada, about five million people are renters.With that big of a pool to choose from, some landlords may choose to have a tighter tenant screening process. For that, they will need rental verification.What is this? What rights do landlords have when going about this?This is your guide.

Getting Permission

The first thing that you need to keep in mind is that in most areas of the country, a landlord needs permission from the tenant to conduct a background check before doing it. This means that they need to get a written signature and be upfront about what they are doing.The reason for this is that it can violate someone's privacy if you do not get the right permission granted in advance. So, you are likely going to have to at least speak to a tenant before going further with their application process.

Covering the Cost

The next thing you have to realize is that background checks are not free. With that in mind, you have two options for how to handle this.One option you have is to just cover the cost yourself and have it absorbed through another tenant fee. This can be in the form of a deposit or even their rent.Another option you have is to charge the potential tenant a fee for conducting this background check. You can decide to tell them that they have to pay for this directly or indirectly and include it as part of an application fee.

Setting Standards

Something that you should do in advance is set standards on what is acceptable and what is not acceptable to discover in a background check. For a landlord, two of the biggest priorities should be the safety of the other tenants along with reliability when it comes to paying rent on time.Let's say that a potential tenant has one arrest in their background check for minor possession of marijuana. If you are a landlord that does not consider the use of marijuana to be a big deal, you may be willing to overlook this.However, if there is a more serious discovery on a background check, such as if the person is a registered sex offender, you will be much less likely to grant them approval for your apartment.Then, you get to a gray area when it comes to reliability to pay rent on time. One of the areas you can check for this is someone's credit score.In Canada, the average credit score is around 650. So, if you notice someone that has an 800 credit score, you should have no trouble approving them if everything else checks out. However, if someone's credit score turns out to be below 450, you may think twice about their reliability.At the end of the day, you have to decide what you feel comfortable approving from a background check as a landlord.

Check Sources

If there are any sources on a tenant's application, you should make sure you take the time to verify them. Checking on these can give you very useful information.One source can be someone trying to show proof of employment. Another source can be a contact that the tenant had in the last place that they lived.So, let's just say that a tenant is trying to pull one over on you and lie about having current employment. They may have shown you their last pay stub because quitting or getting fired.Then, you decide that you are going to contact the source they listed for this. The tenant may not have thought that you would actually check this. Then, you find out that the tenant is no longer employed.Checking your sources could allow you to reject a tenant you do not trust or at least think twice about accepting one that you are on the fence about.

Do Not Discriminate

Finally, you need to make sure that you are discriminating against tenants that are applying to your apartment listings. Check your local laws to see what would be considered discrimination.In most places, it is illegal to discriminate against tenant applicants. This includes anything from judging people based on age, sexual orientation, race, gender, and more.Being mindful of this can help keep you out of a lot of legal trouble in case someone decides to turn around and sue you for wrongful discrimination. More importantly, being mindful of this can make you a more considerate person when deciding what applicants to accept.The same goes for discoveries that you can find on a background check. You need to be mindful of what you are legally allowed to reject someone for on this.

Get Rental Verification

These are some things that you should know about background checks for rental verification. Before you decide to conduct a background check for a tenant applicant, have clear standards about what can be a deal breaker on a background check.Also, make sure that you get someone's consent before conducting a background check as well as be mindful about what you are legally allowed to reject someone for. From there, check any sources the tenant has on their application.Do you want to know more? Message Axford Property Management here with your questions.