Completing a thorough tenant screening process is number one on your ‘to do’ list when choosing tenants to rent your property. You need to be sure that you have renters that you can trust. But can a landlord choose tenants with complete freedom? Well, yes and no. You can create a sample tenant screening criteria for your perfect tenant, but you must stay within the law when you do so.
You want to maximize your chances of landing the best tenant, so check out these top tips for finding the right renter.
Stay Within the Law
As a Landlord, you must treat all applicants equally. The Federal Fair Housing Act is a law that ensures that you don't discriminate when you’re looking for a tenant. There are certain protected characteristics that you must consider when you are choosing a tenant.
- Pay stubs
- W-2 tax forms
- W-4 forms
- Bank statements
- Court-ordered settlements
- Employment contracts
Depending on where your property is, you will also have to ensure that you know what the state and local laws around fair housing are.
So, how can a landlord choose their tenants? There are some legal restrictions you are allowed to put on the person who rents your property.
The law permits you to refuse to allow smoking on your property. Smoking isn’t considered a protected lifestyle choice, so you are within your rights to deny applicants who are smokers. You can add an addendum to your contract to ensure tenants understand that they will not be allowed to smoke in the property.
You are allowed to refuse to rent to a prospective applicant with pets. If you decide that you are ok with certain types of animals in the property, you can choose to define what kind of pet you’re willing to accept. It is wise to charge a pet deposit if you do take animals, and you may also wish to consider charging an extra monthly fee.
The exception to this rule is support animals that aid with emotional or mental health problems or physical disabilities. A support animal is defined as a medical tool rather than a pet, and as such, under the Federal Fair Housing Laws, tenants are protected if they need one. Renters who have a support animal are exempt from no-pet rules and related fees.
Tenant screening is imperative to make sure you choose a renter who is economically responsible. You want your tenant to pay their rent on time and not cause you any financial headaches or additional expenses.
When you use an online tenant screening company, you will get access to a prospective renters’ credit report at the touch of a button. You will be able to choose your tenant based on their history of making payments on time, and their level of debt. This check will also show up any previous evictions or bankruptcies in the tenants’ past, which you can ask them about.
Ensure you also verify the renters’ income by asking for copies of pay stubs and taking up their employment reference.
Criminal Background Check
Check your prospective tenants’ ID and do a Criminal information check as part of your screening process. The check will show minor and more serious offenses and will usually include searches of:
- Federal court records
- State criminal records
- County criminal court records
- Department of Corrections offender database
- Sexual offender information
Ask renters to provide references from their previous landlords on their application. It is your responsibility as the landlord or property manager to get in touch with the referees to get an idea of how they behave as a tenant. If your tenant hasn’t rented before, or they are a student, then you won’t be able to do this; in this case, consider adding a co-signer to the lease for your own security.
Check out your tenants’ address history and their previous employment details, and this will give you an idea of whether they have a stable lifestyle. If you are choosing between two applicants, you might prefer someone who tends to rent long term and who holds a steady job. If you rent to someone who moves frequently, you’re likely to have to advertise and go through the screening process again soon.
As a landlord, you know that the more people that live in your property, the greater the wear and tear is likely to be. Although the Department of Housing and Urban Development does not have a hard and fast rule on occupancy levels, under the Fair Housing Act a maximum of two tenants per bedroom is considered fair unless there are specific considerations, such as:
- Special housing codes
- Size of bedroom and layout of the property
- Number of children and their age
- Capacity of the sewerage system
As a landlord or property manager, you can select your tenants within certain limitations. You can choose the renters that you believe are going to be the best fit for your property based on your preferences under the Fair Housing Act. This means that you are free to exclude tenants with pets or smokers, but you cannot discriminate against protected groups.
When choosing your tenants, make sure to use a comprehensive tenant screening provider that can give you all the information that you need. Making an informed choice is easier if you have credit records, background history, and an idea of how responsible financially and otherwise, your tenant of choice is.