Employment & Income Verifications
A landlord screens an applicant to determine if the potential tenant would be able to meet a tenant’s required rent obligations. Accordingly, one of the first tenant screenings to conduct is verification of the applicant’s employment and income. If the applicant cannot qualify under the landlord’s financial criteria, there is no need to proceed with other screening reports.
Generally a landlord can request whatever financial information is required to verify the applicant’s ability to pay under the landlord’s legal, business supported rental criteria, provided the same standards are required of all applicants.
To verify employment status, a landlord can request an applicant to submit acceptable documentation from his employer, such as a current pay stub.
While wage earnings are the most common type of income, non-employment income could be verified by a landlord on a case-by-case basis with a verifiable document, such as an official statement of receipted funds and statement balances. A landlord should verify whether his state statutes or local ordinances have made source of income a protected class. As long as the applicant’s income comes from a lawful source, which includes Section 8 vouchers, a landlord cannot reject an applicant based on the source of his income.
Many landlords use the industry standard of 3:1 income to rent ratio. However, in localities that have enacted ordinances for low barrier screening for rental applicants, the landlord is required to use a 2.5 income to rent ratio for affordable housing rentals or a 2.0 ratio for subsidized rental housing. This is another reason that a landlord should verify his state and local requirements for tenant screenings.