Tenant Screening Services
Tenant selection is a critical business decision that can have significant impact upon a landlord’s rental operations. To make an informed decision for tenant selection, a landlord relies upon tenant screenings as a risk assessment tool to identify and evaluate known or reasonably foreseen risks as presented by a rental applicant. Tenant screening is a landlord’s due diligence for asset protection and duty of care to his tenants.
The tenant screening service provider that the landlord chooses as a business partner also has a significant impact on rental operations by the quality and scope of his business products for tenant screenings and, accordingly, their use in the tenant selection decision.
The due diligence that goes into developing the landlord’s rental standards and requisite tenant screening criteria must extend to the evaluation and selection of his tenant service provider. The selected provider conducts important risk management assessments that used with other risk prevention practices protect the landlord’s business. The tenant screenings conducted by the service provider provide data to help defend against potential liabilities of tenant financial risk, property damage, lawsuits, and claims of tenant discrimination or landlord negligence.
A landlord should be confident in his tenant selection decisions. The landlord places his confidence in the screening service provider to accurately compile and report applicant consumer data for qualification to the landlord’s rental standards. However, there are many tenant screening service providers offering a variety of screening products on various platforms allowing a landlord to customize options for the right screening tools to support his business requirements. Which service provider is best for a landlord’s rental operations requires landlord analysis and evaluation of critical elements in the decision making process for tenant selection.
It can be beneficial for a landlord to prepare a checklist of the important criteria to evaluate potential tenant screening providers. The checklist can be used to analyze the products, pricing, and screening process that each provider uses to produce tenant screening reports.
The following list is representative of important considerations that could be used in evaluating a screening provider’s qualifications. A tenant screening service provider should be:
- Knowledgeable of applicable federal, state, and laws regarding the use of tenant screenings in the jurisdiction of the rental property location. Both the landlord and the service provider must be compliant with applicable laws.
- Able to offer a wide range of screening products, e.g., credit reports and background reports. If the product line is too specialized, a landlord would need to have multiple screening providers to obtain all necessary screenings for his applicant. Having to interface with multiple providers and different collection and delivery methods can present challenges in analysis and evaluation of reports or the reports could contain conflicting or confusing information requiring further investigation and verification.
- User friendly in their process for data entry and data return for access on multiple platforms. Clear, understandable information should be presented for products, pricing, and process. Instructions should be provided for guidance on data entry, data retrieval or delivery of processed data. Frequently asked questions should be posted on the website and direct access to trained service staff for help on problems with reports, billing questions, or other assistance should be readily available. If the screening process is cumbersome or difficult to understand and complete, a landlord should consider another provider. Ideally, being user friendly would mean simple, direct data entry and retrieval in a timely manner. Transparency and clear language are important considerations to help select a good qualified tenant quickly and easily. A landlord should check to see if the provider posts sample reports on his website or has a video demonstrating how to enter an order for screening reports as a preview of what the landlord could expect if he engages the services of the provider.
- Capable of processing requests in a timely manner. Delays in processing or long intervals before reports are returned can cause a landlord to lose a good prospective tenant. Time is of the essence in screening and selection to fill a vacancy as soon as possible.
- Available for customer service. Customer support is all important to a busy landlord. A major complaint against screening providers is not being able to reach a representative to ask questions or resolve a problem. Real, live personal contact with a trained friendly customer service rep is valuable in of itself and is a primary consideration in selecting a provider. If the provider offers flexible hours of customer service, the greater the chance that the provider will get the landlord’s business. Applicants don’t just apply during regular business hours. Landlords want a provider that can help them qualify an applicant nights, weekends, or holidays. Client reviews and ratings may provide insight on real time response to landlord questions and help in resolving problems.
- Concerned with quality assurance that report data is accurate, verifiable and current. Providers should be able to furnish information regarding how their system matches rental applicant records to corresponding data with appropriate filters in place to identify and remove duplicative data and minimize errors of false reporting. Providers should be able to provide information on what databases are used for public records and how often the database information is refreshed.
- Transparent in their product pricing and customization options. Providers should post clear understandable pricing structures to define price points for affordability and flexibility for landlord productivity and cost efficiencies. A la carte pricing can be attractive to landlords that need only basic services. Package pricing of the most utilized screenings can offer a more comprehensive screening report yet at a lesser cost than purchasing several products separately. A landlord may want to ask whether the applicant can pay the screening report fee or whether the only option is for the landlord to pay the screening costs.
A landlord can compare product costs from several providers but may find that prices of most providers are fairly consistent with the level of product being offered. If the provider does not show product prices on his website, or products descriptions and details of the pricing plan are not clear the landlord should call for a quote and request a better explanation of the products offered.
- FCRA compliant with requirements and procedures for tenant screening providers. Tenant background checks are considered consumer reports under the Fair Credit Reporting Act (FCRA) if they are used to help decide eligibility housing and include information that has bearing on a consumer creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. Both landlords and tenant background screening providers are subject to FCRA compliance. The provider is required to follow reasonable procedures to ensure accuracy, require certifications from their clients, and provide clients with information about the FCRA.
An important question to ask the provider is how the adverse action process is handled. An adverse action notice is required by FCRA if the landlord chooses not to rent to an applicant based upon the content of a background check.
- Utilize current technology measures to ensure data security and safeguarding of sensitive information to prevent data theft, and data fraud.