Landlord Reference Screenings
Tenant screenings are the tools to assess the applicant’s potential risk to the landlord’s business. Reference checking of the applicant’s current rental housing and his past rental history is an essential tenant screening. There is no better source of direct information regarding a tenant’s interactions with a landlord and neighboring tenants than reference checking with his past landlords.
Landlords understand the business of the landlord-tenant relationship and the policies and practices to protect that business. A landlord to landlord discussion of a former tenant who is now an applicant for a new rental can provide a frank exchange of information that is needed to evaluate the potential risk of lease default in a future tenancy. The fact that each landlord understands the risks in property management and can evaluate risk in a similar manner makes checking past rental history a valued risk management screening tool. A brief interview with an applicant may indicate a good match between the housing needs of the applicant and the landlord’s rental property. However, an interview with a past landlord as a rental reference may reveal details of a year-long rental relationship that tell a different story.
Reference checking of rental history is a simple but an important screening to help assess a tenant’s past performance in complying with lease terms and conditions, rental rules and regulations. Calling landlord references to determine whether the applicant satisfactorily fulfilled his lease obligations is a business safeguard. Failing to conduct all due diligence on applicants has the potential for claims of landlord liability and negligence.
Reference checking with a current landlord and past landlords is a verification process to identify red flag issues as well as to confirm the truthfulness of information supplied on the application. Some applicants hope that a landlord will be too busy with other matters to check rental references and the applicant can avoid having to explain a negative reference or a pending eviction.
Applicants wanting to withhold rental history may provide false or incomplete information such the name of a landlord/property manager or street address to prevent landlord reference checking. Applicants may name their friends as landlord references in order to conceal previous problems with a landlord. Research and verification is required to make sure the reference named on the application is the person who is actually the landlord/manager and confirm that the person is the appropriate party to verify past rental history. Independently researching the name of the landlord/property management company and the rental property address can be done using local and online public records. Having researched information before contacting the landlord/manager for an interview allows the landlord to be alert to false or misleading information. Legitimate landlords have knowledge of rental information that a person posing as a landlord would not know. Verification of the full name of the applicant to the full name of the former tenant is an important identity screening, particularly if the applicant has a common surname or generational suffix.
Current Landlord
Contacting the applicant’s current landlord may be informative regarding an impending eviction, serious rent default, or other lease violations that have been noticed. Some landlords are reluctant to contact the applicant’s current landlord fearing that the current landlord would provide positive feedback just to get rid of a problem tenant. However due diligence responsibilities require the landlord to make good faith efforts in qualifying an applicant.
If the applicant only lists his current landlord with dates of tenancy going back five years or more, it is still a good idea to call the landlord to confirm dates of the tenancy, that the tenant qualified each year for renewal and a satisfactory reference will be given.
An applicant may come prepared with a letter of recommendations. The landlord should still contact the rental reference to make sure the letter is legitimate and verify any other information provided by the applicant on his application or during an interview.
An applicant may request that the current landlord not be contacted. The applicant may not have given notice or may not want the current landlord to know he is looking. There is also the possibility that the applicant thinks the current landlord will give unfavorable information, which may or may not be justified. While the request is understandable, the landlord should adhere to his tenant screening policies. If one exception is made, other exceptions might follow. However, the timing of the decision to contact the current landlord could depend upon whether the applicant meets other qualification criteria. If the applicant fails to meet minimum criteria, there is no need to continue the process. If the applicant meets criteria, the current landlord should be contacted. Any information obtained from the landlord interview would be analyzed with information obtained from other screening reports for final evaluation.
Past Landlords
Many landlords require an applicant to provide rental history for the past three to five years. Usually that timeframe will provide at least one past landlord reference in addition to the current landlord. If the applicant has been a serial renter, moving quite frequently, that information may be of significance to some landlords who may choose to contact all past landlords.
In conducting rental reference checks, the best reference is a past landlord, not the current landlord. A past landlord will usually be open to questions and honest in his answers regarding the tenancy, since there is no longer a landlord-tenant relationship. If the past landlord was left with rent default or property damage, that information could be grounds to reject the applicant.
Some landlords may be reluctant to provide information even with the assurance that there is the applicant’s signed release of information. It may be personal reluctance or stated policy. At the least, a landlord should be able to confirm dates of tenancy, rent history, and security deposit amount. An important question is whether the landlord would be willing to renew this tenant. The answer or choice of words used may provide a valuable clue regarding the potential risk of installing the applicant as a tenant. The landlord’s answer, whether positive or negative, should be analyzed in context of that landlord-tenant relationship.
The willingness and extent of the current and past landlord’s cooperation may be dependent upon the approach the inquiring landlord takes during the interview. Most landlords will extend the courtesy of honest answers to the questions asked and expect the same consideration if they were to make a similar call in the future.
No Previous Rental History
An applicant applying for his first rental does not have a rental history, but that should not mean the applicant must be automatically disqualified or assumed to be less qualified than a tenant with years of rental history. A landlord may look to other references such as work references and personal references to help qualify the applicant. Standard tenant screenings for credit and background checks must still be conducted in accordance with applicable laws.
Interviews
Before conducting an interview, a landlord can prepare a list of questions to ask. Being prepared with a script is professional, courteous, and efficient. It also helps to ensure all questions are asked and in the same manner with each reference. Answers to the questions can be recorded on the worksheet and serve as written documentation to be placed in the applicant’s file.
Reference Questions
Information obtained through landlord references should be assessed against information obtained through other types of tenant screenings. A landlord must keep an open mind regarding any mention of personality conflicts, subjective feelings, or personal preferences as expressed by a past landlord. A positive reference by a past landlord does not necessarily mean a trouble-free tenancy. A decision to offer tenancy must be based on all objective data collected by the landlord’s tenant screening process.
A landlord should make sure there is no rush to offer tenancy without sufficient information and analysis of data. Equally a landlord must be sure there is no unintentional violation of fair housing laws by extending preference, privileges, or waivers of rental policies to certain individuals in certain circumstances. A policy of non-discrimination must apply to each and every applicant so that tenant screenings are conducted in the same manner, in the same way for all applicants.
Simple, direct questions may provide enough information to advance or reject an applicant. However, the manner in which questions are asked can influence what information is returned or how much information is returned. As an example a close-ended question encourages a short answer, generally a “yes” or “no” answer. An open-ended question encourages more explanation by asking for details. Open-ended questions facilitate clarification of a response while a closed-end question may just be a matter of confirmation. At no time should a question be structured to lead a respondent towards an answer that could be construed as discriminatory or biased.
When interviewing rental references, there are some key areas that many landlords focus on, such as:
- Identity verification
- Beginning and ending dates of tenancy
- Stated reason for leaving
- Required notice given
- Rent amount and payment history
- Security deposit, amount returned
- Warnings, notices given
- Legal actions taken
- Noise and disturbance complaints
- Property left in good condition
- Roommates
- Pets
- Eligible for renewal
Checking references with the current and past landlords is an essential risk assessment tool and perhaps the strongest indicator of an applicant’s future rental behaviors. A landlord must however evaluate an applicant’s qualifications using a variety of tenant screenings, not just one type of assessment. By using multiple types of screenings, if the tenant has been a problem tenant in the past there will likely be red flags that show up in other screenings.