Reusable Tenant Screening Reports
Reusable tenant screening reports are prepared by a consumer reporting agency at the direction of and paid for by the prospective tenant and made available directly to a prospective landlord at no charge by the consumer reporting agency. A reusable report generally contains: (a) a consumer credit report prepared by one of the national credit bureaus within the past thirty days; (b) a report containing the prospective tenant’s criminal history; (c) a report containing the prospective tenant’s eviction history; and (d) an employment verification.
In many rental markets rental housing supply is limited while rents continue to rise. Applicants may need to submit applications to multiple landlords in order to secure rental housing. This creates a financial burden on many applicants as the application fees can range from $20 to $75 for each property application. If applicants did not have to pay a separate application fee for each property, but instead could re-use a current tenant screening report (dated within 30 days), the applicant could recognize significant cost savings in his rental search.
Legislative actions have been taken by some states to help reduce tenant financial costs of application and screening fees by allowing applicants to provide landlords with access to reusable screening reports. Statute provisions and requirements for reusable reports may differ by jurisdiction. A landlord is responsible for conducting due diligence for legal compliances in the appropriate jurisdiction for his properties.
States that have legislation addressing reusable screening reports include California, Washington, Maryland, Wisconsin, and New York.
California
California recently passed Assembly Bill 2559 which standardizes reusable tenant screening reports in efforts to lower rental application costs. The bill which takes effect January 1, 2023 allows applicants to purchase reusable credit reports and provide access to the applicant’s credit report to multiple landlords over a thirty day period. A landlord cannot charge the applicant an application fee if the landlord accepts the applicant provided report. A landlord can however require the applicant to pay a fee for a separate background check if that is the landlord’s standard screening practice.
The new law makes landlord acceptance of reusable reports voluntary. The landlord retains his right to require applicants to follow the landlord’s practice of obtaining tenant screening reports from the landlord’s selected screening provider.
The California bill defines the term “reusable tenant screening report” to mean:
- a consumer report that was prepared within the previous 30 days by a consumer reporting agency at the request and expense of an applicant,
- a consumer report that is made directly available to the landlord for use in the rental application process or is provided through a third-party website that regularly engages in the business of providing reusable tenant screening reports that are available to landlords and complies with all state and federal laws pertaining to use and disclosure of information contained in a consumer report by a consumer reporting agency, and
- a consumer report that is available to the landlord at no cost to access or use.
A reusable tenant screening report is required to include specified information, including the results of an eviction history check.
Washington
In Washington, a comprehensive reusable tenant screening report must contain:
- a credit report,
- a criminal history check in all jurisdictions indicated as prior residence over the past 7 years,
- an eviction history over the previous 7 years,
- income and employment verification, and
- current address and rental history.
The comprehensive screening report is valid for 30 days. After that time the applicant will need to request a new report.
The landlord must provide written disclosure about the screening process to an applicant before the applicant submits an application or pays a screening fee. The notice must include:
- the type of information that will be used to conduct tenant screening (e.g., credit report, background check, eviction history, public records),
- criteria that could cause the application to be rejected,
- contact information of the consumer reporting agency (if the landlord is using a third-party screening company), and
- whether or not the landlord will accept a “comprehensive reusable tenant screening report.”
A landlord who does not provide written notice of the screening process cannot charge an application fee. Additionally the landlord may be liable to pay the applicant a specified fee for failing to comply with statute requirements.
The statute requires landlords to notify applicants whether the landlord accepts comprehensive reusable tenant screening reports. Notification can include:
- a notification statement on the rental listing,
- a notice on the landlord’s website homepage,
- on the rental application page,
- any other calculated manner to notify the renter.
If a landlord accepts reusable reports, the applicant cannot be charged for application fees, fees to accept the report, and fees for additional background checks. However, the landlord can charge the applicant for additional screening if the report is not comprehensive or valid.
A landlord may require a prospective renter to certify the reusable tenant screening report. This is to ensure that there have not been any changes to the applicant’s name, address, bankruptcy status, criminal history, or eviction history in an attempt to hide unfavorable information about the applicant. Certification of the report allows the landlord to use the certification document in any legal proceeding in the event of discovery of altered information.
Maryland
A landlord is required to notify a prospective tenant regarding whether or not the landlord accepts reusable tenant screening reports, either in writing or by posting notice in a conspicuous manner on the rental listing, the landlord’s website homepage, the rental application, or other type of notification method.
Maryland law requires a reusable tenant screening report to contain the following:
- a credit report;
- for each jurisdiction indicated as a prior residence of the prospective tenant, regardless of whether the residence is reported by the prospective tenant or by the consumer reporting agency preparing a consumer report:
- a comprehensive criminal history records check for all federal, state, and local charges against and convictions of the prospective tenant over the previous seven years; and
- a comprehensive eviction history for all state and local jurisdictions for the previous seven years;
- verification of employment and income; and
- current address and rental history.
If a landlord accepts a reusable tenant screening report, the landlord is prohibited from charging the prospective tenant a fee for the landlord to access the report or an application fee. In addition, a landlord may require a prospective tenant to certify that there has not been a material change to the applicant’s information since the date that the report was generated.
Wisconsin
Wisconsin Administrative Code requires a landlord to inform prospective tenants of application fees before the landlord can obtain their credit reports. If an applicant can provide the landlord with a consumer credit report that is less than 30 days old, the landlord cannot charge an application fee.
New York
Landlords are required by law to waive application fees if the applicant can provide a copy of a background check or credit check conducted in the past thirty days.
Considerations
As of this writing a landlord can choose to accept an applicant’s reusable tenant screening report per state statute and legal compliances such as written notifications are followed. The choice may be dependent upon several business factors, such as market area, market conditions, demographics, and number, size, and type of properties.
Conventional tenant screening practices provide a standardized consistent methodology to qualify applicants to rental standards. Screening practices that accept a reusable report from applicants should also be standardized and consistent in methodology and application. Accepting a reusable screening report from one applicant but not another applicant could lead to charges of discrimination. A landlord should follow a written standard of screening with all applicable disclosures of practices for all applicant screenings.
Care should be taken to ensure that the reusable screening report provides all screenings the landlord deems necessary to conduct his business. “Comprehensive screenings” may differ by state statute and it could be necessary for the landlord to conduct additional screenings to fulfill his rental requirements. Permission and fees for additional screenings must follow legal requirements by statute. Screening reports should only be accepted from a consumer reporting agency or a legally compliant third party screening vendor authorized to provide screening services.