Vital Ingredients of a Good Rental Application
Think about a Rental Application as information gathering from the past, the present and for the future. In other words the information you obtain on your Rental Application should allow you to properly screen your applicant’s past and present credit worthiness. But it should also contain information that you could use in the future to help find them if you ever needed to collect an unpaid debt.
The first most vital information of course is full name, including their middle name, and any senior or junior, as well as their date of birth and social security number. Credit Reports and Social Security Number Trace Reports pull information from the Credit Bureau based upon name and social security number. They can verify the social security number of the person and can often provide up to seven years past address information.
If a Credit Report or Social Security Number Trace Report does not show any past address information take this as a sign that the person has been avoiding applying for any credit and may be trying to avoid a collection or a garnishment. If a report comes back with an unverified social security number….. BEWARE. Ask to see two forms of identification including their social security card to make certain they are not trying to use someone else’s name or social security number. Yes, people do try this, more often than you would think. Especially if their application has been denied a time or two at an apartment complex.
When I worked in the Apartment Industry, for many years, I was dismayed by something people would often say to me when I had to deny their rental application. They would say that they would just go find a smaller landlord because they knew that there was a good chance that the landlord would not do any screening. I always hoped that this would not be the case, especially when I denied an application for serious criminal background information. Beware of anyone who calls about your rental and one of their first questions to you is whether you do background checks. Chances are they are looking for someone who does not.
The second most vital information on a Rental Application is their current address and any past addresses. I encourage you to get addresses for the last 5 years. Why so much address information? Eviction records from the court system are based upon name and address only. Think about it, that’s all you list on an eviction notice. This is the only information the court has when they complete an eviction so it’s the only identifiers that end up on an Eviction Report.
The question is... Would you deny an application if you saw several evictions filed from the same address against your applicant four years ago? I probably would. It indicates they could be a chronic late payer. So getting as much past address information as you can allows you to properly compare name with address on the Eviction Report against the name and address information on the SSN Trace Report and with the Rental Application. You need a good indicator of rental payment history so this is the first step in finding it.
This brings us to Landlord information. I say get Landlord information for the past five years too. Why? If you see a prior judgment for eviction from a few years ago, you should have the Landlord’s name and phone number to call. If the applicant says they can’t recall names or phone numbers use your County Clerk of Courts or County Auditor website to look up the Landlord information through the Property Tax Records. You can do this with any addresses that the applicant failed to list too. Don’t depend on the applicant 100% to give you correct information. It’s too easy for people to simply list a friend’s name and phone number as their Landlord. Of course you would get a fantastic reference.
Yes, screening a Rental Application is like being a good detective. You must look at all resources possible to make an informed decision about your applicant’s past rental history.
I talked about the importance of making certain you have properly verified the prior address and Landlord information on a Rental Application. Joe, from Albany, New York sent me a great email which said:
“Several years ago I received a call from a landlord confirming that I was the current landlord of his candidate. He said he got my name from the town clerk's office, (not the tenant). Seems the tenant gave him a friend's name as landlord reference instead of mine, because he knew I'd be truthful about his lousy history with me. Since then, I call the reference given by the prospective tenant, AND also verify with the clerk's office to find out who the actual owner of the prospect's apartment is.”
By obtaining a lengthy address history you may know right away if the person has moved around from state to state. So you will know if you need to order an Instant National Criminal Report not just an Instant State Criminal Report. And you’ll know ahead of time how much to charge for the application fee since an Instant National Criminal Report costs more. If you are just asking for a current address, and order a state or county criminal record, you will never know if they had a serious criminal past in another state.
Most felons think that moving to a different state will keep their criminal past a secret. If they don’t want to give you five years of residency, or if the Social Security Number Trace records doesn’t match up with the information that they give you. Consider it a Red Flag and be ready to ask more questions.
Most often when an applicant sees that you are serious about obtaining clear and concise information from them, they will open up themselves and begin to tell you about any problems with credit, criminal activity or evictions that they have had in the past. They will want to explain why they had these problems. Let them tell you. Sometimes the issues are reasonable issues that we can all understand, a lost job, and illness or even a divorce. These are all very relevant factors in determining whether or not an applicant will become a good resident on your property. Sometimes though you will be able to see through their story and know that this is not the right tenant for you. Below are some simple questions to ask your applicant. You will be surprised by how often you will get “yes” answers.
HAVE YOU EVER:
For the Future: If you recall I mentioned getting information on a Rental Application that could be helpful to you in the future if you need to collect a debt. The best source is two personal references. People often wondered and asked me why I wanted this. They would hesitate to fill out the information. I told them I needed friends and family information in case of emergency. Emergency information, yes, but it always helped me find them later when I needed to. If they owed money and skipped, or left no forwarding address I sent their Security Deposit Statement to their old apartment address in case it would be forwarded. But, I also sent it to both of the emergency contacts, under the Tenant’s name alone. Don’t ever send it addressed to the emergency contact’s name, that would be against the laws within the Fair Debt Collection Act.
When I got that loud screaming phone call back I knew where they were at.
“You sent me this bill to my mother’s house. I don’t owe this much money.”
Sure I would explain exactly what they owed and what efforts would now be made to collect it. I worked on getting them to make payment arrangements. Sometimes they would and actually paid it. The biggest weapon you have during that phone call is explaining that a monetary judgment will end up on their credit report and every landlord for the next ten years will know right away that you left without paying.
“You won’t ever get to rent an apartment as nice as the one you left behind without paying. Every landlord for the next ten years will know exactly how much money you owe me. You’ll have to go from place to place and have a very difficult time finding anything. But I’m willing to make a payment arrangement with you right now. Then as long as you pay it I won’t file for a judgment”
The final best source for future information is to include a simple sentence at the bottom of your Rental Application that will allow you pull any screening information you want to about them in the future. Here is the sentence:
I authorize the Landlord and their agents, including any collection authority, to obtain further address and employment information, and any necessary background screening information before, during and after the lease term for the purposes of collecting past due lease payments, late fees or any other charges that are owed to the Landlord.
If I did not get a good response from that phone call, I still knew exactly where to have the court send the case documents and I knew where to send the 30-Day Notice to Dispute a Debt Letter.