Tenant Screening
Tenant Screening Category
There is a great deal of misinformation in the
tenant screening
industry regarding the so-called "Red Flags Rule", including the suggestion that
the Red Flags Rule (that portion associated with FACTA Section 114) applies to
landlords and property managers.
In late 2007, The FTC (and others) published guidelines implementing Sections
114 and 315 of FACTA. Rules relating to Section 114 of FACTA (Section 615 of
the FCRA), correctly referred to as the Red Flags Rule, pertains to financial
institutions and creditors. Apartment owners and managers solely engaged in the
business of renting apartments and whose use of tenant screening services is
limited...
State
landlord-tenant-law often places limits on what landlords can charge applicants
for tenant screening reports.
For
example, Washington's Residential Landlord-Tenant Act (RCW 59.18.257) states
that "If a landlord uses a tenant screening service, then the landlord may only
charge for the costs incurred for using the tenant screening service." It
further states that "If a landlord conducts his or her own screening of tenants,
then the landlord may charge his or her actual costs in obtaining the background
check, but the amount may not exceed the customary costs charged by a tenant
screening service in the general area."
Washington law also states...
Tenant screening
is a process used primarily by residential
landlords
and property managers to evaluate prospective tenants. The purpose of the tenant
screening process is to assess the likelihood the tenant will fulfill the terms
of the lease
or rental agreement. The process culminates in a
decision as to whether to approve the applicant, approve the applicant
conditionally (such as requiring an increased deposit or cosigner) or deny tenancy.
Title VIII of the
Civil Rights Act of 1968 (Fair Housing Act) prohibits discrimination in the
sale, rental and financing of dwellings based on race, color, religion, sex or
national origin. Title VIII was amended in...
The Washington State legislature recently passed (and forwarded to the governor for her signature) a bill (SB 6315/HB 2642) which amends the Residential Landlord-Tenant Act (RCW 59.18), imposing two new requirements on Washington landlords. The law is referred to as the "Fair Tenant Screening Act" and is effective June 7, 2012.
Specifically, Section 3 of RCW 59.18.257 is amended to read (in part) as follows:
"Prior to obtaining any information about a prospective tenant , the prospective landlord first notify the prospective tenant in writing, or by posting of:
What types of information will be accessed to conduct the tenant...
Section 615(a) of the Fair Credit
Reporting Act (FCRA) requires that "If any
person <such as a landlord> takes any
Adverse Action with respect to any
consumer <applicant> that is based in whole or in part on any information
contained in a consumer report, the person shall <provide notice of the Adverse
Action to the consumer>…."
Section 1100(f) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (Dodd-Frank) amends Section 615(a) of the
FCRA to require written or electronic disclosure of any numerical Credit Score
used by a person in taking adverse action based in whole or in part on...
How
to Run a Credit Check on a Prospective Tenant
Tenant screening
is a process used primarily by residential
landlords
and property managers to evaluate prospective
tenants. The purpose is to assess the likelihood the tenant will fulfill the
terms of the lease or rental agreement and
tenant credit checks are an important part of this evaluation process.
Credit
reports are a type of consumer report as defined and by the federal Fair Credit
Reporting Act (FCRA). The purchase and delivery of credit reports is tightly
regulated because of the sensitive nature of the information, as well as privacy
and identity theft concerns.
If...
Questions often arise regarding use of
ITIN's for tenant
screening background checks.
According to Internal Revenue
Service Publication 1915, "An ITIN (Individual Taxpayer Identification Number)
is a tax processing number, issued by the internal Revenue Service, for certain
resident and nonresident aliens, their spouses, and their dependents. It is a
nine-digit number beginning with the number “9”, has a range of numbers from
“70” to “88” for the fourth and fifth digits and is formatted like an SSN (i.e.
9XX-7X-XXXX)."
ITIN's are only available to
individuals who are required to have a taxpayer identification number for tax
purposes but who do not...
Verifying rental history
is an essential part of the
tenant screening process. Rental verifications
compliment credit and public records searches or background checks,
by:
Detecting eviction
activity that may not yet have found its way into public records data or
onto the credit report (as a civil judgment).
Revealing violations
of landlord rules and regulations that may not have risen to the level of an
eviction but are nevertheless important to you.
Providing you with a
more complete view of the kind of resident the applicant has been and is
likely to be.
Logically, recent problems
are most likely to go undetected...
Tenant screening criteria that denies tenancy for any criminal conviction, regardless
of the nature of the offense or when it occurred, increases the risk of
"disparate impact" discrimination claims against the landlord.
Disparate impact is a legal theory for proving unlawful
discrimination. Tenant screening criteria that has a greater statistical impact
on a protected class (race, national origin, etc.) is said to have a disparate
impact on that class. Once a member of a protected class proves that a
policy or practice has a disparate impact on the class, the burden is shifted to
employer or landlord (for example) to prove...
Under the negligent hiring theory, an injured
party (another employee, a resident or others) may bring an action against an
employer arguing that the employer failed to exercise reasonable care in
screening
prospective employees.
A recent judgment against the Charlotte (North Carolina)
Housing Authority establishes a similar precedent with regard to
tenant
screening - which
might be described as the negligent leasing theory. Under this negligent
leasing theory, an injured party (employee, another resident or others) may
bring an action against a landlord arguing that the landlord failed to exercise
sufficient care in conducting background checks on prospective tenants.
In this...
Full Tenant Screening Archive