Contemporary Information Corp (CIC) is committed to providing property owners with accurate, actionable information that informs rental decisions. One of the core mandates of many of Contemporary Information Corp’s clients is safeguarding properties without winding up in litigation. This requires a carefully vetted screening process that is 100 percent compliant with federal and state ordinances and statues, such as the Fair Housing Act (FHA).
The benefits of a proper screening process is that tenants who are ultimately approved tend to be long-term and hassle-free, and offer a stable, ongoing income. Unnecessary cleaning and repair costs are avoided, as are the substantial costs of a turnover, which can be as much as a month’s rent for each vacated unit. Frequent tenant changes also add to legal complexities and administrative burdens and increase the possibilities of protracted court cases.
At the foundation of reliable, criteria-based screening is comprehensive checks on elements of an applicant’s background such as reference quality and employment stability. This requires consistent cross-referencing, with landlords making sure that every applicant detail is correct and verifiable. It includes checking previous addresses, Social Security numbers, date of birth, and even name spelling on the tenant screening report and application. Descriptors found on offender registry records should be always be cross-referenced with the individual applying, and middle names should always be included on the tenant screening report.
Another screening essential is avoiding applying inconsistent screening criteria. Should potential tenants discover any subjectivity in the selection process, discrimination claims may arise. These often have repercussions extending to landlords, managers, and investors. This makes it essential to have a standardized checklist that applies to all tenants, without regard to disability, ethnicity, or sexual orientation. If tenants don’t meet the stated criteria, the reason behind the rejection must be transparent and defensible.
As a corollary to this, the screening process should never be rushed. Should red flags emerge, it’s important to carefully consider them within the context of the entire application. Warning signs that often indicate inability to commit to a rental agreement over the long term include past evictions and a fragmented employment background. Document and reference verification are critical in ensuring all provided material is accurate and relevant, and that negative aspects of the tenant’s background don’t slip through that might cause major headaches further down the road.
Not all of the process is reactive and focused on ensuring that worst-case scenarios don’t emerge. While ensuring tenants have a stable financial history and are consistently able to pay rent is a major part of the equation, this does not prevent tenants from moving out for a variety of reasons. Thus, another key element is building positive, trust-based relationships with those who are potential or existing tenants.
Effective strategies include competitive pricing and undertaking in-depth market research on similar rentals in one’s market and establishing baseline fair rates, based on pricing trends and documented transactions. With this information in hand, one can set pricing that is reasonable and attracts quality tenants for the long term. It’s also worth considering tactics such as renewal discounts and forgoing permitted rent increases as a way of encouraging stable, long-term tenant stays.
