Tenant Screening Red Flags
Tenant Screening Red Flags
Knowledgeable landlords who conduct tenant screening understand that the objective in running tenant background screening reports is to identify information about their rental applicants that are red flags. These warning signs or “red flags” that indicate elevated risk and should not be ignored.
One of the most obvious red flags is current or past tenant evictions, also known as an unlawful detainer. Anytime a tenant must be forcefully removed from a property, it sends a strong message that demonstrates that the prospective tenant is not trustworthy and unreliable at meeting their obligations. Applicants with unlawful detainers should be rejected in virtually all cases.
CIVIL MONEY JUDGMENTS
Money judgments found in the tenant screening process are also problematic because the creditor obtained a court order (judgment) to establish the debt for which collection may be enforced by the county sheriff, if a state court judgment, or the U.S. Marshall, if a federal judgment. Unfortunately, most judgments are not enforceable due to the fact that the debtors don’t have the assets to satisfy the judgments or they go to great lengths to hide their assets in order to avoid paying the creditor. Rental applicants with a history of judgments are major red flags that cannot be ignored. Statistically, those with a history of judgments tend to be extremely high risk candidates as tenants.
DELINQUENT COLLECTION ACCOUNTS FOUND IN THE RENTER’S CREDIT REPORT
Far more important than any credit score is the track record for paying credits. Any individual that has a blemished record and collection history should be characterized as undependable. Most often, these type of applicants will most likely be problematic tenants and will frustrate you with the lack of timely payments and even default.
CRIMINAL HISTORY FROM A NATIONAL SEARCH IN A TENANT BACKGROUND CHECK
The rental applicant with serious criminal convictions posses multiple issues. Not only could this individual pose a much higher financial risk to the landlord, but also a physical threat. It also goes without saying that any convicted sex offender may expose you to significant other liabilities that is prudent to avoid altogether. On the other hand, minor criminal offenses such as speeding tickets are really not an issue unless the record shows an extremely excessive record that should raise cause for concern that this individual has a problem with exercising good judgment.
REFUSAL TO COMPLETE THE ENTIRE RENTAL APPLICATION
Beware of any prospective tenant who refuses to complete your entire rental application. Leaving key requested items of data blank is often a sign that your applicant has something to hide. Insist that your applicant provides you with complete information.
TENANT APPLICANT OFFERS AN INCORRECT SOCIAL SECURITY NUMBER
Most rental applicants realize that the trick of providing a false SSN will only work if the landlord doesn’t engage in tenant verification. And some incorrect SSN’s are offered by unintentionally. However, there are still a few applicants who believe that they have nothing to lose by providing a false SSN in hope that they landlord doesn’t do tenant screening. Another trick that some use is to reverse 2 of the digits (typically one of the last four) and then blame it upon an inadvertent or innocent mistake. Yet, there really are honest mistakes that do occur occasionally.
EXCESSIVE ADDRESS HISTORY “JUMPING AROUND FROM PLACE TO PLACE”
Most landlords find it undesirable to deal with tenants who stay for short period of time or dealing with broken leases. Anyone with a long history of not staying in anyone location for a reasonable amount of time most often spells trouble if you are seeking a longer term tenant. Our tenant screening report will provide a detailed account of exactly when and where your rental applicant has been living (and who they have been living with). This data is not only current, but it also can go back into history as far as 30+ years. Most landlord tenant screening reports do not contain this kind of detailed information.
STATE AND IRS TAX LIENS COULD MEAN YOUR RENTAL APPLICANT IS UNDER LEVY
Unpaid taxes that result in tax liens are especially problematic because it may be an indication of an illiquid financial condition. Once a tax debt has gotten to the point in which the IRS or state has has to enter a lien, it means that no other collection enforcement methods have been successful at resolving the debt. We always advise that if you are making decisions based upon tax liens, you should request documentation from your applicant to show the current status of the account. There are cases where a tax lien may have been satisfied, and yet the lien has not yet been removed by the taxing authority or the county recorder is behind in updating the record.
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