Are you aware of what you should legally know about your tenants?
As a landlord, there are a series of things you should know legally about the renters applying to rent your place. If you’re an independent landlord and not working with property managers, then you need to take time to educate yourself about the Landlord Tenant Laws. These laws – including the Fair Housing Act – will guide you on how to screen the people who apply to live in your property.
So, what are some of the things you should know about prospective tenants?
1. You need to know who they are
First and foremost, during tenant screening, you are within your rights to ask to see government issued identification. This not only lets you know who you dealing with but gives you a place to start in the event that you need to take legal proceeding against the tenant. Run a check to ensure that the identification isn’t fake either.
2. You need to know their credit history
Before signing any lease agreements with a prospective tenant, you need to know their credit score. And this can be done by carrying out a credit check. Why is a credit check a good idea? It’ll help show you how this person treats their financial obligations. Bad credit shouldn’t automatically disqualify someone especially if they have shown proof of improving their credit score. However, it can be an indicator of a tenant who might default on monthly payments.
3. You need to contact previous landlords
Any tenant applying to rent in your place should provide you with references that you can follow up on. You are well within your legal right to ask for references. Someone without references should send warning bells ringing and so is someone who provides a fake reference. What are they trying to hide from you? Are they a tenant that might damage your property or disappear without notice? Tenant fraud is real so forewarned is forearmed.
4. You need to confirm the applicant’s salary
A tenant needs to be able to show that they can pay their monthly rent during the screening process. Legally, you are allowed to reach out to a tenant’s employee to enquire about this sensitive issue. This can be done via email or calling directly. If the tenant lied on their application and didn’t put the correct work phone number or email, this is a red flag.
5. You need to know the applicant’s criminal record
Carrying out a background criminal check will help you know the kind of person you are dealing with. You’ll want to know if they have a history of being violent, dealing drugs, are a sex offender, have traffic misdemeanors or other felonies. Is this person on Federal Watch Lists, OFAC (Terrorist) Watch Lists, or a part of the National Sex Offender Registry?
Save yourself the headaches
If you’re an investor who would rather someone else handles the screening of potential tenants then it’s a good idea to engage property managers. Such managers are well-versed in Landlord Tenant Laws and can provide you with the necessary property management and advice needed to get the best return from your investment.
Are you looking to rent out your property? Talk to one of our PMI Colorado advisors for more information on how we can facilitate the process and make it easier.