Establishing Tenant Screening Criteria For Rating Tenants
This is part 3 of our Landlord’s guide to Tenant Screening. If you’ve landed here directly, don’t worry — we cover tenant screening criteria in-depth below.
Your tenant screening criteria protect you
A tenant screening criteria will help you do the following:
Your criteria act as the answer key…
… and unlike a regular test you can share it with your applicants before they apply.
This will tell them upfront what your standards are and a thorough background check will show you if they pass or fail.
Is it more work to set up your criteria?
… yes… but it’s also easier to grade applicants once you have a criteria in place for your rental.
How To Use A Tenant Screening Criteria To Defend A Discrimination Claim
We covered the FHA in chapter two of this tenant screening guide.
The FHA is regulated by HUD, and it’s pretty easy to submit a discrimination claim with them.
It’s just a Google search and an online form. It would take a motivated applicant less than four minutes to find and fill out.
HUD will take a look at the claim and may reach out if it seems serious.
The claim might be something like the following, “I feel I was denied because”:
- I have kids
- of my religious beliefs
- of my race
- of my sexual orientation
Now that’s a scary phone call and here’s why:
When Do I Share My Screening Criteria With Renters?
Eric Worral works at RentPrep and thinks all food falls under the category of finger foods (Class C property if he’s generous).
When it comes to dating… George Clooney could ask for Marriage after the first date and still not scare away swooning fans.
Eric Worral would have to play it cool.
Breaking Down The Rental Criteria Form (Tenant Screening Criteria)
In the sections below we will break down each aspect of your new form.
We will discuss why it’s important and what you should be aware of. This is important, so you understand how to stay in compliance with your laws.
As a reminder, make sure you read and understand your state and local laws. For instance, in Texas, you’re legally required to present your criteria to applicants during the application process, and you must get a signature showing they saw it.
Providing Property Information
We start by entering property information because you should have a tenant screening criteria specific to each rental property.
You might have one Class A property with different criteria compared to a Class C property.
If you want the same criteria for all of your rentals, that’s fine. Just make one criteria and swap out the address section of your document.
Landlords should include the address of the rental property, and the name of the landlord or property management company needs to be clearly stated.
Provide initial details about the rental property on the tenant screening criteria document. This way, if applicants discover something that they don’t want or need a place to live, they can remove themselves from consideration right away.
You may have already mentioned your stance on smoking several times, but your criteria is another mention that might check someone off your list.
If animals and smoking are not allowed, it should clearly state so.
If animals or smoking are allowed, the document should state the details of what is allowed.
For example, an animal policy might include how many, what size, restricted breeds and anything about a pet deposit.
If the prospective applicant is not immediately in line with any of this property information, they will not even fill out the rest of the application. This self-selection will save both parties a lot of time and effort.
Note: Most refer to it as a “pet policy,” but after recording this podcast on ESAs, we’ve adjusted the language to an “animal policy.” Please give that podcast a listen if you’re unfamiliar with the laws surrounding service animals and emotional support animals.
Rental History Criteria
We all have that friend…
… the one that you add 15 minutes to whatever time they tell you they will show up at.
Many landlords have a similar experience with that “one” renter.
They were always late on rent or had issues in the rental.
Lucky for you… landlords can use rental history as one of their tenant screening criteria.
There is perhaps a no better way to discover what kind of tenant an applicant will be than by looking at what type of tenant they’ve been in the past.
The most telling piece of information discovered during screening is whether an applicant has been evicted. Eviction is the legal action of expelling someone from a property.
There are specific steps that landlords must take to carry out an eviction, and the result is a hearing at court. The eviction becomes part of the public record; therefore, a background check will reveal any made against the applicant.
Part of the tenant screening process includes talking to an applicant’s previous landlords.
These landlords can reveal plenty of rent-related information about an applicant:
- Number of late rent payments
- Complaints about the tenant
- Did the applicant ever break the lease agreement
- Did they have to deduct and damages from their security deposit
Here’s a mock phone conversation where our CEO Stephen White shows you what to ask when calling a previous landlord.