When you rent out part of your property, you want to ensure it will be in good hands. As such, many landlords will screen their tenants before allowing them to sign a lease. However, this process can be a bit more complicated than it seems. Many landlords understandably have questions when it’s time to screen their tenants. That’s why we’ve compiled the most common questions we get from landlords, as well as our answers.
Can you perform a credit report?
Performing a credit report on a prospective tenant is perfectly acceptable. This will give you a good idea of a tenant’s financial status and how responsible they are. To run a credit report, you will need their name, current address, and Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
However, if you turn down a potential tenant due to their credit report, you must send them an “adverse action” letter. This letter should include three things: (1) the reason for rejecting their application, (2) the name and address of the agency that provided the credit report, and (3) the potential tenant’s right to obtain a free copy of the credit report from that agency within 60 days.
What’s the best way to screen tenants?
An easy way to screen tenants is to have them fill out an application. This application should ask for specific information that will make it easier to screen them. This includes:
- Social Security number or Individual Taxpayer Identification Number
- Employment, income, and credit history
- Past evictions or bankruptcies
- References
- Past landlords
- Criminal history
Once you have all this information, you can use third-party agencies to run credit reports, verify employment history, and more. You can reject a tenant based on the information you find, so long as none of it is based on their race, religion, color, national origin, sex, disability, or familial status (see the Fair Housing Act).
Can you refuse to rent to someone who doesn’t have a Social Security number?
Getting a tenant’s SSN will allow you to gather the necessary information we discussed above. But what do you do if they don’t have one? Thankfully, you can ask for their Individual Taxpayer Identification Number (ITIN). Even people who don’t intend to stay in the U.S. permanently or who are here illegally can obtain one.
Screening tenants can bring up many legal questions. At Aaron Cox Law, we are here to help. As the premier real estate attorneys in Oakland County, we can help walk you through the screening process and more. Contact us today at 734-287-3664.