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Credit Reports | Other Screening Services | Megan's Law | Rental History | Income | Other | Once Selected |
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1. Application Fees |
The law limits application fees to no more than $30 per
applicant.
The law also states that you can only keep the portion of an application fee that covers your actual costs for credit reports, office/staff time to verify information and so on. And lastly, you have to give the applicant a receipt itemizing the way his or her application fee was used. For example: when we receive an application, we run the credit reports first. If we can tell at that point that we will not approve the applicant, we decline them and refund their entire application fee except for $9 for the credit report and $10 office time to run it and analyze it. If we go through the full investigation process with an applicant, our actual costs always exceed the maximum allowable application fee of $30. These new laws were created because of unscrupulous landlords that made application fees a profit center. They would charge application fees to 10 or more applicants where they only had one rental available. Then they would choose the one they investigated and keep everyone else's application fee. |
2. Credit Reports and
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A credit report tells you volumes about a person's character when
it comes to keeping their financial commitments. It is a bad business decision
to accept "nice" people with bad credit. If the credit report reflects too
many problems, decline the applicant. See:
DECLINING AN APPLICANT
Be sure to check the following when you receive the credit report:
1. Do the social security number and driver's license numbers match
on the credit report match up with the numbers on the
application? When everything else about an applicant is positive, we sometimes approve them with one or more of the following credit blemishes if there is a reasonable explanation: 1. Medical collections 2. Paid collections 3. Credit problems that are 5 years old or more (where new, good credit has been established) 4. Defaulted student loans People that have not paid their phone or power bills create an unacceptable risk – and of course, the black kiss of death is a collection from a property manager / landlord. |
3. Other screening services |
You can also subscribe to services that will check any name against a database that will tell you if that person has ever been evicted in your state. We use Landlord Protection at 916/685-7556. |
| 4. Megan's Law notice | Notice: The California Department of Justice, sheriff's departments, police departments: serving jurisdictions of 200,000 or more and many other local law enforcement authorities maintain for public access a data base of the locations of persons required to register pursuant to paragraph (1) of subdivision (a) of Section 290.4 of the Penal Code. The data base is updated on a quarterly basis and a source of information about the presence of these individuals in any neighborhood. The Department of Justice also maintains a Sex Offender Identification Line through which inquiries about individuals may be made. This is a "900" telephone service. Callers must have specific information about individuals they are checking. Information regarding neighborhoods is not available through the "900" telephone service. NOTE: This notice must be in your Rental/Lease agreement |
5. Checking RENTAL history
IMPORTANT!! |
This is one of the most important steps in the screening process. Some people with good credit are still miserable renters.We ask these questions of every landlord reference. The answer to any one of these questions could be the key to avoiding a bad tenant:
The current landlord may want the tenant to move out and thus, give them a glowing reference. It is imperative that you call the prior landlord and ask them the same questions as you asked the current landlord (if less than three years). |
6. Verifying income |
One of the best ways to verify income is with a pay
stub that shows the YTD (year to date). Be sure the Social Security number
on the pay stub matches. Even when a applicant provides a pay stub with a
YTD, call their place of employment to insure that they are past any probation
period and that there job is secure. This is also a good time to get a feel
for the character reference for the tenant.
If the tenant is self-employed, be sure to verify his/her income with 3 months of bank statements or tax returns for the past 2 years. Phone verifications from self-employed are very suspect because the owner, or someone that works for him/her, will be providing the information to you. |
7. Visit applicants current residence |
After we've gone through all the rest of the screening process,
we often drop-in on the applicant unannounced to see how they take
care of their current home. That gives us the last bit of reassurance that
we need to make the big decision to go ahead and rent to the applicant or
not. Over several years, we have decided not to rent to several people at
the point of the final drive by. Either the yard looked terrible, the house
was a mess, or cars were parked on the lawn.
When we show up at their door, we typically say something like, "Mr. & Mrs. Applicant, I'm real sorry to just drop in on you like this, but the owners of the property you would like to rent have a lot of pride in their home and they would like to know how you take care of your current home. Do you mind if I tell them before I make the final decision to rent to you?" That's a gutsy thing to do and grant it, we've made a few people mad. But they are invariably people we would not have wanted to rent to anyway. |
Credit Reports | Other Screening Services | Megan's Law | Rental History | Income | Other | Once Selected
ONCE AN APPLICANT IS SELECTED
It is our policy to call the owner and verify the approval of the tenant, and the terms of the Rental Agreement, before we call the tenant.
Call the tenant and tell them they are approved. Further explain that it is policy to continue marketing and attempting to rent the property until the applicant signs the Rental Agreement and puts up money. We collect at least $500 or the amount that the rent would be from the time the tenant signs the Rental Agreement until the rent starts running.
We collect all funds due prior to possession in the form of a cashiers check or certified check (personal checks can bounce or be stopped – even a money order can be stopped). We typically charge the first month's rent and a security deposit a little larger than the rent (assuming the tenant has perfect credit and no pets).
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