The newly passed rental laws, dubbed the “Tenant Protection Laws of 2019,” have changed the way landlords do business. One area you may have read bans the use of the “tenant blacklist.” While there is no actual “list”, the “blacklist” is a name commonly used in reference to tenants who have evictions or previous housing court history on their record. The most notable changes to the law as it relates to screening potential applicants are:
- Bans the use of the blacklist or refusing to rent to applicants because they have an eviction on their record.
- Caps the total amount you can charge for credit & background checks at $20 (twenty dollars).
- Mandates that in the event an applicant brings you a credit report that is less than 30 days old, you are not allowed to charge the tenant to run another credit check. You may still pull your own report, at your own expense.
The net impact on landlords seeking new tenants is that the law limits the fees charged and the information that may be used in evaluating an applicant for tenancy. With the passage of this new law, landlords may want to revisit their tenant screening process to ensure that their process provides the best screening within compliance.
Take a closer look at financial data
With the elimination of the “blacklist” (court history of evictions), the financial data (including credit reports) become even more important. In reviewing one’s application process, its advisable to request a broader set of financial documentation as part of the application.
Some supporting financial documents to consider are:
- Two (or more) month’s complete bank statements
- A valid State ID (Driver’s license, Passport, or State issued ID)
- Two (or more) pay-stubs
- Previous year (signed) Federal tax return
- Letter of employment
- Previous Landlord reference letter with contact information
- Proof of additional income sources
Be a Financial Detective
With the financial documents provided by the applicant, it's important to look at the details in the rental application as well as these documents to scope out any discrepancies.
A couple of examples to consider:
- Cross reference pay-stubs with deposit amounts on the provided bank statements
- Validate name(s) of depositors to ensure that employment information is accurate
- Explore the bank statements to see when their CURRENT rent payments are posting to ensure the rent is being paid on time
- Perform landlord and employer verification(s)
Calling current/previous landlords can help fill in the blanks about an applicant’s demeanor as a tenant. Some useful questions include:
- Did they pay their rent on time?
- Did you have any problems or complaints with this tenant?
- Most of all - Would you rent to them again?
Finally, whether you collect the credit screen as part of the initial application OR after a pre-screen, be sure to consider the applicant’s ability to pay the rent.
Online Applications Can Help
The new laws are certainly an adjustment to the way that landlords are doing business. Online application providers like Rent Application can help support your new application and tenant screening workflow. Rent App’s credit report cost less than $20. Additionally, Rent Application allows the landlord to seek additional report types including criminal, employer and landlord verifications. While the new law places these costs on the landlord, these reports can be requested at a later stage in your screening process - as needed.
Set up a free account today to see if Rent Application can help you in your search for high quality tenants!