What is Rental Verification? How Can Landlords Get Around It

The rental verification process is done when a landlord or a property manager contacts a prospective tenant’s previous landlord or property manager to confirm the rental history listed on their rental application. Rental verification plays a vital role in protecting the landlord interests when screening applicants. It assesses the tenant’s responsibility and the likelihood of taking good care of the property. In this article, we will be talking about what is rental verification and how to verify a tenant’s rental history.

Key Takeaways:

• Landlords contact past landlords to confirm a tenant’s rental history, assessing their responsibility and protecting their property.
• Verification checks payment history, lease adherence, and overall behavior as a tenant.
• This process helps landlords make informed decisions, minimizing risk and fostering positive tenant relationships.

What is a Rental Verification?

Rental verification refers to confirming the details of an applicant’s rental history from the previous landlord, such as the duration of the tenancy, monthly rent payment history, any issues with the rental property or the tenant, and eligibility for re-rental.

Properly verifying a rental applicant’s background is a critical step for landlords. It provides insight into whether the individual will be a reliable tenant and is a key factor in the decision-making process.

Rental verification can include:

• Confirming the dates of tenancy and monthly rent amount
• Checking for any late or missed rent payments
• Assessing the condition of the rental property upon move-out
• Determining if there were any evictions or other issues during the tenancy

Why Does Rental History Verification Matter?

A recent survey by the National Multifamily Housing Council (NHMC) reported that over 93% of the respondents had received fake rental applications in the past 12 months. They also observed a 40.4% average yearly increase in fraudulent applications. Verifying rental history helps you confirm if the information provided by the tenant on the rental application form is accurate or not. If any information doesn’t match the rental history report, then you can address the case very carefully.

A tenant’s rental history report is a great resource that answers important questions regarding the tenant’s behaviors, payment history, how they treated other tenants and landlords in the past, and also how they escalated repair/maintenance issues. With this information and screening reports, you as a landlord can determine if the tenant is fit for your rental property or not.

Guidelines and Laws Regarding Rental Verification

While conducting rental application screening and verifications, you must adhere to various federal, state, and local laws and guidelines. Here are some of the major acts and regulations that apply:

Fair Housing Laws

The law prohibits discrimination against people of color, national origins, religions, sexes, and people with disabilities in all housing-related activities, including tenant screening. Therefore, ensure your rental verification processes treat all applicants equally and do not discriminate against protected groups.

Fair Credit Reporting Act

This act governs the utilization of consumer reports, particularly in the context of credit screening. You must comply with requirements such as disclosures, adverse action notices, and adherence to reasonable procedures.

Violence Against Women Act

As a result of this act, victims of domestic violence, sexual assault, dating violence, and stalking are protected from the effects of housing discrimination based on these factors.

Americans with Disabilities Act

During the screening of disabled applicants, this act mandates the provision of reasonable accommodations, such as allowing assistance animals as exceptions.

State/Local Housing Laws

Various state and city laws impose additional restrictions, necessitating thorough research into jurisdiction-specific regulations. For instance, some regions prohibit the consideration of arrest records not leading to convictions during screening. Being well-informed about local laws prevents you from legal penalties.

Benefits of Conducting Rental Verification for Landlords

The rental verification process involves gathering information about a tenant’s previous rental experiences, including payment history, lease agreements, eviction records, and overall reliability as a tenant. By verifying tenants’ rental history, you can minimize the risk of renting to potentially problematic tenants and ensure a harmonious landlord-tenant relationship. Here are some benefits of conducting proper rental verification for any landlord:

• Rental verification allows you to make informed decisions when selecting tenants. You can assess the tenant’s past rental history, adherence to lease terms, and overall reliability.
• Verification of an applicant’s rental history helps in reducing potential risks associated with problematic tenants.
• Tenant’s rental history plays a vital role in protecting your rental property. By reviewing their rental history, you can gauge their level of responsibility and determine if they are likely to take good care of your property.

Risks of Not Verifying Tenant Rental History

Failing to verify the tenant’s claims on their rental application removes an important screening step to evaluate an applicant’s reliability and suitability properly. It increases inherent risks to your rental property and interests. Here are some risks associated with not verifying tenant rental history:

• Previous evictions or unpaid rent could go undiscovered. Tenants with a history of eviction pose a higher risk of defaulting on rent payments or damaging the property.
• Tenants could provide inaccurate references. Without verifying the references, you have no way of knowing if positive references provided by the tenant are legitimate or fabricated. Dishonest tenants may try to obscure a poor rental history.
• Previous landlord complaints may not surface. Issues like noise violations, unauthorized pets, or property damage complaints from prior residences would not be uncovered without contacting past landlords.
• Incomplete landlord information. A tenant could potentially omit living situations from their application if they know the landlord would provide negative feedback. Verifying helps ensure the full rental history is disclosed.
• Higher turnover risk. Statistics show tenants without a verifiable positive rental history are more likely to vacate earlier in the lease term, resulting in turnover costs and lost rent for the landlord.
• If you fail to discover a tenant’s rental past, like documented aggression or illegal activity, it could lead to legal or safety problems.

How to Verify a Prospective Tenant’s Rental History? Step-By-Step Process

Verifying rental history is one of the most important components of the application screening process. It provides insight into how an applicant has behaved as a tenant in the past. There are mainly two ways to perform a prospective tenant’s rental verification. You can either contact the tenant’s landlord references directly by sending a rental verification letter or use property management software platforms to do it for you automatically. Here is the step-by-step rental verification process while protecting your investment property:

1. Application Form

Request all potential tenants to fill up a rental application form. This form should include sections like income details, employment history, personal information, and references from former landlords. Make sure you notify the tenants to provide comprehensive and accurate information.

2. Contact References

Once the prospective tenants complete the application form, make sure that you contact the references provided. Reach out to the previous landlords to verify the accuracy of the information, also inquire about the tenant’s payment history and overall tenancy experience. Landlord’s reference is very crucial information to assess the tenant’s reliability and responsibility.

3. Employment Verification

Confirm the potential tenant’s employment status and income stability. Request relevant documentation such as employment letters, pay stubs, or bank statements to validate their financial capability to meet rental obligations. Also, learn whether landlords can ask for bank statements for a rental application.

4. Credit Check

Conducting a credit check provides valuable insights into a potential tenant’s financial responsibility. The credit check helps to determine whether they have a history of paying their bills and debts on time. There are many credit reporting agencies that offer tenant screening services that allow landlords to access credit reports and evaluate tenants’ creditworthiness.

5. Eviction Records Search

Eviction records help to identify tenants who have been previously evicted or involved in legal disputes with landlords. You can use online databases or screening services to search for any eviction history associated with the prospective tenant.

6. Personal Interview

Arrange a face-to-face or phone interview with the prospective tenant to check their communication skills, professionalism, and overall attitude. It provides you gain additional insights into their suitability as a tenant.

7. Approval or Rejection

After verifying and evaluating, decide whether to approve or reject the rental application. Be sure to follow fair housing rules and evaluate each applicant equally and fairly.”

8. Security Deposit

Request a security deposit from the tenant, which is your financial protection. That security deposit helps you cover potential damages occured to your property or any unpaid rent in case of default.

What If Your Tenant’s Previous Landlord Doesn’t Respond?

It’s not uncommon for previous landlords to be unresponsive to rental verification requests. This can slow down your screening process, but it doesn’t have to stop it completely. There are still several ways you can gather the information you need to make a confident decision:

• Ask for Additional References: If you can’t reach the previous landlord, ask the applicant to provide alternative references. This includes a former employer, current supervisor, or even personal character references. These sources can offer valuable insights into the applicant’s reliability and responsibility.
• Request Proof of Rent Payments: Another way is to ask the applicant for documentation that shows their rental payment history. Bank statements, canceled checks, or rent receipts can help verify whether they’ve consistently paid on time.
• Check Their Credit Report: A detailed credit report can reveal important red flags, such as past evictions, late payments, or rent-related debts. This is a reliable way to assess whether the applicant has a history of financial responsibility when it comes to paying rent.”

Questions to Ask in a Rental Verification Form

When drafting a rental verification form, it’s important to include relevant questions that will help you get comprehensive information on a potential tenant’s rental history. Here are some essential questions to ask in a rental verification form:

Tenant Basic Information:

• Full Name
• Current contact information (phone number, email address)
• Current address

Previous Rental History:

• Previous addresses (with dates of tenancy)
• Reason for leaving each previous rental
• Names and contact information of previous landlords or property managers

Rent Payment History:

• Did the tenant consistently pay rent on time?
• Were they are instances of late/missed payments?
• Were there any rent payment disputes/issues?

Lease Compliance:

• Did the tenant comply with the terms and conditions of the lease agreement?
• Were there any lease violations or breaches?

Property Maintenance:

• Did the tenant maintain the property in good condition?
• Were there any instances of property damage due to tenant negligence?
• Did the tenant report maintenance issues promptly?

Communication and Behaviour:

• Was the tenant responsive to communication with the landlord or the property manager?
• Did the tenant demonstrate respectful and considerate behavior towards neighbors or other residents?
• Were there any complaints or issues related to noise, disturbance, or improper behavior?

Eviction History:

• Has the tenant ever been evicted before?
• Were there any legal disputes or court actions related to the tenant’s previous rentals?

Recommendation:

• Would you recommend this tenant to other landlords or property managers?
• Any additional comments or information about the tenant’s rental history?

Download the Rental Verification Checklist

[Also Read: Questions To Ask Tenant’s References While Renting Property]

What If a Tenant Doesn’t Have a Rental History?

There may be some reasons that a prospective tenant doesn’t have any rental history. For eg, they may be new in the area, a student who has recently moved out for education, first-time renters, or might have been living in a hotel or other temporary accommodation. If a tenant doesn’t have a rental history then it can present a challenge during the screening process. However, there are alternative approaches that can help you evaluate potential tenants without prior rental history. Here are some of them:

1. Employment and Income Verification

Request employment verification documents such as employment letters, pay stubs, or bank statements. By evaluating their income and employment history, you can gain insights into their financial capability and payment consistency.

2. Personal References

Request personal references who can vouch for the tenant’s character and reliability. These references can include employers, coworkers, or trusted acquaintances. Personal references can provide insights into the tenant’s responsibility and integrity.

3. Background and Credit Checks

Conduct a background check on the tenant which includes a background check, credit check, and other relevant screenings. Despite the absence of a rental history, a tenant’s clean background and positive credit history can serve as strong indicators of their reliability and financial responsibility.

4. Co-signer or Guarantor

A co-signer is a third party who agrees to be responsible for the rent payments and any other obligations if the tenant defaults. If the tenant lacks a rental history or has a limited credit history, consider requesting a co-signer or a guarantor. This provides you an extra layer of financial security.

5. Increased Security Deposit

If the tenant doesn’t have a rental history, you may want to request a higher security deposit. A larger deposit can help lower the risk and provide additional financial protection in case of potential damages or nonpayment of rent.

6. Personal Interview

Conduct a personal interview with the tenant to assess their character, communication skills, and ability to meet your expectations as a landlord. This interaction provides valuable insights into their suitability.

[Also Read: Valid Reasons to Deny Rental Application]

Conclusion

Verifying an applicant’s rental history safeguards you from potential rent arrears and property damage. However, you must comply with fair housing regulations and treat all applicants fairly. You should request rental history from all the applicants if you ask for one applicant. There shouldn’t be any case of discrimination or bias during the screening process. OKC Home Realty Services conducts the screening process very thoroughly to ensure that you get the best tenant for renting out. We ensure profit from your rental property and less vacancy time. Contact us for property management needs.

Rental Verification Process FAQs