As owner of a background check company, I’ve conducted tenant screenings for years and seen lots of bizarre things, but one incident takes top prize.
In June 2013, I spoke with a newly minted property manager in California, who was so eager to rent a unit THAT he didn’t verify a prospective tenant’s information. The application, it turned out, was full of falsehoods.
What the candidate didn’t want this young property manager to know is that he ran a meth lab. The applicant moved in, eventually his operation was discovered, and the police arrested him.
The cost to repair the unit? More than $10,000.
What Do Toxic Rental Applicants Lie About?
Drug manufacturing is just one of countless secrets prospective tenants may be hiding. Certainly most candidates won’t be the second coming of Walter White; but inevitably, you will face people who go to great lengths to hide the details of their lives so they can plant their roots into your property and twist them into knots until your place is a garden of misery.
So, which symptoms of disaster do the pros conducting background checks and tenant screenings look for? The list is large and always growing, but I’ve narrowed it down to several categories of secrets that bad tenant applicants look to hide:
- Criminal history: Look out for crimes against people, such as armed robbery, assault, and rape; and also crimes against property, like burglary, vandalism, auto theft, and arson.
- Drug-making, trafficking, or dealing
- Sexual predator, pedophile, or offender status
- Credit problems: Not just credit scores, but also whether the applicant has been foreclosed or evicted from other apartments, been sued for non-payment, or had wages garnished.
- Civil violations: These include small claims court cases, other lawsuits, and restraining orders.
- No income: Make sure to verify that the company an applicant works for exists and that they’re a current employee.
- Renter history: Call previous landlords to find out whether a tenant paid their rent on time, got along with neighbors, followed the rules, and left the apartment in good condition.
- Number of tenants who will be living in the unit
- Exotic pets: Many animals are illegal to own, breed, and sell, such as some species of snakes, spiders, lizards, and birds.
What Are Prospective Tenants’ Trickiest Tricks?
Identity theft, for one, is rampant. Renters who wants to falsify their applications have numerous resources at their disposal, and new schemes are popping up all the time. The Bureau of Justice Statistics (BJS) estimates that more than 15 million Americans’ identities are stolen each year.
The Federal Bureau of Investigation refers to stolen identity as “a powerful cloak of anonymity for criminals and terrorists.” Stealing an identity is an easy crime to commit, and because some criminals are high-tech wizards, detecting and prosecuting them can be very difficult.
Borrowing identities from family and friends without criminal records or bad credit histories is another common way prospective tenants try to pull the wool over property manager or landlord’s eyes. Candidates borrow photo IDs from people with “clean identities” and then find a forger to create a new photo ID, which combines the applicant’s picture with the credentials of the “clean” family member or friend.
Often applicants take their plans a step further, bringing the “clean” person’s birth certificate and a utility bill down to the Department of Motor Vehicles to get a state photo ID. Nothing new, but people are still getting away with it.
Of course, some renters simply lie on their applications, hoping you’ll be like the young property manager from California who didn’t thoroughly check the meth chemist’s background.
And it’s not uncommon for applicants to reply “no” to the “have you ever been arrested for a felony” question on the application, and only later do you find out they sport a rap sheet that would make Bonnie and Clyde blush.
How Do You Spot the Next “Bad” Tenant?
Well, there are some proven ways to detect potential problems. Many experienced property managers have developed a “sixth sense” about people and, based on that experience, can easily detect when a prospective tenant is hiding something.
As you interview the applicants and show your property, notice how they act. What does their body language show you? Are they in a hurry? Do they appear anxious to get the lease signed immediately?
Some red flags include when applicants object to signing the consent form for a background check, question the need for the check, or don’t want to pay for the tenant screening. You have to think, “What are they hiding?”
To uncover the truth, nothing beats a detailed background check. I recommend outsourcing to a consumer reporting agency (CRA) that’s compliant with the Fair Credit Reporting Act (FCRA). Originally enacted in 1970 and amended many times since, the FCRA improves the accuracy of background checks while protecting the civil rights of all parties.
The FCRA requires an informed consent form signed by the applicant before a background check is initiated. (This is a great opportunity to notice how the applicant reacts when signing the consent). If the application is denied completely or partly based on the results of the background check, the FCRA will provide a letter of adverse action advising the applicant of his or her rights.
Your CRA should verify an applicant’s personal information, and also important is a hands-on, circuit-and-county-court search to get the latest information. Simply entering personal information into a database and clicking “enter” won’t cut it.
For example, did you know that “no record” doesn’t necessarily mean the applicant has no criminal or civil record? It could mean the applicant has provided false or incorrect personal information. The message you want to see is “no criminal record.”
Most renters are honest, law-abiding citizens. But inevitably, the shadow of a prospective tenant hiding unsavory secrets will darken your doorstep. Keeping your eyes open for the warning signs and screen all your tenants properly, and TV producers won’t ask if it’s okay to use your property to the shoot episodes of Breaking Bad.
Do you have any tips for spotting potentially toxic tenants? Add a comment, and let us know!Read more on Resident Management