Landlord’s Legal Center
Franco Simone, Esq.
1660 Hotel Circle North, Suite 610
San Diego, CA 92108
(619) 235-6180 Telephon...
Screening Applicants
 Purpose:
The primary goal of the screening process is to find a
desirable tenant, typically a stab...
Landlord May Use These Factors
Credit Standing
Employment history
Amount (not source) of income
Rental History
Past b...
What Steps Should I Take To Screen
Applicants
Rental Application
Verifying Information on Rental
Application
Credit Rep...
GOAL OF RENTAL APPLICATION
Is to obtain information about an Applicant to determine if that
person will be a stable, resp...
Written Rental Applications
What NOT to Ask:
It is illegal for the Landlord to ask Tenant questions
about race, color, re...
Exceptions
LL can’t discriminate because of source of income BUT
can ask Tenant’s source of income and the level of incom...
RED FLAGS ON APPLICATIONS
Incomplete application
Tenant wants to move in quickly
Check ID with name on application-Get ...
Verify Application Information!!!
 Contact all persons or firms named as
references, former landlords, or employers
and
...
BAD EXCUSES NOT TO VERIFY INFO
“They seemed like nice people.”
“I didn’t have time.”
“They were referred to me by a fri...
Verifying Information
Income-Pay stubs, 1099s, award letters, call employer
Personal ID-Drivers Lis., Passport, green ca...
Credit Report
LL can charge up to $49.50 in an Application fee to
apply to actual out of pocket costs to cover credit
rep...
Who Provides the Credit Report?
 Even though you may do so, do
NOT accept the tenant’s copy of
his/her credit report.
Credit Scores-An Overview
The highest possible credit score under the FICO
system is 850.
Any score between 850 and 720 ...
Reading a Credit Report
Part 2
Part 3
Part 4
Part 5
Part 6
Part 7
Part 8
Fair Credit Reporting Act (FCRA)
What a Landlord Needs To Know:
If you are a LL or management company who uses
“consumer...
What If I Don’t Follow FCRA?
Applicant can sue in Federal court for damages,
attorney’s fees and court costs.
If deliber...
What is a Consumer Report?
Credit Reports
Tenant-Screening Service-rental history
Reference-Checking Service
What Actions Are Covered?
Depends on who is verifying the
references?
If by an Agency hired by LL------ COVERED
If by ...
What is an Adverse Action?
Any action taken by the LL or management
company that is unfavorable to the interests
of a ren...
What Does This All Mean?
If you use a consumer report issued
by an agency you hired and that report
causes you to take an...
When is a Notice Required?
Take the Case of……
1. Further investigation
2. Consumer report part of the decision
3. Incr...
What Information Must Be Included In a Notice?
Name, address and telephone number of the Agency
which issued the report.
...
Some Legal Protection
If LL inadvertently fails to provide a required Notice
in an isolated case, then LL has some protec...
Final Thoughts
Be consistent in the Application Process:
Use same rental application
Always pull a credit report
Always...
Screen criteria should relate to legitimate LL
objectives
No Subjective Criteria-long hair, smells bad
More Final Though...
QUESTIONS
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How to screen your prospective tenants properly 2013

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How to screen your prospective tenants properly 2013

  1. 1. Landlord’s Legal Center Franco Simone, Esq. 1660 Hotel Circle North, Suite 610 San Diego, CA 92108 (619) 235-6180 Telephone (619) 235-6392 Facsimile www.landlordslegalcenter.com
  2. 2. Screening Applicants  Purpose: The primary goal of the screening process is to find a desirable tenant, typically a stable occupant who is a good credit risk and will not damage the premises or disturb other tenants. IN OTHER WORDS— TO AVOID BAD TENANTS WHICH CAN COST YOU $$$$$$$$$$$$  Damage to your unit  Eviction fees and attorney’s fees
  3. 3. Landlord May Use These Factors Credit Standing Employment history Amount (not source) of income Rental History Past bad conduct relevant to reasonable belief applicant may be direct threat to health or safety of current tenants/neighbors
  4. 4. What Steps Should I Take To Screen Applicants Rental Application Verifying Information on Rental Application Credit Report
  5. 5. GOAL OF RENTAL APPLICATION Is to obtain information about an Applicant to determine if that person will be a stable, responsible individual who will have the ability to pay the rent. (See Form #1-Rental Application) The application should contain the applicant's express written authorization for the landlord 1) to contact all persons or firms named as references, former landlords, or employers; 2) to verify the contents of the application, including obtaining a credit report on the applicant; 3) A written application must be signed by the applicant before a landlord can obtain a credit check.
  6. 6. Written Rental Applications What NOT to Ask: It is illegal for the Landlord to ask Tenant questions about race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, age, medical condition, victim of domestic violence or whether you have persons under the age of 18 living in your household. LL can’t ask about immigration or citizenship status.
  7. 7. Exceptions LL can’t discriminate because of source of income BUT can ask Tenant’s source of income and the level of income Tenant asks for an “accommodation”-Proof of Disability For housing limited to persons of one sex who will share living areas in a single dwelling unit LL can limit the number of persons per unit-however….. Section 8
  8. 8. RED FLAGS ON APPLICATIONS Incomplete application Tenant wants to move in quickly Check ID with name on application-Get copy of ID Make sure name matches Social Security number IF employer sounds fishy try calling through separate telephone number you obtain on your own Get an application from any one over 18 years of age
  9. 9. Verify Application Information!!!  Contact all persons or firms named as references, former landlords, or employers and Verify the contents of the application, including obtaining a credit report on the applicant.
  10. 10. BAD EXCUSES NOT TO VERIFY INFO “They seemed like nice people.” “I didn’t have time.” “They were referred to me by a friend/Pastor/family member.” “I really enjoy the eviction process.”
  11. 11. Verifying Information Income-Pay stubs, 1099s, award letters, call employer Personal ID-Drivers Lis., Passport, green card Past residences-Send a letter/Call past Landlords Pull a Credit Report to compare with the information on the Application
  12. 12. Credit Report LL can charge up to $49.50 in an Application fee to apply to actual out of pocket costs to cover credit report and checking personal references. (2012) Three credit bureaus: Equifax, Trans Union and Experian
  13. 13. Who Provides the Credit Report?  Even though you may do so, do NOT accept the tenant’s copy of his/her credit report.
  14. 14. Credit Scores-An Overview The highest possible credit score under the FICO system is 850. Any score between 850 and 720 is considered to be excellent. Scores between 719 and 600 still qualify for credit. Scores between 599-300 high-risk
  15. 15. Reading a Credit Report
  16. 16. Part 2
  17. 17. Part 3
  18. 18. Part 4
  19. 19. Part 5
  20. 20. Part 6
  21. 21. Part 7
  22. 22. Part 8
  23. 23. Fair Credit Reporting Act (FCRA) What a Landlord Needs To Know: If you are a LL or management company who uses “consumer reports” to evaluate rental applications your need to follow FCRA FCRA designed to protect the privacy of consumer reports information and guarantee that the information is correct.
  24. 24. What If I Don’t Follow FCRA? Applicant can sue in Federal court for damages, attorney’s fees and court costs. If deliberate…..punitive damages Federal Trade Commission or the states may sue LL for non-compliance and get civil penalties.
  25. 25. What is a Consumer Report? Credit Reports Tenant-Screening Service-rental history Reference-Checking Service
  26. 26. What Actions Are Covered? Depends on who is verifying the references? If by an Agency hired by LL------ COVERED If by LL’s employees------ NOT COVERED
  27. 27. What is an Adverse Action? Any action taken by the LL or management company that is unfavorable to the interests of a rental applicant is covered by the FCRA For example: Denying applications, requiring a co-signor or requiring an additional deposit.
  28. 28. What Does This All Mean? If you use a consumer report issued by an agency you hired and that report causes you to take an adverse action against a rental applicant the YOU MUST give the applicant notice that this occurred.
  29. 29. When is a Notice Required? Take the Case of…… 1. Further investigation 2. Consumer report part of the decision 3. Increase in deposit 4. Using Agency to check employment
  30. 30. What Information Must Be Included In a Notice? Name, address and telephone number of the Agency which issued the report. Statement that the Agency supplied the report did not make the decision for the adverse action. A statement that the applicant has a right to obtain, within 60 days, a free copy of the credit report from the agency and the right to dispute the accuracy of the information. See Form 2
  31. 31. Some Legal Protection If LL inadvertently fails to provide a required Notice in an isolated case, then LL has some protection from damages if LL can demonstrate “that at the time of the…violation he maintained reasonable procedures to assure compliance” with the FCRA.
  32. 32. Final Thoughts Be consistent in the Application Process: Use same rental application Always pull a credit report Always verify the same information Exceptions-Disable Applicants-”reasonable accommodations”
  33. 33. Screen criteria should relate to legitimate LL objectives No Subjective Criteria-long hair, smells bad More Final Thoughts
  34. 34. QUESTIONS

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