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Managing The Property : Issues and Insights

Criminal Background Checks Do you need to?

Most owner/managers do see the need for credit checks to help them choose a good resident, who has the ability and willingness to pay bills on time....but background checks? What's the reasoning behind the extra cost?

Some owner/managers use background checks for the same reasons that employers use background checks. The rational is that it will make the community a safer place and limit liabilities of the owner/manager, by not letting dangerous people into the residence. But tread very carefully here, be sure that people who have paid their debt to society are treated fairly and within the law. Read up on  Fair Housing and protected classes to avoid discriminatory actions.

The Law


An owner/manager does have the right to have a background check done on a possible renter. You must comply with Fair Housing Laws and Fair Credit laws. There is information available on this site or you can go to www.ftc.gov.

Things to Know
  • Fair Housing Law: be sure you treat all classes of people equally.
  • Fair Credit Law and the state laws designed to augment the Federal Law
  • The rental applicant must give written permission for a background check and a credit check, generally found on rental applications near the applicant signature. If your application is not signed, you should not  but a credit or background report until it is signed and dated.
  • A background check: you must be consistent and do this for all applicants, if you do this at all.
  • Application Fees: Some states limit the amount an owner manager may charge an applicant. The maximum charge allowable may not cover the cost of both a credit check and a criminal background check.
Too Much Knowledge?

What are your screening criteria? If you find an applicant has a background and they have already paid their debt to society, should you reject them? After all, Fair Housing is likely to have a serious problem with an owner who rejects all applicants with a criminal background. If you don't and your tenants find out, how will they react?

What Should You Do?
Screening criteria are designed to find a quaility tenant that pay rent on time, wont abuse property or other residents.
  • Develop a screening criteria that respects Fair Housing and State laws
  • Apply your tenant screening criteria equally and consistently...always.
  • Document
  • If you run background checks as policy, run it for those that have first passed all your other criteria. Its costly to run a background report on those applicants that have not passed the other screening criteria.

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