Without understanding an applicant’s rental and eviction history, landlords are more likely to rent to tenants that will eventually be evicted. In fact, 21.7% of evictions are from tenants with prior evictions on their record.
What is Included in a Tenant’s Rental and Eviction History?
With the average eviction costing between $3,500 and $10,000, avoiding evictions should be a landlord’s number one concern. The best way to do that is to take a look at their rental and eviction history and decide if they are a low-risk tenant.
Rental history includes information like:
- Late payments
- Missed payments
- Property damage
- Vacated properties early and/or without notice
- Communication style
- Adherence to lease rules
Altogether, this information gives a fairly good idea of how the applicant has behaved in the past as a renter. While other screening reports can provide good background information (such as criminal activity, credit history, income, and job history), rental history actually shows how the applicant has acted in the past in rental units.
Evictions and missed payments can be found through tenant screening reports, but the rest of the information is usually only discovered by talking with a previous landlord.
Late payments can only be reported if they are more than 30 days past due. Even then, it requires a landlord to report it. To find applicants who are frequently late or haggle over rent, you must talk to a prior landlord.
How Do Evictions Get on Public Record?
To begin the eviction process, landlords serve the tenant a written eviction notice. Depending on the situation, the landlord can demand they vacate immediately (an “unconditional quit” notice), give a chance to pay owed rent by a certain time (a “pay or quit” notice), or allow for the tenant to comply with lease rules (a “cure or quit” notice).
When it’s time to evict a tenant, this becomes a matter for the courts. The landlord (or his attorney) will file the requisite paperwork with the appropriate court.
At this point, evictions are now a part of public record as it has been filed in the court system. Different states will have differing amounts of information available online for eviction cases. Often, evictions will not show up in either credit reports or criminal background checks.
How Long Do Evictions Stay on Record?
Each state has different laws, so this can be a difficult answer to pin down. Court records are permanent, meaning that an eviction can remain discoverable forever.
However, the Fair Credit and Reporting Act (FCRA) limits how long negative information can be used in consumer reports. This means that a tenant screening report cannot include eviction data from more than seven years ago.
Some differences in state law around evictions include:
- Court records for evictions may or may not be used to make a rental determination
- Sealing or expungement of records may be allowed
In all practicality, if an eviction is more than seven years old, it shouldn’t be of interest to most landlords. Evictions are often a matter of circumstance, and much can change in that amount of time.
Should Landlords Accept Tenants With Poor Rental and Eviction History?
How strict a landlord needs to be with poor rental history and prior evictions will depend on the desirability of the property. A landlord with 60 applicants can usually have the luxury of disregarding almost any applicant with evictions, missed or late payments, or anything else included in a rental history.
Of course, that’s not the case for most properties, and landlords will have to make tough decisions about their applicants.
Accepting Tenants With Prior Evictions
While every landlord hopes that a perfect tenant falls into their lap, with absolutely no negative marks at any step of the screening process, this won’t always be the case.
Some landlords will want to set minimum standards for evictions. For example, if the applicant has an eviction in the past year, the landlord could decide to automatically reject them—regardless of circumstances.
However, doing this can result in missing out on someone who might otherwise be an excellent candidate. Here are a few things a landlord should consider when looking at applicants with prior evictions:
- Were they forthcoming from the beginning? If an applicant tries to say that they’ve never had an eviction, but your screening reports say otherwise, that’s someone that you should reject. You want someone trustworthy in your property. However, if they proactively say in their application that they have prior evictions, how long it’s been, and the reason why, then that’s someone you could give further consideration to.
- Did they have a good reason for the eviction? This is going to be a judgment call on your part. Did something extreme happen that will likely not happen again? Or was the eviction a result of mismanagement over a long period of time? For example, if the applicant’s mother got sick and they had to send money to her for medical bills, that’s different from someone who racked up credit card debt rather than paying rent.
- How long has it been? Another important factor is to look at how long ago the eviction was. If it’s been 5+ years, and it happened when they were fresh out of college, that can be overlooked. If they were evicted 6 months ago, almost no sob story will help a landlord feel like that person’s character or situation has changed enough in that short of a time.
- How does the rest of their application look? This might be the most important factor. If the applicant has poor credit and a spotty job history in addition to the eviction, they shouldn’t be in consideration. If they appear to be a perfect candidate other than an eviction four year ago with a legitimate reason why it happened, then you can likely feel comfortable giving this person the lease.
Accepting Tenants With Poor Rental History
Now, let’s say that you have an applicant that never had an eviction on their record, but speaking with their previous landlord uncovered one or more concerning incidents.
Some incidents should be grounds for immediate dismissal of their application, while others can be overlooked. Let’s look at a few different factors for accepting an applicant with poor rental history:
How long has it been? How’s the rest of their application? Were they forthcoming? These are the same as listed above for applicants with prior evictions. If the applicant was honest, has great qualifications otherwise, and noted the issue(s) on the application, those are all massive points in their favor.
How severe was the infraction? Rental history can include concerning issues like late or missed payments, or it could be as simple as the applicant wasn’t the best communicator. This will be a judgment call for landlords, but they should take into account both severity and quantity of the infractions. One call from the police about a loud party five years ago is different from several arguments and fights with neighbors over the past year. One late payment a few years ago is different from multiple late payments in the past 12 months.
Are the accusations legitimate or cause for future concern? It’s also entirely possible that a previous landlord may not like the applicant and may exaggerate a claim. For example, they might try to claim that the applicant broke a lease rule, like having a pet or smoking, that is entirely unfounded. Or, perhaps the police were called because a friend sold drugs in the parking lot, but now the applicant is no longer friends with that person. This is a good opportunity to listen to the applicant and see if they can clear things up.
In general, best practice with an otherwise qualified applicant is to dig deeper. You don’t want to miss out on a great long-term tenant because of one mark on their record that wouldn’t be an issue moving forward.
How to Mitigate Risk With Underqualified Tenants
If a landlord does decide to give the lease to someone with a spotty rental or eviction history, there are a few actions they can take to mitigate their risk. However, it’s worth noting that there must be an obvious reason for taking any of these actions, otherwise the landlord runs the risk of being sued for discrimination.
- Raise Rent – A landlord can legally charge higher rent to someone who isn’t as qualified. This helps protect the landlord from someone who may be at a higher risk of non-payment, early vacancy, or eviction.
- Require a Higher Security Deposit – Often, a landlord will charge one month’s rent as a deposit. In the case of a higher risk applicant, they can choose to require two month’s rent or more to protect against property damage or missed payments.
- Require a Co-Signer – A co-signer is someone who signs the lease along with the occupant and assumes financial responsibility for missed payments or damages. The most common situation here is for a parent helping out a child in their first rental property.