Verifying a tenant’s rental history helps ensure that a landlord gets the most qualified tenants possible for their unit. Rental history can be provided by applicants, previous landlords, tenant screening companies, or even the screening landlord can pull information as well.
What is Rental History?
Rental history refers to a tenant’s record of living in rental properties. Usually this contains information such as evictions, missed or late payments, and property damages. It’s also necessary for the landlord to collect contact information of former landlords, dates lived in previous rentals, and past rental addresses.
Data such as evictions, missed payments, and property info can be found in publicly available data. Most landlords will pay a tenant screening service to compile a report from that data.
However, information such as late payments (less than 30 days late), and property damages can typically be found only through contacting previous landlords. If the property damages became a criminal matter, those may be found through public record as well.
All landlords should gather rental history as it’s a key piece to choosing between applicants. The average eviction costs between $3,500 – $10,000, so it’s important to pull complete rental history to find the applicants least likely to be evicted.
How to Verify a Tenant’s Rental History
Here are the 6 steps to verify rental history:
- Ask About Rental History on the Application
- Have Applicant Sign a Release
- Review Application
- Talk to Previous (or Current) Landlords
- Avoid Discrimination When Establishing Rental History
- Check for Prior Evictions
1. Ask About Rental History on the Application
While landlords would be naïve to trust everything applicants tell them, it’s still a pretty good starting point to ask them questions about their rental history.
Also, in-depth questions will serve as a filter to keep out some of the less-qualified applicants. This saves landlords time and money when it comes to actively screening. Plus, the fewer applicants that a landlord has to send rejection letters to, the less likely the landlord will become the subject of a discrimination lawsuit.
Here are some good questions to ask on a rental application:
- Have you ever been evicted?
- Do you have a track record of missing payments or being late on rent?
- Have you ever broken a lease?
- Have you damaged a rental property before?
- Do you believe your previous landlords would rent to you again?
Also ask for previous landlords’ contact information. Make it clear that you are going to verify their answers on this application, and that applicants with information that doesn’t line up will be removed from consideration for the rental.
2. Have Applicant Sign a Release
Having a release allows you to go and collect information about the tenant. Landlords need permission to gather financial data under the Fair Credit Reporting Act (FCRA). Furthermore, most states have privacy laws requiring permission before a landlord may talk to a previous landlord.
3. Review Application
At this point, before doing any in-depth screening, landlords should review the applications to determine if there are any that can be immediately disqualified.
When reviewing the application, make sure that you have set firm standards for disqualifying an applicant. This helps you make quick decisions about filtering out more candidates.
Furthermore, documented standards help protect you from discrimination lawsuits. For example, if an applicant with poor credit tries to sue you, but you can prove that you reject all applicants with under a 500 credit score, you’ll likely be in the clear.
Here are a few examples of when a landlord might dismiss an applicant at this point:
- Didn’t finish application
- Didn’t consent to have information gathered about them
- Didn’t provide references
- Has prior evictions
- Has poor credit history
- Can’t verify their income
- History of late payments, damaging property, or breaking leases early
Most of these are yet to be verified, so you’re relying on the applicant to self-report this. If you state your requirements for a tenant on the application, anyone falling under those thresholds will likely not submit the application—which saves you time and money on screening.
Whether on the application or during future conversations, ask all of your applicants the same questions. For example, don’t ask a woman if she’s planning to have more children, or someone who appears foreign about their country of origin.
4. Talk to Previous (or Current) Landlords
This is perhaps the most important step of all, as these landlords know first-hand how your applicant was as a tenant. In fact, they can provide you information that often isn’t available in any report.
For example, late payments cannot be reported to credit bureaus until they’re at least 30 days late. Many landlords still won’t report late payments to avoid the hassle. If the tenant consistently paid weeks late, it wouldn’t show up on reports—but it’s still something you should know about and a good basis for disqualifying an applicant.
Talking to previous landlords does have its pitfalls, so here are a few best practices:
- Don’t ask about medical history
- Don’t ask about financials (protected under the FCRA)
- Don’t ask about anything protected by the Fair Housing Act (FHA)
- Ask the same questions for every applicant
- Stick to facts
- Only ask relevant questions
If you turn down an applicant and they find out that you were talking to a previous landlord about discriminatory or private topics, you will likely end up in a lawsuit.
5. Avoid Discrimination When Establishing Rental History
The Fair Housing act lists a number of protected classes. If a landlord denies an applicant because they fall into one of the protected classes, they may be sued.
These protected classes are:
- Race
- Color
- National Origin
- Religion
- Sex (including gender identity and sexual orientation)
- Familial Status
- Disability
There are many groups of people that fall into those protected classes that may not be obvious up front. For example, you cannot ask someone’s age, ask about their children, or even ask where they’re from.
Discrimination gets trickier because it can be hard to prove that you didn’t discriminate. For example, let’s say you talked to a previous landlord about how the tenant is from another country and is hard to understand.
You may have a a different, legitimate reason for denying their application, but if they find out their national origin was discussed, they can make a case that you were discriminating. For that reason, stick to relevant questions about their rental history.
With all of that in mind, here’s an example list of questions you should ask a prior landlord in order to establish rental history:
- Can you confirm they rented from you?
- Did they pay rent on time and in full?
- Did they reasonably take care of the property?
- Was the property in good condition when they left?
- Did they break any rules of your lease agreement?
- Were they respectful and proactive with communication?
- Did they smoke on the property?
- Did they receive their full security deposit back?
- Did they give you proper notice before vacating?
- Why did they move out?
- Were they responsible for landscaping and snow removal?
Some landlords will be hesitant to talk to you for fear of a lawsuit. You can help put them at ease by letting them know that you have received consent from the potential tenant to discuss their rental history.
6. Check for Prior Evictions
It’s essential that landlords check for prior evictions, as 21.7% of tenants who get evicted have prior evictions on their record.
The easiest way to check for evictions is to pay for a tenant screening service. You can choose to purchase all-in-one services that provide you credit reports, criminal checks, and eviction histories (such as AAOA’s Blue service).
Some tenant screening companies offer eviction history information a la carte for a much lower price (such as through LeaseRunner).
When deciding on a service to use, be sure to check whether that particular service pulls nationwide, state, and/or local data. It’s best practice to pull nationwide data, but for tenants who’ve lived in the state their whole life, you could save some money and opt for just state and local history.
It’s also possible to pull this information for free. Evictions are public record, and can generally be found through the state’s court website. However, this isn’t free to do in every state, and online sources generally are lighter on details than physical records
You can visit the local courthouse to gather more complete data, but many states do charge for this service. At that point, you might as well pay a professional service to do it for you.
What if a Tenant Has No Rental History?
This would be either someone who has never rented before, or it’s been so long that there isn’t a reliable rental history to research. Perhaps your process is to only pay for state & local reports and your applicant comes from out of state.
Generally, no rental history isn’t a great reason to turn someone down out of hand, so you need to dig a little deeper into the reasons why and how to handle them.
No Rental History – Too Young
Someone fresh out of college may not have a rental history. Perhaps they lived in the dorms, at home, or with a family member.
While you cannot deny housing based on someone’s age (that’s considered discrimination), this person is also unlikely to have a long job history. They may have a lot of student debt, but also may not have the burden of a car payment or medical debt like people a little further along in life may have.
Of course, you need to take this on a case-by-case situation. If the applicant graduated with a master’s degree and landed a 6-figure job right out of college, there’s probably nothing to worry about.
On the other hand, if this person has no rental history, no job history, and their job only barely covers the debt-to-income parameters you’re looking for, perhaps another applicant would be the way to go.
Also, without rental history, you can always base your decision on your first impression.
Meet with them. Get a feel for their character. If they were in college, can you speak to a few professors? If they graduated, that’s a good sign they know how to work hard and be responsible.
Of course during all of this, be sure to still pull credit and criminal histories to get a more complete picture.
Landlords are legally within their right to require a co-signer who would also be financially responsible for rent payments. This situation with a young renter and no history would certainly be an acceptable situation to do so.
No Rental History – Previously Owned Houses
Applicants may come to you that have never rented a house before, or it’s been so long since they rented that no report will be accurate.
It happens sometimes where people “downgrade” to a rental because they have no other options. Or, perhaps they’ve changed their opinion and would like to avoid the headaches of homeownership. This often happens with older tenants who would like someone else to handle maintenance issues.
While there is no prior landlord to talk to, still reach out to professional and personal references, and pull credit and background history. Someone who’s owned property for a while will have a substantial credit history and their report will let you know if they regularly paid their mortgage.
Furthermore, previous homeowners are already used to treating a property like they own it. That’s great for you.
The only worry would be if they are set on getting back into an ownership situation as soon as possible. You might lose a great tenant after a year. That’s part of the judgment call you’ll have to make when screening tenants.
