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Protect Your Investment By Vetting Tenants

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Whether you are a landlord and or property manager managing rental properties, you are tasked with selecting reliable and trustworthy tenants. Failure to manage this process effectively can result in loss of rent, and even worse it the wrong tenant may cause property damage.

Tenant Application Form

The process of tenant selection commences with the vetting of the application forms, and it is this task that requires due care and attention to make sure the information provided is real. It’s a fact of life that people do lie, and particularly so when they’ve feel they won’t be given the same consideration as the next person. With a lack of rental property supply, prospective tenants will go above and beyond, and that will often result in some applicants lying on their application form in an attempt to qualify for the home.

Identity Fraud

In the US not only will people change their name and provide fake evidence i.e. paystubs they will also provide a false social security number (SSN) according to the National Apartment Association.

Dishonest people may even try to use an SSN of someone who is deceased or is a minor child to create a fake identity on their lease applications. A simple search on the Internet for “fake paystubs” also demonstrates an alarming amount of deception-tools available at your fingertips. Identity theft has proliferated in the past few years, so landlords must be careful when asking for personal information from applicants.

Background Checks

Landlords often ask for a social security number while performing a background check as part of the credit-worthy assessment however is it easy to detect if someone is using a fake SSN on their application?

Credit Reports

Here are a few ways to verify an applicant’s information:

  • A credit report does not necessarily require an SSN, only a name and date of birth. Always pull the credit report yourself instead of relying on one that an applicant provides. It’s easy enough for someone to fake their credit report if they are going to fake an SSN.
  • After pulling the credit report, ask to see the applicant’s driver’s license before showing your property. All of the information on the license must match all of the information on the application and the credit report.
  • SSNs are issued sequentially, so the SSN should line up with the applicant’s birth date. For an SSN from 1975 will match the applicant’s birthday listed in the same year – if not then this should be a huge red flag.
  • If someone says they do not have an SSN because they are in the United States on a student or work visa, they can provide an alternative i.e. the Individual Taxpayer Identification Number (ITIN) which is assigned by the IRS. Use the ITIN in the absense of a SSN.

Know The Rules

Also, in some states such as California, some laws prohibit a landlord or property management company from asking for such information as your citizenship or immigration status or social security number.

At the federal level, the Federal Fair Housing Practice Act protects against any housing discrimination based on color, race, national origin, religion, family status, disability, sex, and age, among other things. For each particular state, be sure to find out what the laws are. In Florida, for example, any member of the military must be told of their approval or rejection of their rental application within seven days.

In California, applicants are legally entitled to a copy of their credit report if the leasing agency has pulled one. Every state may have different regulations, so be aware of this as you move forward.

So what happens if you unknowingly accept a tenant with a fake SSN?

Well, they’ve already knowingly committed fraud, so it’s likely they won’t be the perfect tenant. This is likely to not end well and collecting the rent may become a challenge. Plus dishonest tenants are also likely to be disrespectful to your property and cause damage, this is why your tenant-screening process is so essential.

In summary, you’ve worked hard on marketing your rental property to attract prospective tenants, now you need to follow it up with a robust tenant selection procedure.

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