One Sure Way To Increase Tenant Selection Success Rates Part 2

Creating A Clear And Concise Tenant Selection Policy

By Rebekah Near

In the first of these six articles we learned why creating a detailed Tenant Selection Policy is important and where to get help formulating such an affective policy.  Now we are going to learn how to define one.  This is simplified because some states such as Washington have passed laws specifically describing what is required.  In Washington State this law is called THE FAIR TENANT SCREENING ACT OF 2012.

It helps to keep in mind a landlord’s written policies are governed not just by the Fair Tenant Screening Act of 2012, but also by HUD Guidelines for Disparate impact, Credit Bureau Regulations and the Fair Credit Reporting Act as well as other federal, state and local laws and ordinances.  Belonging to a Landlord organization which keeps you up to date on these ever-changing laws is essential.

MINIMIZING YOUR LIABILITY WHEN SCREENING AN APPLICANT.  Lawsuits – Over the years I have seen lawsuits against landlords for not complying with one or more of the laws described in the Fair Tenant Screening Act of 2012.  In fact it seems to be a common occurrence.  In 2020 there was a class action lawsuit! The Defendant in the case was a large property management company.  The attorneys for the Plaintiff seemed to want to make an example out of this management company, so they made it a class action suit.  No doubt this was extremely painful for this management company to fight the case.  What did the management company fail to do?  We will get into the heart of this lawsuit a little later in these articles.

There have also been lawsuits against landlords for other reasons other than the Fair Tenant Screening Act.  One example is non-compliance with laws pertaining to emotional support animals.  Even though this type of lawsuit may not have anything to do with the Fair Tenant Screening Act (FTSA), any non-compliance with the FTSA may often be included in the lawsuit – just to beef up the charges against the landlord.   One of the first things an attorney representing a prospective tenant will require is an audit of the landlord’s compliance paperwork.  Each little mistake or oversight on compliance documents can be included in the lawsuit and will increase the amount the landlord has to pay the Plaintiff and his or her attorneys.  In other words, more costly to the landlord!  Therefore, landlord’s need to make sure they include all requirements of the Fair Credit Reporting Act of 2012 as well as other laws.

Simplifying, I will describe what we at Orca Information, Inc. recommend for our clients – BE FAMILIAR WITH the Fair Tenant Screening Act of 2012.  All clients at Orca have this information available to them.  Note:  Below is a partial description of the law.  For the law in its entirety, click the following link.

 RCW 59.18.257  FAIR TENANT SCREENING ACT OF 2012

1. Prior to obtaining any information about a prospective tenant, the prospective landlord shall first notify the prospective tenant in writing, or by posting, of the following:

a. What types of information will be accessed to conduct the tenant screening – Example: Credit report?  Court records?  Rental references?  Employment verification?

b. What criteria may result in denial of the application – Example: Score of 500 or below?  $1,000.00 in unpaid judgments or collections in last 7 years? Criminal history which causes damage to persons or property?  Lack of rental history? False or misleading information on the rental application or omission of material fact?

c. If a consumer report is used, the name and address of the consumer reporting agency (tenant screening company) and the prospective tenants rights to a free copy of the consumer report in the event of denial or other adverse action (denial, increased deposit, co-signer) and to dispute the accuracy of information appearing on the consumer report; and

d. Whether or not the landlord will accept a comprehensive reusable tenant screening report made available to the landlord by a consumer reporting agency ..……

e. The landlord may charge a prospective tenant for costs incurred in obtaining a tenant screening report only if the prospective landlord provides the information as required….

f. If a landlord conducts his or her own screening of tenants, the prospective landlord may charge his or her actual costs ……

g. If a prospective landlord takes adverse action, the prospective landlord shall provide a written notice of the adverse action to the prospective tenant that states the reason for the adverse action. The adverse action notice must contain the following information in a substantially similar format, including additional information as may be required under chapter 19.182 RCW.  (For an example of the required format click the link).

2. Any landlord who maintains a website advertising the rental of a dwelling unit ….must include a statement on the property’s home page stating whether or not the landlord will accept a comprehensive reusable tenant screening report….

In the next article we will learn more about that class action lawsuit – exactly what was the complaint made by the Plaintiff and how much money were the attorneys asking for restitution?  By building a clear and concise Tenant Selection Policy we can learn how avoid similar complaints by rental applicants.

About the author:

Note:  Rebekah Near is not an attorney and is not qualified to give legal advice.  The above information is her opinion based on her work in the Tenant Screening industry.

One Sure Way To Increase Tenant Selection Success Rates- Part 1