By Rebekah Near
CEO of Orca Information, Inc
Here we are at the 3rd article on creating a detailed Tenant Selection Policy (TSP). We have covered the following: 1. Why creating a detailed Tenant Selection Policy is important; 2. Where to get help formulating such an affective policy; 3. The Fair Credit Reporting Act and how it requires a landlord to include specific wording. Now we will learn what tenant screening clients at Orca Information, Inc. have found the most affective in creating their policies. One basic need is CLARITY! When your policies are clear and concise, easy to read and understand you not only have informed rental applicants, but your staff is also informed. The policy guides your applicants and your staff. Take out the guess-work! Eliminate confusion. For a video to help train your staff on Tenant Selection Policies click this link. https://www.youtube.com/watch?v=AtVZxvzfyOo
There are at least four categories for Tenant Selection Policies. They are as follows:
- The Application Process – Guidelines for applying to the rental property
- Rules of the rental property and management company
- Potential Disqualifiers identified on the Background Screening Report.
- Disclosure documents explaining laws governing the application process – Tenant Rights!
Over the years I have studied many policies – to help landlords clean them up and make them easier to understand and compliant with laws and regulations. The above 4 categories are more times than not, all mixed together – like a soup! Example: The Application Process is peppered with reasons why a person could be denied tenancy. Then stirred into the mix is information on the Security Deposit. Then back to the Application Process. Make it simple. Keep the categories as clean and separate as possible. Now, let’s break it down even further.
Step 1. The Application Process:
Our clients often title this document, THE APPLICATION PROCESS or APPLICATION GUIDELINES. This describes what steps the applicant needs to apply for the rental.
First and foremost is INCOME VERIFICATION. Proof of Adequate Income could be the following:
- a) Most recent paystub with year-to-date income listed
- b) New hire letter stating salary, job title, starting date, etc.
- c) Self Employed – Tax returns for last two years
- d) Retired – Copies of deposit slips, Investment and/or Social Security earning documentation
Landlords will often first require the applicant to prove their qualifications in every way described in their rental criteria – other than proof of income. A landlord will ask the applicant to begin by filling out a rental application and pay the non-refundable screening fee. The application is sent to Orca Information or another screening company to process the Background Check. The Tenant Screening Report can take several days to complete. Once the screening report comes back to the landlord and the applicants are approved, then the landlord requires “Proof of Income”? All that time and money for both parties can be a source of great frustration. Saving time and money for both landlord and applicant is smart. Make proof of income the first requirement for qualifying! If they do not qualify for income requirements the application process can stop immediately and Co-signer or Increased Deposit discussed before moving forward.
A LITTLE SECRET. WANT TO GET YOUR TENANT SCREENING REPORT BACK FAST SO YOU CAN LEASE-UP THAT APPLICANT? Here is how: Once your applicant proves they have adequate income and their ID confirmed we recommend our clients have the applicant(s) fill out the rental application carefully and thoroughly. Next the rental manager reviews the rental application. Allow me to give kudos to the great rental managers who review the rental applications before sending them to Orca Information for processing. Over the years we have seen these screening reports processed faster and sent returned completed faster when the rental manager makes sure all information is listed on the rental application and is correct. Why is this? I don’t know of a busier person than a rental manager. Talk about multi-tasking! That’s exactly why they take the time to review the rental application – they don’t have a lot of extra time on their hands! In the long run this saves them time.
Yeah, yeah, yeah, I know – many management companies just let the applicant fill out everything online and the cool software absorbs all the information and spits out a great screening report. It is seamless. Much less work for the managers…..NOT! Someone at the rental office has to clarify the missing information on those applications AND/OR you end up with a terrible report but you don’t know it. You do not know the report is missing a lot of important information. Why would information be missing? The super-software companies are NOT tenant screening companies. The computer spits out the best calculations it can with the information given but often it is the wrong or highly limited information. This results in renting to more troubled tenants. Greater losses are at the end of tenancy (evictions).
The applicants will often fly through filling out the information required on the rental application. They make mistakes, leave out important answers to questions, put down the wrong phone numbers for previous landlords. Along with the applicant guess who usually gets a call from the screening company for help with gathering the required information? The rental manager! The process of screening now takes longer and requires more work. Want a quicker turn around time for tenant screening report? Want a more accurate screening report? Carefully review all the information on the rental application BEFORE sending in for the actual screening.
Second and just as important as Income Verification is Proof of Identification. Watch out, this has become a little bit tricky since the passing of the law in WA State – a landlord can not REQUIRE a Social Security number. In the past a government issued photo ID was required along with a Social Security card. The SS card can no longer be required. Neither can the SS number. Instead, landlords are asking for (but not limited to) the following: Government issued photo ID and another form of proof of identity such as a Passport or Visa. There is a complete list of acceptable forms of ID’s titled, Alternative Documents for Screening.
This list was created by the Fair Housing Office of Seattle, King County. You can find it on their website or by contacting me at email@example.com Some of the leading landlord-tenant law attorneys in Washington State strongly recommend you include this form in your rental packet for applicants to view.
In the next article we will continue building a solid, clear and concise Tenant Selection Policy.
About the author:
Rebekah Near has been the owner and operator of Orca Information, Inc, a Tenant and Employment Screening Service located in Burlington, WA since 1995. She also gives trainings and classes for landlords and property managers in multiple states. She is not an attorney and the above is not legal advice. For more educational videos to help train your staff, go to our website and click on the bar at the top titled, EDUCATION. To contact Rebekah Near, send a message to Rebekahn@orcainfo-com.com