5 Landlord Forms, 5 Ways to Make Them Better

Rental forms are key to good property management. Here are some ideas to help you make the most of your landlord forms:

Rental forms are key to good property management. Here are some ideas to help you make the most of your landlord forms:

1. Rental ad
Not all landlords see the rental ad as a part of the leasing package, but the ad is a tenant’s first impression and sets the stage for the entire tenancy. Sure, the ad announces a vacancy, but it can do more.

Make your rental ad do double duty by including this simple warning: Tenant Background Check Required. Problem tenants are looking for low-hanging fruit — a landlord who doesn’t screen tenants. Including those four words may be enough to make a nightmare tenant look elsewhere.

2. Prequalification checklist
If you don’t have one of these, you are not alone. Many landlords wing it when it comes to talking to prospects for the first time. There is great risk in not asking the same questions of every applicant, and there is a lost opportunity in not writing down the applicant’s answers so these can be compared to the rental application.

Every applicant should be asked why they are moving and whether they have provided notice to the current landlord. That puts the tenant on notice that rental history will be investigated. If this tenant is angling to move in quickly and avoid a pending eviction, that question can stop them in their tracks.

3. Rental application
The application not only contains the information needed for tenant screening, it also requires the tenant to make crucial legal promises, including a declaration that the information provided is true and complete, and consent to a tenant background check. That’s strong protection for the landlord, but that language doesn’t appear until the end of the application, after the tenant already has fudged their answers.

Provide a warning to the applicant via a cover letter or instruction sheet that points out the pitfalls of tenant fraud before the tenant completes the application. Tie fraud to rejection of the application, eviction or even referral for criminal prosecution. That’ll get their attention — and may prevent them from risking fraud.

4. Lease agreement
The lease commonly is viewed as the flagship of every tenancy, and landlords tend to take it seriously. One of the most common — and problematic — provisions found in leases is a long grace period for the payment of rent. Rent is due on the 1st, but, hey, you have until the 5th before there are any consequences. And then you may have to pay a late fee. For tenants, that’s easier — and in some cases cheaper — than a cash advance. The lease may as well say “pay me when you can.”

Instead of using that anemic language, sign up to Report Rent Payments, and include the Notice to Tenant in the lease agreement. Rent is due on the 1st. If it’s not paid, it will be reported to a credit bureau. That’s clean and simple and provides incentive to pay rent on time rather than dragging it out until the landlord comes knocking.

5. Move-in checklist
Tracking the condition of the rental at the time the tenant moves in may be the only way to prove the tenant caused damage and seek reimbursement.

If there is a legal dispute over security deposit deductions — the most common reason landlords are sued — what better evidence could the landlord present than the tenant’s own words? Walk through the unit with the tenant on move-in day, and then leave the completed checklist with the tenant for a few extra days. Ask them to note anything they didn’t see during the move-in inspection, sign the form, and return it. That way, the landlord can debunk future claims that the damage was there when the tenant moved in.

How to Avoid Today’s Top Tenant Scams

In a tight rental market, landlords need to tighten their tenant screening practices as well. Tenants who never gave a second thought to late rent payments or property damage now can find themselves unable to qualify. So, they get creative.

Social media makes it easy for tenants to share their thoughts and ideas when it comes to scamming landlords. Fortunately, landlords can view some of these posts, too, and learn to spot today’s most prevalent tenant scams:

1. Target an experienced or lax landlord because they don’t do tenant background checks.

The simple fix: Demand a tenant background check. No exceptions.

2. Supply a fake credit report.

Credit reports need to come directly from the credit bureau to guarantee the report has not been altered. Cut out the “middleman” and prevent tenant fraud.

3. Don’t provide your previous address on the rental application.

Tenants often believe that an omission is not the same as telling a lie. Warn tenants that incomplete applications will not be considered.

4. Use the wrong number for your previous landlord.

This trick is as old as the hills, but still in play. Explain that the application will not be processed if references cannot be reached.

5. List a work reference who doesn’t work there anymore.

Demand supplemental documentation to verify employment and income and warn tenants that inaccessible references will only stall the application.

6. Offer to pay cash (or higher rent) to avoid a credit check.

Too many landlords fall for this trick. The tenant may have cash now, but not three months from now. A promise to pay higher rent rings empty when the tenant isn’t planning to pay rent. Don’t be fooled. Make verifiable income a qualification requirement. Also, sign up to Report Rent Payments with TVS and warn tenants that late or missed payments will only make their credit problems worse.

7. Move in with someone else who has better credit or rental history.

Ask for a list of proposed occupants and demand that all adults complete rental applications. Explain the guest policy to applicants — and the consequences for unauthorized guests.

8. Lie about pets (or non-smoking, or additional occupants).

Intentionally concealing information to scam a landlord is fraud, and tenants should be warned about that. Explaining that a lease-breaking tenant will be evicted — and will need to move once again — can prevent this scam.

9. Leave pet information (or smoking preference) blank on the rental application.

Adopt a standard policy of rejecting incomplete applications.

10. Inflate income.

The most brazen scams involve inflating income. These tricks range from adding a year-end bonus to monthly income to scanning and doctoring pay stubs, depositing borrowed money, or hiring a third-party to falsely verify employment. That’s easier than you might think. Today, for about $75, a tenant can create fictional employment, income, and a reference online. These fake verification companies have gone so far as setting up websites and advertising on Craigslist.

Landlords should avoid online applications where supplemental documentation easily can be altered. It is also important to run a tenant credit check as a final step to confirm that employment history and credit match up.

These common scams — and others — can be avoided simply by following a tried-and-true tenant screening policy:

When advertising a vacancy, state that a tenant background check will be required;
Prequalify applicants over the phone and create a baseline of information to compare to the rental application;
Verify the applicant’s identity with a photo ID;
Demand a fully completed rental application and supplemental documentation;
Include language in the rental application that warns of the consequences of false or incomplete information;
Verify the information in the application, including checking references; and
Run tenant screening reports to confirm that the applicant is qualified.

Not all tenants are scammers. Some make innocent mistakes. Others have spotty records but still may be good tenants. Assure prospective tenants that some problems can be resolved and encourage applicants to be upfront about those issues. Make it easier for tenants to do the right thing, and harder for them to lie.

Facebook Rental Ads Under Scrutiny in Canada

The Canadian Human Rights Commission and the Ontario Human Rights Commission are expressing concern that rental ads placed on Facebook Canada potentially are discriminatory.

The concern was triggered by a lawsuit filed in the U.S. against Facebook alleging that its rental housing platform allows — and even encourages — discrimination. The lawsuit was brought by a group of U.S. housing advocates that claimed the targeting features of the advertising platform allowed landlords to easily exclude certain demographics based on user interests and preferences. For instance, landlords could exclude anyone with an interest in toddlers, teenagers, religion, or disabilities.

Those lawsuits alleged that Facebook was aware of the risks of discrimination when it promoted its ad platform — which relies on the extensive Facebook database — to businesses but did little to prevent discrimination.

As a result, Facebook agreed to increase education and limit some targeting features for housing ads. But some remain skeptical these steps will do enough to prevent discrimination.

In a letter to Facebook’s Global Director, the Canadian Human Rights Commission and the Ontario Human Rights Commission are asking the social media platform to clarify what specific steps it has taken to address the problem.

It is important to note that in the U.S., employment ads also were challenged. Many of the private employers who targeted or excluded certain demographics on Facebook are being sued for discrimination. So, it stands to reason that private landlords who continue with the Facebook targeting strategy in order to encourage or exclude specific populations may find they have violated federal or provincial discrimination rules.

Human rights violations in rental housing can prove costly for landlords. Fortunately, these mistakes can be avoided:

In the text of rental ads, don’t attempt to describe the “right” tenant. Focus solely on a description of the property;
Remain open-minded about who applies. Landlords who wait for the person they envision inevitably turn away perfectly good prospects while renting to someone who only appears to be qualified;
Don’t hold back on details. Include the amount of rent, the size and location of the property, availability of parking, smoking and pet rules, and similar requirements, and state that a tenant background check is required, so prospective tenants can self-qualify. This serves to turn down the volume on calls from unqualified prospects — and allows landlords to focus on screening the qualified ones; and,
Screen applicants solely on relevant qualifications — sufficient income, financial responsibility, and good rental history.

What Landlords Need to Know for 2020

Now is the time to get ahead of recent trends and start your new year off on the right foot:

Sticking Landlords with the Affordability Problem

Tenant screening restrictions
Affordable housing — or the lack of it — is the prevalent issue in many metro areas today. There are various theories as to why there is a shortage of rental housing. Some experts say it’s because millennials are not buying homes at previous rates and therefore not creating vacancies in rental housing. Others say it’s because boomers are choosing a more carefree lifestyle and grabbing up downtown loft apartments. Economists blame rent control initiatives and regulations for stifling new construction.

But the most troubling theory regarding affordable housing comes from local lawmakers who say that the problem is landlords who carefully screen their tenants.

This year, landlords around the country faced new restrictions on tenant screening that limited their ability to reject tenants on such disqualifying factors as violent criminal history or poor credit. These rules prevent landlords from minimizing losses, and in some cases, require landlords to select high-risk tenants to the detriment of low-risk renters.

Despite the lack of logic — if there are only so many vacancies, why give preference to problem tenants and push away the good ones — these rental regulations are very popular with lawmakers, many of whom use this pro-tenant rhetoric in their election campaigns. It is likely more cities will pass these ordinances before there is any real data available on the impact such rules have on vacancies, evictions, and safety.

Security deposit limits
In addition to the tenant screening restrictions, another increasingly popular strategy for city lawmakers is to limit a landlord’s ability to collect security deposits up front. The idea that a security deposit can be payable in installments over, say, six months, is ludicrous when you consider the risk that a tenant will damage a property before they pay up. If the tenant misses an installment, it is not clear whether that’s grounds for an eviction, or whether the only remedy is to cross your fingers and hope for the best.

The latest example of such a security deposit restriction comes from Cincinnati , where lawmakers want to do away with security deposits altogether and have tenants take out an insurance policy. A landlord seeking deductions to cover damage would then need to wrestle with the insurance company, and the tenant would have no incentive to avoid damage because they’re out their premium payments either way.

If your landlord rights are being eroded, look to the Landlord Credit Bureau to fight back. This tenant database includes both high- and low-risk tenants. While landlords in some cities may not be allowed to act on criminal history, in nearly every case the landlord can screen on rental history. It’s hard to imagine a scenario where landlords are required to rent to a person who didn’t pay rent or damaged a previous rental properties.

Tenants Want to Report Rent Payments

A surprising statistic was reported this year: the majority of tenants want to report rent payments to a credit bureau. These statistics also show that tenants who sign up to report rent payments pay on time. These tenants reap the rewards: better credit and better rental history. That makes buying a home — or car, or boat — a dream that’s within reach.

At the same time, reporting rent payments also keeps less-motivated tenants in check. They will think twice about missing a payment because reporting to a credit bureau is a serious consequence.

If you haven’t already, it’s time to sign up to report rent payments through TVS.

Tenant Fraud Tied to Online Rental Applications

Oh, the ease of automated rentals! Now, an applicant can spot a property, take a tour, complete and submit a rental application, sign a lease, and even pay rent, all without the landlord lifting a finger — or meeting the prospective tenant.

It’s easy to see why online rental applications are being blamed for the uptick in tenant fraud. Without oversight, it’s easy to fudge on the application, or create an entirely fictional persona. None of this would be a problem, of course, if the person is a good tenant. But how will you know?

Don’t wait for a skipped rent payment or a call from the police to find out the person living in your rental isn’t really the person who completed the application. Stick to in-person tenant screening, which includes prequalification and a demand to see a photo ID. Only provide a rental application to applicants you have met.

HUD and Others Pushing Lead Paint Disclosure Law

Lead poisoning is a serious matter. Exposure in children can cause lifelong disabilities.

At the same time, dinging landlords who fail to supply lead paint disclosures, even in the absence of lead hazards, is low-hanging fruit for HUD and other state health departments. With fines averaging between $3,000 to $11,000 per tenancy, failing to supply disclosures is a costly mistake.

HUD has issued announcements relating to lead paint prosecutions in recent months and has vowed to prosecute landlords who fail to comply with EPA rules. States are following suit. Yet, many landlords still are unaware of this requirement.

If you own a property that was built before 1978, take this issue seriously and research these mandatory lead paint disclosures. Visit this link for information that must be provided to tenants prior to signing a lease.

These simple tweaks will help make your 2020 a profitable and stress-free year.