There are many moving parts to the rental verification process, but the one you won’t want to gloss over is a prospective tenant's rental history.
A potential tenant's rental history check will provide you with their eviction and payment history and give you a better idea of how they treated their previous rental property from the perspective of their previous landlord(s).
With over a decade of property management experience, I've got some insights that I think you'll find beneficial when it comes to learning how to check the rental history of your prospective tenants.
Previous Rental History on The Rental Application Form
First, landlords generally want to know the prospective tenant's current and prior rental addresses and landlords from at least the past two to three years. However, it's not uncommon for some landlords to go back even further, especially if red flags come up on a tenant's credit or background check.
A few of those red flags might be:
- Past due utilities owed to a utility company at their prior rental(s).
- Real estate-related late payments on their credit report.
- Judgment or court-ordered lien related to real estate debt.
Red flags or not, you'll need to make sure that prior to starting the rental history screening, when the rental applicant fills out the rental application for your property, they provide you with all of the relevant address history and contact information for any of their prior landlords for the amount of time specified in your rental application criteria.
Ah — yes, the rental application criteria!
Create Your Rental Application Criteria
In general, it's a good idea to indicate on your rental application criteria how far back you will go when screening your prospective tenant's rental history and how that may impact an approval or denial.
For example, I only went back three years for rental history at one rental property that I managed in the not-so-distant past. Anything that came up beyond three years we did not take into consideration when approving or declining a rental applicant, as long as they had a positive rental history in the years following.
That information was fully disclosed in the application criteria form that every applicant signed.
Getting a Rental History Verification Authorization
In order to complete a rental history verification, you will need to get the applicant’s written permission allowing you to verify their rental history. If you complete this step without the applicant's express written consent, it can land you in some hot water.
The good news is that the rental history authorization can be signed in person or electronically. You can use platforms like TenantCloud, which offer fully customizable online rental applications. This makes it easy for you to acquire the necessary authorization for a rental history check from prospective tenants as part of the routine application process.
Once you have that authorization, you can get started with the screening process.
Methods Used to Verify Rental History Records
When screening potential tenants to assess their rental history, you have several verification methods at your disposal to ensure you are making well-informed decisions. There are both automatic methods and manual methods. We'll cover the most efficient methods first.
Automatic Rental History Verification
Rental History Reports: Many tenant screening services (including the ones right here on TenantCloud) provide rental history reports, including eviction history, prior address history, and rental payment patterns if they were reported to the bureaus.
Credit Checks: Typically, tenant credit checks do not include an actual FICO credit score, but rather, a 'Renter Score' or just a detailed credit report. Running a credit check using the TenantCloud Tenant Screening tool can provide insight into a tenant's personal information, such as payment habits, including whether they have a history of paying their bills on time. This often includes prior rent payments, rent judgments, and liens, especially if they were reported to the credit bureaus.
Court Records Search: Public records can be checked for any past evictions or disputes between landlords and the tenant. Many jurisdictions have online databases for court records, which can be searched for free or a small fee. On TenantCloud, you can use our tenant background check tool to automatically screen them in the county they currently live in, as well as every county they've lived in previously.
Income Verification: Confirming the applicant’s income through pay stubs, tax returns, or employer contact can help ensure they have the means to afford the rent, which indirectly supports a stable rental history. On TenantCloud, this can largely be done through our Income Insights report as part of your standard tenant screening process.
Side Note: When taking rent-to-income ratios into consideration, according to this study, it recently reached an average of 40% nationwide, marking the lowest rent affordability in decades. This decline is attributed to rapid inflation, stagnant wages, and soaring home prices, significantly impacting households renting median-priced homes, which now allocate 40% of their gross income to rent.
Manual Rental History Verification
Previous Landlord Interviews: Contacting previous landlords or property managers directly is one of the most common and effective methods; however, it can also be the most tedious and time-consuming method. Back in the day (as in, just 5-10 years ago), this was still done by fax. Now, it's usually done via email.
Reference Checks: Apart from landlords, personal references can sometimes provide insights into the character and behavior of potential tenants.
Online Property Records: Manually checking online property records can sometimes verify ownership and the applicant's claims about where they have lived.
Social Media and Online Presence: While not always reliable, some landlords look at an applicant’s public social media profiles for any red flags or confirmations of past residences. This has become less reliable as social media platforms have made it possible for people to make their profiles and the information they share online invisible to the general public.
Prep Your Questions for Prior Landlords
If you opt for the phone call, fax, or email method of verifying your rental applicant's rental payment history, then prior to reaching out to the previous property management company or landlord, you'll first want to prepare your questions.
Here’s a list of questions to help guide you as you create your own.
Disclaimer: This list of questions is for general guidance and has not undergone legal review. Ensure compliance with all applicable federal, state, and local housing laws when conducting tenant screenings.
Questions for Past Landlord(s)
- Lease Responsibility
- "Can you confirm that the tenant was the primary leaseholder at your property?"
- Lease Term
- "Could you provide the exact dates the tenant started and ended their tenancy?"
- Rent Details
- "What was the agreed monthly rent for the tenant, and did this rate include utilities?"
- Property Address
- "What is the full address of the property the tenant rented from you?"
- Payment History
- "Did the tenant consistently pay rent on time? If there were late payments, could you provide details on the frequency and circumstances?"
- Outstanding Payments
- "Are there any outstanding payments for rent or utilities owed by the tenant? Did you ever receive a rent check from them that was returned for insufficient funds?"
- Notice and Vacating Procedures
- "Did the tenant provide proper notice before vacating the unit as per the lease agreement?"
- Security Deposit Usage
- "Was any portion of the security deposit retained due to property damage or cleaning fees? Could you elaborate on the nature of the damages, if any?"
- Legal Actions
- "Were there any instances where you had to serve a legal notice, such as a '3-day notice,' to the tenant? Was an unlawful detainer ever filed or an eviction carried out?"
- Neighbor Relations and Complaints
- "Are there records of any neighbor complaints or formal noise complaints against the tenant?"
- Pet Ownership
- "Did the tenant have any pets, and if so, were there any issues or damages related to pet ownership?"
- Property Maintenance and Care
- "How did the tenant maintain the property? Were there any concerns regarding the upkeep or reporting of necessary repairs?"
- Lease Compliance
- “Did the tenant comply with all other terms of the lease, such as rules regarding noise, use of common areas, and parking?”
- Lease Renewal History
- “At any point was the tenant offered a lease renewal, and did they accept it?”
- Overall Tenancy
- “Based on your experience, would you rent to this tenant again? If not, can you provide specific reasons?”
It's important to note that if a question is not based as much on facts as it is on opinion, many landlords may not answer it. In fact, many property management companies have stopped asking opinion-based rental history questions altogether and have strictly focused on fact-based questions.
Once you have prepared your own questions, here are some things to expect and look for during your phone call with the tenant's previous landlord.
Hard-to-Reach Landlords
You can probably relate to the fact that landlords are busy people. It may be tough getting through to them. If the landlord or property manager has an assistant, ask what time of day is best to reach out so you can proactively try again.
Keep in mind that some rental properties may require you to send a rental history request form by email or fax along with proof of your applicants’ approval in order to obtain this information.
On-Guard Landlords
If they tell you only positive things about the applicants and neglect to mention negative things, that could expose them to legal risks for offering misleading half-truths. On the other hand, if they say negative things, the tenant could attempt to sue them for defamation.
This means that law-savvy landlords will request a copy of applicants’ written permission before they give out any information—and they’ll only offer you factual information they can back up with documentation, like rental terms, property locations, number of late rent payments, and the like.
Offloading Landlords
Some landlords may want to rid themselves of current problem tenants. If these landlords aren’t legally savvy, this desire to offload tenants may lead them to offer you only positive information.
Fake Landlords
Sometimes, applicants put down fake references—friends or family members who are willing to pose as landlords. If applicants have had rocky relationships with their prior landlords, they may not want to give you their complete rental histories. If this is the case, there are a couple of ways you can assess if they have given you fake landlord references: (1) use public property records to research the referenced property and its listed ownership before calling the landlord and asking the landlord about anything that doesn’t seem to make sense from your research, and (2) keep your questions open-ended and ask property-specific questions that you can verify on your own.
How To Check Rental History on TenantCloud
Now that you know what to generally expect during these calls and how to prepare for them, you can place them confidently. If you want to save time, you can purchase a tenant screening report through TenantCloud that includes these services, and they can take the time-consuming task of verifying your tenants' rental history, along with the entire background check research, off your plate.
As always, be sure to check your local laws to understand any area-specific nuances that may differ from this information.
Conclusion
Jumping into tenant screening, especially checking out a potential renter's past, is super important for landlords who want to find tenants they can count on.
Here is a quick overview of what has been covered in this article:
Tenant Screening Importance
- Essential for finding reliable tenants.
- Requires careful attention, finesse, and tenant's written consent.
Methods for Completing a Rental History Report
- Direct Communication with Previous Landlords
- Offers factual insights into tenant's reliability and behavior.
- Using Property Management Software (e.g., TenantCloud)
- Automates and streamlines the screening process.
Combining Manual and Automated Techniques
- Blending both methods can provide comprehensive insights, helping in making informed decisions about prospective tenants.
As discussed in the sections above, multiple methods are available to complete a rental history report. You could opt for direct communication with previous landlords, which offers invaluable insights into the tenant’s reliability and behavior. Or you can use a property management software platform like TenantCloud to automate and streamline the entire process.
Or, you may find that, like many other property owners and landlords, blending manual and automated techniques to vet the rental history of your tenants will give you the insights you need to make an informed decision.
