Question for landlords: Do you get calls for reference checks?

Question

I just recently had tenants move out of one of my single family homes. They were great tenants for the 6 years they were with me, paid on time, give 30 days notice prior to moving, etc.

What struck me was that their new landlord never called for a reference prior to agreeing to rent to them. The more I thought about it, I realized that I have NEVER had another landlord call me for a reference on any tenant who has ever rented from me in all the years I’ve been a landlord.

I ALWAYS call previous landlords when screening applicants. The current landlord may not be completely honest as he may just want to get rid of a problem tenant, but past landlords can be a great source of information because they have no reason to lie.

I would have given a good reference to these most recent tenants, but there have been 1 or 2 others that would not get good references (and the landlords that don’t bother calling are doing themselves a disservice by not getting that information from me in my opinion).

Anyway, I’m curious, do other landlords out there get calls for reference checks on their tenants? Or, for that matter, do you do them yourself? And if you don’t, why not?

Patricia Steiner · Answer

There's been a lot of discussion on this topic online. If a tenant was a "problem," more than likely he/she will make-up a reference or have you call someone who is actually a friend. Many PMs will not give a reference without an executed consent form and many landlords are now using online reference tools like Modern Landlord References. I find it's just as important to google the past rental address; sometimes it's bogus too. I've never received a reference call...it's been my experience that "bad tenants" have a whole host of indicators that show-up even in the most basic electronic screen. Reference calls are just part of a larger screening toolbox we use. Tenant quality is something we don't compromise on ever. Thanks for launching this important discussion.

Steve Vaughan · Answer

I receive them, usually from PMs. If it's a PM that normally requires me to fax over a signed consent form and put my questions in writing when I screen I remind them I am doing them a solid over the phone and expect it reciprocated in the future. Who has time to fax? Yep, I'm often amazed references aren't checked more often. It is rare I get called. Keeps me purchasing from motivated landlord sellers that don't learn :)

Kyle J. · Answer

@Jeff Willis There's a few differences between calling rental references and employment references. For one, if your applicant for a job works at Target, it's pretty easy to look up the phone number for Target (even if the applicant gives you their supervisor's cell phone number) and get ahold of someone in a position to verify their employment. Not so much when you have an applicant for a rental property and they rent from another single family landlord (as opposed to a large property management company). And asking only the one question you suggest (Would you rent to them again) isn't going to help you determine if the person you're speaking with is the actual property owner or their friend or family member posing as the property owner. You have to ask more probing/informative questions to get to that. Personally, I'm not worried about being sued for asking/answering questions that just stick to the facts. (Technically, I'm not answering any questions though because I've never been called, but if I was I still wouldn't have a problem answering questions about the facts of the tenancy.) My questions are just about the objective facts -- What was the address the tenant rented from you? What dates did the tenant reside at your property? What was the rent amount? Did the tenant ever have any returned checks due to non-sufficient funds? Does the tenant currently owe you any money? Things like that. I also wouldn't have a problem answering those same questions, and I wouldn't for one second be worried about getting sued because I did answer those questions. And maybe there's others out there, like you, who don't want to share information for whatever reason. That's their right. But if you don't ask, you'll never know, and you could be missing out on some good information from people like me who are willing to share. Just something to think about.

Jeff Willis · Answer

I (my management company) has been called for a reference, and we have called previous landlords, and by asking one question, we get all the information we need. Basically, references are useless and providing a bad reference will get you sued. You can find out all you need to know from other sources. I am deviating a little off your question, but this is an important topic. I have been in the rental & rehab business for over 40 years. I am also the CIO of a large multi-state corporation. I am saying this because I want to give a little perspective of who I am and why I will be answering the way I do. Whether it is prior rent locations on a rental application or previous employers on a resume, it makes no difference; it all comes down to liability. If you are asked for a reference and you provide anything that can be construed as unfavorable and it is perceived that they were unable to rent because of that reference, you open yourself up to liability may very well be sued! Same in employment. If we give a reference that is the slightest bit negative, we open ourselves up to liability, and it is a ‘non-winner.’ Even if you win the case, you lose in the time, costs, and aggravation. Our corporate employment law attorneys have provided guidance, and my real estate attorney has blessed this guidance. The guidance is: When providing a reference, you can answer only one question: “is xxx subject to rehire.” When providing a reference for a rental, you can answer only one question: “would you rent to xxx again.” So, if someone calls you for a reference, regardless of the questions asked, your reply should be, “are you asking me if I would rent to them again?” Then answer accordingly If you calling for a reference, explain that you are not calling for a reference, and say, “I just want to know, would you rent to them again?” You don’t need to know anything more and you don’t need to provide anything more.