Tenant screening uncovered DUI's, jail time etc

[Rick Bassett]

Hi All,

Looking for a sanity check here with a potential tenant.

He called on a property, loved it with 2 minutes of walking through it (almost no one loves this property as it has a strange floor plan) and emailed his rental app within a hour. Called me a few hours later looking for a quick approval and said he had a check to drop off. I pushed him back so that we could do a proper screening.

The initial screening (Google) turned up that he was arrested for several DUI's. After a little digging we were also able to find out that he did several 30 - 90 days stints in jail for charges related to these DUI's including violating probation and driving with a suspended license.

I'm inclined to turn him down for the reasons above plus he is self employed 45 minutes from here and has no drivers license to legally get to work.

What would you do?

Rick

[Anne Graviet]

Bottom line is you need a tenant who pays rent on time and doesn't thrash your property, regardless of their present and past history - you need to bank on their future as a tenant.

It's illegal to deny based on prison time. They've paid their debt to society. Often they have terrible credit so it's not usually an issue, but your guy is the exception.

So what you need to do is make a judgement call. Great people w/great jobs & great credit can get laid off tomorrow and you've got an eviction that you didn't expect.

In contract, some struggling people who have nearly lost everything recognize this is their last chance and their only hope, so they don't blow it.

You have to decide if this tenant is going to make the best of his last chance or if he's the type of person who blows up every good opportunity that comes his way.

[Steve Babiak]

Originally posted by Anne Graviet:

....

It's illegal to deny based on prison time. They've paid their debt to society. Often they have terrible credit so it's not usually an issue, but your guy is the exception.

...

Anne Graviet - please post your reference source for that statement, because IMO you are not correct in saying this. It is illegal to deny based on individuals being in a protected class, and convicts aren't in such a class. Imagine having to rent to a sex offender - that is somebody who "paid their debt to society" ...

[Anne Graviet]

My source is my training in Property Mgmt when a sex offender applied for an apartment and my manager said what I wrote above.

[Rob K.]

Originally posted by Anne Graviet:

My source is my training in Property Mgmt when a sex offender applied for an apartment and my manager said what I wrote above.

Are you saying that sex offenders are a protected class in California? I live in Michigan and it's perfectly legal to deny a person because they are gay. I can't see the day when a sex offender has to be rented to.

[Anne Graviet]

I'm saying that I was trained that it's wrong to deny based on a criminal record - they've paid their debt to society. Landlords need to rent to the best qualified and the best qualified is the person with the most motivation not to screw things up inside your rental.

My worst tenant had the best application I had ever seen - my best tenant was homeless and jobless until I rented him an apt and gave him $10 for gas so he could go get a job, which he did.

[John Thedford]

Anne Graviet denying on a basis of criminal history? Is that a state law? I have read some of the federal guidelines and not seen that. I cannot imagine being forced to rent to someone that ran a crack house or meth lab out of a house they rented. Crazy! BTW--"wrong" is not illegal and some may have a different view of wrong and right. All my tenants money is green ..as long as they are paying.

[Seth Williams]

Rick B. - most people seems to be voting for "deny", and while they may be onto something... I just thought I'd weight in and play the devil's advocate here - because there is another perspective to keep in mind on this kind of thing.

As a commercial real estate banker, I've dealt several borrowers who have had past DUI issues, jail time, and other various misdemeanors (even a few felonies). Even so, we still got them approved and they have been successful borrowers with no payment issues, no legal problems, and nothing that interfered with their ability to pay us back. To date, they ALL have several years of successful payment history with us... so I know it isn't a coincidence (the whole "only a matter of time..." issue hasn't yet happened for us).

I should also mention that our loans are backed by the U.S. Small Business Administration, so even the federal government has taken a close look at these individuals and approved them in spite of their past issues.

In order to give these people the "OK", we require detailed documentation on their past offenses (with supporting court documents as proof), when they happened, how long ago they happened, and a thorough explanation of why it happened (and why it won't happen again). In some cases, we even obtain a fingerprint card which they fill out at their local police station, which we submit it to the FBI for review.

It can be a long, drawn out, and even cumbersome process - but all this to say, there are ways to work with people who have past issues. A history of legal problems doesn't necessarily mean they can never be trusted, it's just a matter of understanding what happened, and getting reasonable assurance that it won't be an issue going forward (as much as you can, anyway).

Is there risk? Of course. There is always risk - even with people who have a clean record. All of the deadbeat tenants I've ever dealt with have had clear background checks, so I'd just encourage you to think critically and be sure to look at your applicants from all angles.

[Steve Babiak]

Seth Williams - that's too much BS to go through for a tenant, when there are LOTS of other tenants that won't make the landlord jump through all those hoops.

[Anne Graviet]

Originally posted by John Thedford:

Anne Graviet denying on a basis of criminal history? Is that a state law? I have read some of the federal guidelines and not seen that. I cannot imagine being forced to rent to someone that ran a crack house or meth lab out of a house they rented. Crazy! BTW--"wrong" is not illegal and some may have a different view of wrong and right. All my tenants money is green ..as long as they are paying.

I was wrong, it's not "illegal" but you're flirting with big trouble if you do. When you start running criminal background checks on applicants and denying based on what you find, you're opening up potential Fair Housing violations.

For instance, if you deny for DUI but not for car theft. Or if you deny for 3 DUIs, but less than 3 is ok. Once you start denying for this crime or that crime, a tenant could say that you denied based on their color, for example. But you didn't deny for color - you denied for their record but the tenant feels that you're not being truthful and you're using that as a cover up for being racist and now you've got a Fair Housing case opened up on you.

It's best to deny for credit, income, and prior rental history and keep it to that only.

Don't get too worried about crackheads and meth labs - like I said before, those people do not have good credit and you deny for that reason. OP's fellow seems to be the exception with his good credit and jail history and that's incredibly rare. I've never seen it in my career yet but I suppose it's possible.

[Steve Babiak]

Anne Graviet - Fair Housing offers training events; I'm attending in my area later this month, and I had been to a prior training from them a few years back. Might be time for you to consider the same. Better to get it straight from their training than from an intermediary that might get things twisted. So long as you have your requirements on criminal background in writing and always follow your written requirements, there is no Fair Housing gotcha.

[Anne Graviet]

May I please see a copy of your written requirements Steve? I don't need the whole thing - just the part about criminal records and denial.

[Joel Owens]

Often times things get taken out of context from the source. Go look up the Federal and State statutes.

That's what I read in my spare time to get answers on things. Even with the statutes there are grey areas.

When you own a building and rent to people you are playing the percentages. People with an undesirable history have a higher chance of repeating again. If you want to rent to them just increase a non-refundable deposit to cover the risk.

If they have a story about they only have the first months rent it's probably because they just stiffed another landlord somewhere else.

[Steve Babiak]

Originally posted by CRIMINAL HISTORY criteria:

Criminal history will be checked. Any applicant with a record of a violent crime(s), or who has been charged with a violent crime felony will be automatically declined. This includes any applicant with a violent crime felony conviction(s), deferred adjudication of a felony violent crime, or who has been charged with a violent crime felony. This also includes any terrorism related convictions or charges. Any applicant with a non-violent felony or felonies convictions, deferred adjudication of a non-violent felony or who has been charged with a non-violent felony will not be accepted if they are within the past ten (10) years. Misdemeanors against persons or property, including prostitution and/or drugs, within the past five (5) years will not be accepted. This includes misdemeanor convictions, deferred adjudication of a misdemeanor(s), or an applicant who has been charged with a misdemeanor(s). Any person convicted of crimes of a sexual nature, designated as a sexual predator/offender, or under consideration by any court for being declared a sexual predator/offender will not be accepted ever. Our decisions are based on the information provided by an outside agency at the time of application We are not responsible for inaccurate information obtained. We consider a match to have occurred when both name and date of birth on the records are the same as the applicant.

After posting that (and reading through it), some revisions are under consideration. First, cases that are not adjucated but have reached expiration of statute of limitations will not automatically be rejected. Second, convictions where there was a pardon based on evidence exonerating the convict will not be automatically rejected.

And some of that wording could be more concise ...

[Seth Williams]

I agree Steve Babiak - I guess it was just my long-winded way of saying that past issues shouldn't always equate to an automatic "No." This situation probably is an easy answer, but I know that good tenants aren't always abundant in all market conditions, and some prospects are worth the extra work if it's a the start of a long term, profitable business relationship.

[Dawn Anastasi]

Originally posted by Rob K:

I live in Michigan and it's perfectly legal to deny a person because they are gay. I can't see the day when a sex offender has to be rented to.

Rob, being gay and being a sex offender is not the same thing.

[John Thedford]

Anne Graviet certainly offenses vary by nature. Also, one offense versus a continuing pattern of criminal behavior is something to consider. I personally would not deny for a DUI but I might if they had 3 or more. Also, any criminal activity that was undertaken using a residence would certainly be grounds for me to deny such as running a meth lab, illicit drug distribution, prostitution, etc. I don't want the police storming my property and damaging it while conducting a raid, etc. Also, collecting rent from a tenant in jail probably isn't going to be successful. Why not wait for an applicant that doesn't give you that "should I" feeling?

[Anne Graviet]

Originally posted by John Thedford:

Anne Graviet certainly offenses vary by nature. Also, one offense versus a continuing pattern of criminal behavior is something to consider. I personally would not deny for a DUI but I might if they had 3 or more. Also, any criminal activity that was undertaken using a residence would certainly be grounds for me to deny such as running a meth lab, illicit drug distribution, prostitution, etc. I don't want the police storming my property and damaging it while conducting a raid, etc. Also, collecting rent from a tenant in jail probably isn't going to be successful. Why not wait for an applicant that doesn't give you that "should I" feeling?

Best practice, and the cheapest, is to check income, rental history, and credit only. It keeps you out of the Fair Housing office, explaining yourself that it was criminal and not color that caused the denial.

My experience as a legal secretary (criminal defense) taught me that high-powered, notable men such as lawmakers and elected officials often have their cases for pedophilia and drunk driving filed against them as "John Doe" to protect their identity and preserve their status as Pillars of Society.

[James H.]

I have a tenant landscaper. His company keeps their people busy in the winter hanging and taking down Christmas lights among the other odd winter jobs that get called in.

[Mike Franco]

pushy applicant wanting to rent today?

hell no.

If they are consistently in jail for long periods, you're not going to get your rent.

[Jon K.]

Originally posted by Anne Graviet:

I'm saying that I was trained that it's wrong to deny based on a criminal record - they've paid their debt to society. Landlords need to rent to the best qualified and the best qualified is the person with the most motivation not to screw things up inside your rental.

Huh?

I've never heard of "criminals" being a protected class in rental applicatians.

Race, religion, disability... yes. Criminals? No.

[Jon K.]

Originally posted by Anne Graviet:

It's illegal to deny based on prison time.

Ummm, no. No, it's NOT.

Criminal history is not a protected class in rental applications. That would be absolutely NUTS.

Rental companies can deny based on criminal history, and often do.

Employers can deny based on criminal history also.

[Jon K.]

Originally posted by Anne Graviet:

Best practice, and the cheapest, is to check income, rental history, and credit only. It keeps you out of the Fair Housing office, explaining yourself that it was criminal and not color that caused the denial.

You CAN deny based on criminal records.

Check income, rental references, credit, AND criminal records.

Set your standards, whether that's no felonies and no misdemeanors. Or, just no felonies. Be consistent. Nothing requires you to rent to criminals. Have a rental policy on what, if any, criminal records are allowed, what charges, and within what time frame. Be consistent with all denials and your rental criteria. Don't change criteria for one person... be consistent across the board and follow your written rental criteria. If you want to deny all criminals, deny all. Keep records of all your denials and the verifiable reasons why, whether the denials are based on criminal records, credit, or other allowed denial reasons. If you want to deny anyone who has ever had a misdemeanor or felony in their lives and do a background check on ALL applicants and deny ALL people with criminal records, you can.

[Rob K.]

Originally posted by Dawn A.:

Originally posted by Rob K:

I live in Michigan and it's perfectly legal to deny a person because they are gay. I can't see the day when a sex offender has to be rented to.

Rob, being gay and being a sex offender is not the same thing.

That's not at all what I was saying. (After re-reading it, I can see how it would come off that way). I was using that to compare that I can't see the day when criminals are a protected class and gay people are not. Sorry if it came off wrong. I think the other person is way off to say that criminals are protected.

While I don't discriminate against gays, I do discriminate against criminals and people with several different occupations. All perfectly legal. You can also discriminate against pets, bikers, etc.

[Dawn Anastasi]

Rob, glad you clarified.

Federal law prohibits housing discrimination based on your race, color, national origin, religion, sex, familial status, or disability.

Different states may also include sexual orientation. WI added the sexual orientation discrimination prohibition in 1982.

[Timothy W.]

Seems he has a hard time being entrusted with a driver's license and you want to know whether or not to entrust him with a $100,000 piece of real estate?