Screening for commercial tenants

[Kai G.]

Hiya,

I'm renting individual rooms in an office suite. The tenants are professionals in the beauty and wellness space. They each operate through their own (small) companies. I have never screened, and have recently had some bad experiences with tenants not paying and breaking leases. I'm wondering if I can screen these people as individuals and use the "data" from a background check by Zillow or others in my decision making process. I would think you can draw parallels between personal financial responsibility and that of the person's business. Of course if the background check come back with anything criminal I will use that as a disqualifier. What do you all think?

[Carlos Hennings]

Great question—and you're definitely not alone in dealing with these kinds of challenges when leasing commercial space to individual business operators.

Yes, you can and absolutely should screen these tenants, both as business entities and as individuals. In cases like yours—where tenants operate through small companies—it’s important to screen both the business and the person behind the business to get a full picture of risk.

Here’s a best-practice approach:

1. Run a Commercial Credit Report on the Business

• This helps assess the company’s creditworthiness, history of financial responsibility, and any patterns of late payments or defaults.

• If the business has limited credit history (common with smaller or newer companies), you’ll want to lean even more heavily on personal screening.

2. Run a Consumer Credit Report on the Personal Guarantor

• Since you’re likely having them personally guarantee the lease, it’s completely appropriate to pull a standard tenant background check on the individual.

• A personal credit report can reveal recent delinquencies, collections, or financial strain that could carry over into the business.

• Also consider running a criminal background check and a separate Judgments & Liens search—these no longer appear on credit reports but can show past legal or financial disputes, unpaid rent, or damages from prior leases.

3. Use Verified Income Reports Instead of Paper Statements

• Paper bank statements, tax returns, or pay stubs are often forged or manipulated. Look for a screening solution that verifies income directly through bank or payroll data.

• This eliminates guesswork and gives you a much more reliable view of their ability to pay.

You're also right to assume that personal financial behavior often reflects how someone runs their business—especially in sole proprietorships or small LLCs. Combining commercial and individual screening gives you the best shot at avoiding the non-payment and lease-break issues you’ve experienced.

If you’re using a screening service, make sure they support both business and individual checks, and that they include things like verified income and Judgments & Liens, which aren’t always standard.

Hope this helps—you’re on the right track in tightening up your process.