All Forum Posts by: Stephen White

Chris Martin Great points! I think the takeaway is to not live in a world of "absolutes"

Chris Booth I read your post and can agree with you on some points. I've carried the smartmove product as an affiliate for over 3 years now so I'm very familiar with the ins and outs.

Having said that, I think it's important to remember that each landlord has their own standards and criteria (although most are universal) and the product is a "one size fits all" solution. In the tenant screening industry smartmove is a power house because it owns the credit report market. Literally, its a Transunion product.

In EVERY case, more must be done than what smartmove and other screening products can provide alone. Smartmove can be a great start for the screening process as long as you know what ingredients to add to it to make your screening complete. The best example is the fact that smartmove does not provide eviction reports. The eviction may show up on the persons credit report, but as you found out thats not always the case. Especially seeing that evictions are filed sometimes as non-monetary judgments, this is a pretty big chink in the armor. But knowing this ahead of time can prepare you to include the eviction search from another screening company/site or do the search at the local court level yourself based on the tenants address history.

Now to specifically address your beef with smartmove. In it's defense, ordering your own credit report on a tenant screening platform cannot be done no matter the site or service. We get these requests all the time as well but it comes down to whats known as Permissible Purpose. Every inquiry on a credit report is coded. So if I go to a car dealer and they run my credit it will affect me differently than if I apply for an apartment. Or for a job. Some inquiries are soft inquiries that do not have an impact on your score and some DO have an impact on your score. The bureaus must identify the purpose of each and every inquiry to determine how it will affect your score.

So in the case of tenant screening and smartmove, you cannot access your own credit under the Permissible Purpose of tenant screening because you're not the tenant. Another great example is some of our larger property management clients require two Permissible Purpose codes so they can run tenant screening and employee credit checks for executives or those handling money. Two different purposes, two different codes.

As for the "disturbing" reality of the missing criminal information on the report I can tell you that you will run into this problem everywhere. Unless your screening company is using multiple databases searches to reduce the possibility of this happening, or you are running searches at the county level. The national searches like the one that smartmove offers is great because it covers the entire US. So if your tenant lives in NY but was arrested in CA, a statewide or county level search wouldn't pick it up. The true reality is that not every court shares their information with databases regularly. And at the end of the day, it still a human being that is entering the data so it's prone to obvious mistakes.

So the post is so long, this happens to be my specialty :)

Bill Gulleyand Kelly N. by the way, I specifically like your suggestions about gathering documentation and making copies of it. It does something to someones psyche knowing that you have all their information.

Chris Booth I agree with both Kelly and Bill with their criteria. You also make a good point about deterring overall interest. I think for the most part this depends on the unit and who your target audience is. If its higher end then a rigorous screening process will not deter as much as this is what they're accustomed to.

A good middle ground no matter the location/demand is to be upfront about the criminal and eviction searches that will be conducted. This typically does deter most with these kinds of records. However beware of the spouse and other occupants as well. I've seen so many cases where the spouse was the "fall guy" racking everything up in their name to leave one person with a clean record. So screen EVERY occupant over the age of 18.

Calling previous landlords (or having a screening company do this) is a must. Cross reference numbers to be sure they aren't friends and ask loaded questions that you already know the answer to, like "how much are they paying in rent, and how long have they lived there". If you have a no-blank-spaces policy on your rental app then you'll have this information on-hand.

Also be aware that the smartmove product does NOT include an eviction report. It will only reflect an eviction record if it appears on the credit report but there is not a nationwide eviction database search included in the report.

Roy N. I agree the Canadian regulations are similar. One major difference is the recent change to not allow US companies to access or resell Canadian credit reports. That was a tough blow for companies like mine located in Buffalo, NY since so many tenants and employees come across the border to live and work. But even when we could, and still with criminal records, the Provincial levels dictate price and turn-around times. And they're drastically different!

Hey Roy N. electronic delivery is fine. And I agree with you on your agreements with the bureaus but its not because they want to charge more to the consumer. They are obligated to send a FREE copy to the consumer (with the exception of postage).

Here is some of what the FCRA has to say about the use of adverse action letters:

§ 615. Requirements on users of consumer reports
[15 U.S.C. § 1681m]
(a) Duties of users taking adverse actions on the basis of information contained in consumer reports. If any person takes any adverse action with respect to any consumer that is based
in whole or in part on any information contained in a consumer report, the person shall
(1) provide oral, written, or electronic notice of the adverse action to the consumer;
(2) provide to the consumer written or electronic disclosure
(A) of a numerical credit score as defined in section 609(f)(2)(A) used by such person in taking any adverse action based in whole or in part on any information in a consumer report; and
(B) of the information set forth in sub-paragraphs (B) through (E) of section 609(f)(1);
(3) provide to the consumer orally, in writing, or electronically
(A) the name, address, and telephone number of the consumer reporting agency (including a toll-free telephone number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis) that furnished the report to the person; and
(B) a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken

John Chapman I just scanned through the FDCPA and the only exact language I could find relevant to this is the definition of a collection account. "A collection account is a delinquent or past-due account transferred from routine account to the collection department (or a collection agency)."

So by definition, if the tenant is "past-due" the account may be placed with an agency for collection.

I am checking with my contact at the collection agency that purchased mine to see if they can get something from the ACA that speaks specifically about placement. I don't think we'll get lucky enough to have anything specifically about the rental industry but maybe something relating to pre/post judgements. Although so far even he can't think of anything that specifically references this situation in the rental industry.

So for now all I can give is my experience and the hundreds of property management clients I sold my agency with that placed accounts without judgments. In fact, if the account DID have a judgement, we still made calls and collection attempts to execute the judgement but treated it no different than an account without the judgement in terms of curing the account. Most often garnishments and liens don't work or work fast, so the best remedy is often an agency that can constantly engage the debtor and commit them to a repayment plan.

I will keep you posted if I hear that the ACA has any specific guidance on this subject.

Remember that if you are denying an applicant tenancy based on their background check you must provide them with an Adverse Action Letter.

This also applies if you alter the conditions given to accept tenancy, ie. double deposit or 2 months rent upfront, if the decision is based on their credit or background check.

Using this form will keep you in compliance and put the responsibility on the screening company to communicate and correspond with the applicant if there are any issues.

All applicants/tenants have a right to receive a consumer copy of their background check regardless if they're denied or not.

David Luu are you sure they aren't asking for a copy of their background check and not just the rental application? I have NEVER had a applicant ask for the application back, but we get about 20 requests a day for the "consumer copy" of the background check at my tenant screening company.

If this is the case, then yes you are required to provide them with a copy of the background check. If you used a tenant screening company to conduct the background check then they should provide this free of charge.

Also keep in mind that if you are denying a person based on their background check, you are required to send them an Adverse Action Letter that explains they are entitled to a consumer copy of the background check and contact information for the screening company that you used. You do NOT need to specify a specific reason why they were denied. For example you do not need to mention that it was because of a bankruptcy or eviction. Just simply that the decision was based on the report and they can get a copy of it from here...

Most landlords do not use Adverse Action Letters but I strongly recommend the practice because in the past month I have seen 3 situations from HOME testers that cited landlords for non-compliance. Plus it makes the phone calls stop and keeps you doing the right thing so nothing could ever come back to haunt you.

Hope this helps.

Peter Moser we do these verifications everyday and I can tell you exactly what is required. A simple signature from the applicant authorizing the release of information. Thats it! 99% of rental applications contain some sort of language that will be acceptable. Even the FCRA (the rules that govern the verification and screening process) don't specify specific language that must be used.

So here is exactly what works for us 100% of the time:

I/we,the undersigned, authorize (Landlords name) and its agents to obtain an investigative consumer credit report including but not limited to credit history, OFAC search, landlord/tenant court record search, criminal record search and registered sex offender search. I
authorize the release of information from previous or current landlords, employers, and bank representatives. This investigation is for resident screening purposes only, and is strictly confidential.

If you want even faster responses include a pre-made questionnaire for them to fill out and fax/email back. The questions we include a YES/NO next to are

Is the tenant a current resident and on the lease?
Has the tenant or unit received noise or neighbor complaints?
Has the rent always been paid on time?
Was the unit in poor condition when/if the tenant has moved out? (good housekeeping concerns)
Has the tenant ever been evicted?
How long has the tenant resided there?
Would you rent to this tenant again?

They circle YES/NO and we provide a few spaces for them to add notes if they want to elaborate.

Some landlords choose to have the signature/authorization page of their applications separated so that when you fax for verification you only have to include the one page and maybe the questionnaire if you;re; using that. Hope this helps.