Tenant screening is used by property managers and owners to find responsible renters. It is a cost effective approach to limiting financial liability for property owners. It provides an ability to screen out potentially harmful or disruptive tenants.

For a list of all state laws regarding tenant screening, go to:

• http://www.rentalprop.com/ltlaws.htm

Or visit the Federal link at:

• http://www.hud.gov/

How Tenant Screening Works

Opinion from FTC regarding use of databases in employment or tenant screening

Typically evaluate prospective renters using three types of data:

• Credit Report
• Criminal background search
  (either statewide or county by county)
• Eviction History
• Reference check from former landlord

Criminal Records

• May search all addresses of applicant up to a seven year limit
• Search can be conducted statewide or county by county

Eviction Records

• Records are gathered from individual counties
• Will report all records that show up for an individual for a seven-year span

Concerns about the type of information found on eviction records

• Reporting of possible or potential evictions for people with common names
• Reporting of all eviction records, regardless of court outcome
• Eviction cases that are dismissed or resolved appear in public records

Tenant screening and the Fair Credit Reporting Act
For more information about the Fair Credit Reporting Act, click on the following link: www.ftc.gov/os/statutes/fcra.htm

• Tenant screening reports are covered under the FCRA
• Under the FCRA, screening agencies are required to employ procedures to assure accuracy
• Dictates what information can/cannot be included in a report
• Outlines procedures for disputing accuracy and the duties of those who use consumer reports

Tenant screening agencies and the FACT Act

• Designed to increase accuracy of reports and to help combat identity theft
• Consumers have a right to obtain their credit report free of charge every year
• This provision does not cover the information reported by tenant screening agencies beyond the credit report

OFAC Search

The federal government now requires a search of all applicants under the OFAC act. Under the Patriot Act (PL 107-56), OFAC keeps the list of "specially-designated nationals" and "blocked" persons on its public-access Web site. A website search is available at http://www.treas.gov/offices/enforcement/ofac/, although many property managers may choose to include it as part of the tenant screen.