How a landlord responds to a caller regarding an ad for a rental vacancy or welcomes a visitor to an open house showing can make a difference in the prospect’s interest in moving forward to the application stage. The caller’s or visitor’s answers to a few crucial screening questions can help the landlord determine if there is good indication that the prospect could qualify to the landlord’s rental standards and that an application should be pursued. Both landlord and prospect use the first contact between them to determine mutual interest and qualification.

When a landlord pre-qualifies a prospect, the objective is to determine as quickly as possible in a professional manner whether the prospect is a viable candidate for tenancy with potential as a good long term tenant. Some landlords feel that pre-screening a prospect is an awkward procedure and prefer to let the prospect ask questions. A landlord should keep in mind that filling a vacancy with a qualified tenant is all important to his business. Information gathering, as long as it is done legally and with full knowledge of applicable laws, particularly fair housing laws, is important to selection of a good tenant.  A few questions can be well worth the effort in order to better protect the rental investment by reducing potential risks.

The prospect in turn should have a few questions to ask the potential landlord. The print advertising should have provided basic information about the rental unit – address, number of bedrooms and baths, monthly rental amount, and the required security deposit. Many prospects have already self-qualified themselves by reading the advertised information and assessing whether the rental unit fits their needs. Most prospects will need to physically walk-through the unit before making a preliminary decision to apply. The prospect may question the landlord to determine if the advertised information is true as advertised and to ask what the landlord’s policies and procedures are for tenant qualification, selection, and residency.

Some callers or visitors are interested but not interested enough to move forward to application. Some callers or visitors are genuinely interested but cannot qualify to the landlord’s rental standards. Without a plan in place for pre-screening prospects, a landlord may waste time on those individuals just looking or risk being caught unaware that the interested prospect is a half-step away from a pending eviction.

Pre-screening is the initial qualifier to advance the prospect to the next step of completing an application. An applicant will need to be screened to tenant screening policies, including credit history, rental history, background and criminal history, employment/income source, landlord references, and personal references.

With thorough and adequate screening at each stage of the rental process, a landlord can reduce the potential risk of installing a bad tenant. Prospects that have something to hide can quickly assess the situation and decide to move on. Having clear, written rental standards and uniformly enforcing rental policies is a good business practice.

Whether the initial contact is by phone or in person, it must not be used as a means to screen out prospects by asking leading questions or stereotyping prospects by language and speech patterns or by any other characteristic that is forbidden by federal, state, or local fair housing laws. Such practices are illegal.

What questions should a landlord ask? Asking questions that help to determine the prospect’s rental situation should provide enough information to determine if there is a match between what the prospect is looking for and the landlord’s property and policies. In all communication with prospects, a landlord should be business-like but friendly enough to encourage the prospect to give consideration to completing an application.

The following questions are some of the most commonly asked questions during the initial contact with a prospect. Other questions may be asked as they pertain to the landlord’s business and rental market.

“When do you plan to move?”

Typically a landlord’s lease agreement requires a minimum of 30 days’ notice of tenant move-out. A response that the prospect wants to move in immediately or within a period less than 30 days could signal a problem for any number of reasons. Moving on short notice could be as a result of employment relocation or family matters but could be as a result of poor planning by the tenant. Responses that suggest the prospect has a pending eviction, past due rents or other lease violations at his current rental should be a red flag notice to the landlord. If the prospect is considering a future move-in date greater than 90 days or is somewhat vague about a future move date, the prospect may not be a serious candidate for tenancy.

“Why are you moving?”

A landlord can learn a lot from the prospect’s response to this question. Typical responses are to get more/less space, be closer to work or school, live in a better neighborhood, a job relocation, family responsibilities, more affordable housing, or to avoid traffic or noise issues. If the prospect gives evasive answers or vague reasons that suggest a problem with his current landlord or neighbors, the landlord may want to more fully explore the prospect’s stated reasons for moving. It is usually a red flag and definitely something to consider if the prospect has a long list of complaints about his current landlord and neighbors. There may be reasons the prospect needs to move.

“Will you have any problems completing the standard application process?

The landlord should explain to interested prospects the landlord’s application and screening process that includes personal interviews, written application, background screenings, and landlord conducted verifications for identity, employment, income-to-rent ratios, rental housing history, and references.

If there is hesitation on the prospect’s part to agree to all or part of customary screenings, there could be any number of possible negative findings when screenings are conducted. If the prospect cannot agree to stated rental policies, the landlord may decline to go forward with the application process.

“Do you have the necessary funds for move-in?”

The landlord should explain the application process including fees due at application submission such as application fee, tenant screening fees, etc. Additionally, the landlord should provide the amount of funds due at lease signing including first and last month’s rents, security deposit, pet deposit if applicable, etc. The prospect should be made aware that possession of the rental unit will not be given unless all applicable fees, deposits, and rents are paid per terms and conditions of the lease agreement. If the prospect counters with alternative arrangements, such as payment installments, the landlord should be prepared to answer according to applicable landlord-tenant statutes for his state, and his previously stated business policies and practices. It may signal a red flag to the landlord if the prospect is not prepared to pay required move-in funds.

“How long do you plan to rent?”

Most landlords are looking for a stable, long-term tenancy, typically a one-year lease agreement. A response that indicates that the prospect will give notice as soon as he buys a house is not favorable to the landlord’s interests. Many landlords do offer month-to-month rentals, shorter-term multi-moonth lease agreements, or are willing to structure a lease to coincide with a school term. A response such as “it depends” may indicate a prospect isn’t committed to a firm decision for moving or has other issues that the prospect is unwilling to share with the landlord.

“How many people will be living in the rental property?”

Landlords set occupancy limits based on regulations and codes set by local building, structural, health, and safety standards as well as limitations set by property size and mechanical/system/utility constraints. A maximum number of occupants for square footage space may be specified by local ordinances. If the number of potential occupants exceeds recommended standards or the prospect indicates an uncertainty regarding the number of occupants (i.e., it varies), it could be a potential red flag for the landlord.

“Can you provide employment references and proof of income?”

A landlord must determine to the best of his ability that the prospect can prove a steady source of income and sufficient income to pay his rent. If a landlord requires an applicant to have a gross monthly income three times the monthly rental amount, a prospect needs to know that upfront. If the prospect is currently out of work but expects to have a job soon, or the prospect has held a number of jobs in relatively short time or appears to change jobs or types of jobs frequently, this could present a problem for qualification as an applicant.

“Can you provide previous landlord references?”

A landlord should require an applicant to provide rental housing history previous to his current landlord. Reference checking with previous landlords is an important part of tenant screening. The landlord will want to find out how well the former tenant paid his rent and generally performed according to the lease agreement.

If a prospect cannot supply satisfactory previous landlord references, it can signal problems. If a prospect asks this current landlord not be contacted, it could be for reasons such as lease violations, past due rents, pending evictions, etc.

It is a good business practice to keep written, dated documentation of all responses to the advertising of a rental vacancy, including the corresponding action that was taken, such as application submitted, prospect declined to apply, or the prospect did not qualify to stated rental standards, and the address/unit number of the advertised vacant rental unit, to help defend against possible claims of discrimination at a future date.

In summary, pre-screening a potential tenant is a risk management measure that saves time and money for a landlord in the overall qualification and selection process of a good tenant.

The rental agreement between landlord and tenant is a legal contract setting out landlord and tenant responsibilities and obligations in the same manner as does a lease agreement for a fixed-term. The landlord is obligated to offer and maintain housing in a safe and sanitary condition under the implied warranty of habitability.

The landlord is obligated to protect the tenant’s rights to quiet enjoyment of the rental premises. The tenant is responsible to keep the rental unit in good condition and to pay rent as set out in the agreement terms and conditions.  The time frame of the tenancy is the difference between the two types of landlord-tenant agreements.

An important issue is to make sure you understand your state’s landlord-tenant statutes regarding rental agreements, particularly notice requirements to change or terminate a month-to-month tenancy. While some states do not have a state statute on the amount of notice required to change rent or other terms, in general the amount of notice that a landlord must give to increase rent or change another term of the rental agreement in a month-to-month tenancy is the same as that required to terminate a month-to-month tenancy. If the rental unit is governed by state and local rent control laws, there may be different notice requirements.

Note that the amount of notice may also depend upon which party, landlord or tenant, gives notice to end the tenancy. There may be different notice requirements if the tenant has violated terms of the rental agreement, e.g. failure to pay rent.

Offering a month-to-month rental agreement can be advantageous for a landlord in certain circumstances depending upon the landlord’s business plan, area market conditions, and tolerance for risk.

A month-to-month tenancy is automatically renewed each month unless the landlord or tenant gives the other party the proper amount of written notice, typically 30 days, to terminate the agreement.

The most frequently mentioned advantage of a month-to-month agreement is the flexibility and control that it offers landlords.  The flexibility of a month-to-month agreement allows a landlord to quickly adjust to market conditions, notably if rents are rising, the landlord does not have to wait until the end of a tenant’s fixed-term lease to increase his rents. In many states the landlord can notify a tenant of an upcoming rent increase with only 30 days’ notice. Terms and conditions of the rental agreement can also be changed for business necessity (subject to any restrictions of local rent control ordinances) as long as the required notice is given to the tenant.

A landlord has the flexibility to set his rents at a higher than market rent to compensate for a perceived higher risk of vacancy in the near future. Tenants who seek month-to-month rentals do so for a reason and the ability of a landlord to provide rentals of this nature can often attract rental prospects to the landlord’s properties. A potential renter may want the benefit of a month-to-month rental for purposes such as a vacation stay, short term housing due to job assignment or family considerations, being new to the area and wanting to become familiar with local housing options, actively looking to purchase a home in the near future, waiting for new home construction to be finished, needing temporary housing until major renovations to their residence have been completed, military temporary duty station, roommates adjusting to co-tenancy living, seasonal work, change in financial situation, or for many other and varied reasons. A tenant with possible changes in his future living arrangements may feel that a month-to-month agreement offers a greater benefit to him by the fact the tenant will not have to break a fixed-term lease when his circumstances change and the tenant must move on.

A landlord has more immediate control of his property if a tenant fails to comply with rental terms and conditions. A landlord can initiate termination of a month-to-month tenancy by giving the required legal notice to end an unsatisfactory landlord-tenant relationship before it becomes a more costly legal action for eviction. The eviction process through the court system for a material violation of a fixed-term lease condition can take months. Control of the situation and the return of possession of the rental unit can be accomplished within a short time if the tenant has a month-to-month agreement.

There are downsides to a month-to-month rental agreement. Most commonly a landlord will hesitate to offer a month-to-month rental agreement because of the perceived risk of constant tenant turnover, although even with a fixed-term lease, a landlord has no guarantee against tenant turnover. Not only can a landlord terminate the rental agreement on fairly short notice, the tenant is also free to terminate his tenancy with adequate notice. The rental unit could be turned over several times a year. A landlord will need to be prepared to handle a vacancy quickly and efficiently once notice by either party is given to terminate the tenancy. The amount of preparation needed to restore the unit to good condition will of course be dependent upon the circumstances.

Some landlords believe that a tenant with a fixed-term lease agreement will take better care of a rental unit than would a tenant with a shorter period rental agreement. However, if the landlord always conducts adequate tenant screenings and selects a qualified tenant each time to fill a vacancy, no matter what the period of the term, the landlord will be better prepared to help protect his property from damage and his current tenants from risks.