Prospective Tenants

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.

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