Fraud Prevention Practices
To help protect his business from tenant fraud, a landlord should, at a minimum:
- Have full understanding of landlord-tenant statues, local ordinances, and fair housing protections.
- Be prepared to pre-screen potential applicants when they respond to an advertised vacancy; make notes of information discussed and save for later reference as needed.
- Meet the prospect in person and require proof of identity before showing a property.
- State rental policies, rules, and regulations and advise prospects of rental qualification standards and tenant screening policies during the initial contact.
- Require applicants to appear in person to complete and submit application – only the landlord’s rental application form should be accepted.
- Accept only fully completed applications; missing or illegible information is a potential red flag which will require explanation or investigation
- Never accept an unsigned application and compare with the signature on a photo ID.
- Require personal interview with applicant.
- Require all proposed adult occupants of the rental property to be tenant screened and qualified to standards.
- Require all adults occupying rental property to be named on the lease agreement and made joint and severally responsible for the lease.
- Require applicants to furnish two forms of personal identification, with one document containing a photo identification signature at time of application.
- Require applicant to furnish copies of proof of employment, income source, utility bill, and telephone bill.
- Require applicant to furnish copy of driver’s license and vehicle registration.
- Advise applicant that supporting documentation must match the information on the rental application including name and address.
- Verify the applicant’s employment.
- Verify the applicant’s source of income.
- Verify the applicant’s past rental history with previous landlords.
- Conduct full tenant screenings as applicable by statutes and law.
Additionally, a landlord should allow adequate time for interview questions. Before the interview a landlord should review all documents – the application, supporting documentation, verifications, and consumer reports and note any discrepancies or flag items that need explanation or clarification by the applicant.
Landlords who know their business and take control of their business may be less likely to suffer financial loss from tenant fraud.