Rental data suggests that pet friendly housing may rent faster than properties with a “no pets” policy. In many rental markets there are a greater number of potential tenants that have pets than there are landlords who allow pets in their rentals. By advertising your property as pet friendly, you gain access to a larger applicant pool.

Studies suggest that pet owners are more likely to become long term tenants once they find a landlord who welcomes them and their pet. Pet owners can be more willing to pay a higher rent for a home that accommodates their family pet. The higher rent could result in a landlord being able to also collect a higher security deposit.

You will need to research your state’s landlord-tenant statutes to determine the requirements for security deposits, non-refundable fees, and rents. In a few states one can charge the tenant a pet deposit, pet fee, and pet rent. In other states one may be restricted in the types and amounts of deposits and rents that can be collected.

If allowed by statute and as covered in your lease agreement, you could charge a pet deposit in addition to the standard security deposit. A pet deposit is held as security to cover costs of pet damages or additional cleaning required to return the rental unit to good condition upon the tenant’s move-out. Accounting and return of pet deposit funds are handled in a similar manner as tenant security deposits.  If the pet deposit is designated as a pet deposit, you may only use the funds to cover pet damages and cleaning. If pet damages exceed the amount of pet deposit being held, you will need to look to the tenant’s security deposit to recover additional funds.

Some landlords choose to charge a pet fee which is a non-refundable fee payable at time of tenant move-in. The fee is an administrative cost to permit the tenant to have a pet in the rental unit.

Many landlords will charge a monthly pet fee which is in addition to the tenant’s monthly rent amount. Some landlords choose to charge a higher monthly rent that includes the pet rent.

A common practice is to charge a refundable pet deposit and a monthly pet rent.

However, there are potential risks to allowing pets in your rental units. Of most concern to landlords is property damage caused by pet behaviors such chewing, scratching, and marking interior surfaces such as carpets, wood flooring, and woodwork. Exterior landscaping can be destroyed by destructive digging behaviors. Pet odors and unsanitary conditions can create waste and nuisance problems.

Noise from animals can be disruptive to neighboring tenants and excessive noise may violate the neighboring tenants’ rights to quiet enjoyment of their rental units. Complaints may become more frequent if the noise and disturbance is not properly addressed by the landlord.

A landlord may have increased risk of liability for injuries and damage caused by aggressive behaviors of animals. Insurance coverages may need to be changed to provide greater protections against claims of injury or damage.

To help mitigate risk, a landlord should have a strong lease agreement, an adequately detailed pet policy, and utilize pet deposits, pet fees, and pet rent as applicable to statutes and as business necessity. Additionally a landlord should require all tenants to purchase renters insurance as a condition for tenancy. Regular inspection of rental units will help to identify and correct problem conditions in a timely manner and protect against collateral damage.

Your pet policy should be included in your lease agreement or referenced as a separate addendum to the lease. The document should clearly state your pet policy (whether allowed or not allowed) and the rules, regulations and restrictions you place on tenants and their pets. All adult tenants should sign the lease agreement and addendum acknowledging their consent to lease terms and conditions and that a violation of terms is considered a breach of contract subject to the remedies detailed in the lease including the legal action of eviction.

A landlord who has a “no pets” policy is still obligated under fair housing laws to accept an assistance animal in a rental unit as a reasonable accommodation request from a tenant with disability. A pet deposit, pet fee, or additional rent as pet rent cannot be charged to the tenant requesting the reasonable accommodation.

It is your call to decide if accepting pets makes sense for your business. If your competition accepts pets you may be missing out on business. If you adequately research your local market and applicable landlord-tenant statutes, you should be able to determine what the impact of changing your policy to allow pets would have on your business.

The rental application is a significant document between landlord and potential tenant. By completing the application, the applicant signifies his interest and intent to fill the vacancy if he, the applicant, is selected for tenancy. The applicant, by submitting his application, acknowledges and consents to the landlord’s stated tenant screening practices. The landlord by accepting the application commits to perform according to the stated rental policies in compliance with anti-discrimination laws, applicant consumer rights and the safety and security of the applicant’s personal information.

While there is an understanding between landlord and applicant, a submitted application is not a lease contract. A landlord is not obligated to offer tenancy to an applicant upon application submission nor is an applicant obligated to accept a landlord’s offer of tenancy at time of application submission. The landlord’s application process must be followed in its entirety until all applicants are screened and evaluated according to the landlord’s stated rental criteria.

Regardless of how well-qualified the applicant seems to be, how well an applicant presents himself, or how urgent the need to fill the vacancy, a landlord should not deviate from his rental standards. The vacancy should never be filled with an applicant who has not been tenant screened and has satisfactorily met  the landlord’s rental criteria.  Once an applicant has been allowed access to the rental unit either by transfer of keys or storage of personal items in the rental unit, the applicant immediately becomes a tenant. It will require legal eviction to remove the tenant from the premises and restore possession of the unit to the landlord.

A best business practice is to accept all requests for application and process the applications according to stated rental practices.  By pre-screening responses to an advertised rental listing, a landlord can provide details of the application process and required screenings to interested prospects. Prospects can self-evaluate whether they believe they can qualify to rental standards and then proceed accordingly in their search for rental housing.

A prospect’s decision to submit an application is a voluntary action. A landlord should not make an arbitrary decision to accept an application or refuse to take an application. By refusing to accept an application, unless there is a valid business reason, such as insufficient income to meet the income to rent ratio, a landlord can open himself to claims of discrimination or create an emotionally charged situation whereby all parties may later regret their actions. Determination of qualification under rental standards should be conducted after all applications have been submitted within a specific time period.

A rental application allows a landlord to collect and organize applicant supplied information. A landlord must request sufficient information to adequately screen the applicant for business risk. As a general rule, a landlord can request any information that would objectively point to the applicant’s ability to pay timely rent and comply with lease terms and conditions. A valid information request could require copies of the applicant’s pay stubs and bank account statements, as well as credit reports and background checks, verification of previous rental housing history, employment verification, and landlord references. A recognized business necessity compliant with applicable laws is the underlying requirement for permissible purpose to require verifications and documentation.

If a prospect or an applicant is reluctant to provide requested information or refuses to provide information on the basis of an individual’s right to privacy, a landlord should explain that the request for information is a legitimate business purpose required for risk assessment to protect the landlord’s business and the safety and security of the current tenants. A landlord can assure the prospect/applicant that the landlord has the obligation and duty to safeguard the information collected on the application form and the screening reports and use the information for permissible purposes only. If the applicant declines to provide his personal information, a landlord may reject the application on the basis that the applicant did not meet rental criteria.

The most efficient means to obtain information needed to adequately screen an applicant while safeguarding the business income property and the safety of others is use of the application form. Data fields on the application form are the landlord’s request for information. An interview may be used to request additional information or clarify information as needed. The application form does not replace an applicant interview. An applicant interview is a separate screening tool. It is the landlord’s decision how to structure the application process.

The information requested on the application form should be business related to the qualifying of an applicant for rental housing. The same information should be requested of every applicant, the same screenings conducted on every applicant, and the same analysis performed on screening reports of every applicant. There can be no selectivity or preferential treatment of one applicant over another.

During the application process there will be discussion between landlord and applicant. There may be questions regarding the property or questions about information requested or information supplied. A landlord should be thoroughly familiar with fair housing laws at every level in order to understand what questions may be asked and what questions should not be asked of an applicant. Questions that violate the rights of protected classes violate fair housing laws cannot asked.  Federal Fair Housing laws prohibit discrimination against the protected classes of race, religion, national origin, sex, color, familial status, or disability. State and local fair housing laws may have additional protected classes and thus be more stringent than federal law.

Questions that are based upon sound business purpose and are legally permissible can help clarify applicant supplied information and supplement screening reports. However, questions, even those asked in friendly conversation, may not stray into issues that are legally protected rights of applicants and tenants.

For business protection it is a good idea to reserve a section on the application form marked for management use only. This section can contain the date and time the application was received, the property address, the rent amount quoted, deposits and fees quoted, receipt of deposits and fees paid at time of application, unit availability date, and requested move-in date. With the applicant’s signature on the application, the document serves as confirmation of any oral discussion regarding those issues discussed at time of application or that might have been discussed between landlord and potential applicant during a prior contact.

The value of the management section is the documentation of the relevant information quoted to the applicant at the time of application and the timeline of expected events during the application and screening process.  A landlord should not leave himself vulnerable to a misunderstanding of terms and conditions of tenancy or rely upon the memory of either party as to details of any discussion of move-in requirements.

The information collected from an applicant imposes responsibility on the landlord not only to use the information in accordance with all laws, but to also safeguard that information throughout the length of the tenancy and during the required retention period following tenancy, and then to properly dispose of it when retention requirements have been met.

The application form is a risk assessment tool to collect as much relevant information about an applicant within the parameters of permissible purpose, business necessity, and legal rights. The application process properly conducted and documented can reduce the risk of claims of discrimination in screening and selection of applicants. The signed rental application and the tenant screening results support the landlord’s decision to offer tenancy to the selected applicant.

A landlord has the right to legally ask for information that can verify the potential tenant’s ability to meet lease terms and conditions, including tenant screening for credit history and background checks. The information requested must be reasonable to business necessity to determine an applicant’s qualification for tenancy per the landlord’s stated policies, administered in a non-discriminatory manner to each and every applicant, and fully compliant with applicable laws.

An expressed reluctance by the applicant to disclose personally identifying information particularly a Social Security number is not an uncommon issue. The potential threat of identity theft is a concern that can be addressed by an explanation of the landlord’s business necessity to adequately screen applicants to protect the existing residents. A landlord should discuss with the applicant the rental policies and practices that protect all tenants’ privacy and security rights.

An applicant has the right to decline to provide personal information to a landlord. If your applicant declines to provide the requested information, you can reject the application.

Application fees are intended to cover the cost of tenant screenings such as credit and background checks. Landlord-tenant statutes of each state can address the matter of application fees differently. You will need to determine what your state allows before deciding on your policy.

As allowed by statute, many landlords do charge an application fee. The local rental market as well as the location of the rental property could be a consideration in setting the amount of an application fee but the determining factor is your state statute. As examples, some statutes set a maximum fee amount while others limit the fee amount to actual out of pocket costs as charged by the tenant screening services provider. In a few states there is no stated limit on application fees.

Each applicant should be tenant screened according to your written rental policies, in the same non-discriminatory manner, and charged the same fee.

If you will be renting to co-tenants, such as roommates, you can and should screen each adult who will sign the lease (which should usually be every adult occupant) and will reside in the rental unit. Therefore, if allowed by statue, you can and should charge an application fee for each applicant for that unit. Tenant screening of all applicants is important to protect your business. Your lease agreement should hold all co-tenants jointly and severally liable for payment of rent and complying with the lease terms and conditions. You will want to be sure each potential tenant is qualified under your rental standards to meet this responsibility. Whether you choose to charge an application fee or not, each and every applicant should be tenant screened as part of your responsibility for the duty of care to your current tenants.

The purpose of a listing is to advertise your vacancy in such a way as to attract the attention of a prospective renter and encourage him to call the listed contact for more information and a showing of the unit. Your listing should be descriptive and informative while providing the must-have details of your rental unit which will allow a potential tenant to determine whether the unit meets his (the potential tenant) rental wants and needs criteria. By including additional details of unit features and shared amenities, the potential tenant can compare his would-like-to-have wish list to the provided features and services.

By including relevant information for the property itself and details of the application process, deposits and fees, a potential applicant can self-evaluate his qualifications to the landlord’s rental criteria for tenancy.

While a basic classified ad will seldom contain much of the following information, other types of advertising, particularly websites, can provide many of the following items:

Potential renters and renters looking to move to a new unit are scanning rental ads for as much information as can be found regarding the following items:

• Location of the rental unit – property address, zip code, neighborhood designation, or rental community name
• Type of rental housing – single family, duplex, apartment building, or condo unit
• Size of unit – number of bedrooms, number of bathrooms, total square footage, floor plan
• Rent – stated amount of monthly rent
• Availability of the unit – move-in date ready
• Lease agreement – term of lease or month-to-month agreement
• Security deposit amount – accounting and return of funds
• Fees and other deposits – application fee, pet deposit, etc.
• First/Last Month Rents – amount that will be due at lease signing
• Utilities – Landlord responsibility or Tenant responsibility
• Pets – allowed, not allowed, type, breed, rules, restrictions, fees and deposits
• Smoking/No smoking policy
• Housing Choice Voucher Program – Section 8 accepted
• Rules and regulations – noise/disturbance violations, guest stay, etc.
• Parking – assigned parking spaces, garage, or street only

The above listed items are the must-have details that potential tenants search for in listings. Providing these basic details allows for renter confirmation of interest and consideration of the rental unit.

The items listed below are examples of must-haves for some tenants and certainly could appear on many tenants’ wish lists for would-like-to-have features.

• Features – upgrades such as hardwood floors, granite countertops, tile backsplash, upgraded kitchen appliances, large windows, walk-in closets, pantry, in unit washer/dryer, internet service, cable TV, individual unit patio or balcony, fenced yard, key card security access, etc.
• Amenities – pool, fitness center, walking trails barbecue area, tennis courts, etc.

A potential tenant may consider property management and online services important in his decision making process. Providing information of what types of tenant screening will be done is also important in a decision to apply for tenancy.

• Management – onsite resident manager, property management company, landlord
• Tenant portal – online services for rent payment, repair/maintenance requests, customer service
• Credit/Background checks required
• Employment verification required
• Landlord references required

Your listing information should provide a variety of contact methods to encourage would-be renters to respond to your listing and schedule a showing.

• Contact information – name, telephone number, email address, website address

It is important that you respond to calls in a timely manner. When potential renters scan your listing their immediate attention is on your property. Take advantage of a call, text, or email from a potential renter wanting more information to help move the caller forward to a decision for application. Rather than considering calls asking for the same information as provided in the listing as a nuisance, think of the calls as confirmation of interest for your unit and an opportunity to fill a vacancy.

As a reminder, a landlord must be knowledgeable and compliant with applicable Fair Housing laws. Of particular importance to landlords in their advertising is being sure that they comply with federal Fair Housing requirement Section 804(c).

Section 804(c) of the Fair Housing Act specifically makes it unlawful to make, print, or publish, (or cause to be made, printed, or published), any notice, statement, or advertisement, with respect to the sale or rental of a dwelling, that indicates any preference, limitation, or discrimination based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act.

The rule is that a rental listing should always describe the property, not the tenant who will live at the property.

The landlord-tenant relationship is governed by legal rights and responsibilities. There is an implied duty of good faith and fair dealing between landlord and tenant that requires the landlord and tenant to treat each other honestly and in a reasonable manner. It is understood neither party will do anything that will injure the right of the other party to receive the benefits of the lease agreement.

A tenant’s rights are non-negotiable, that is, the tenant cannot waive his rights provided to him by law. Basic legal rights are afforded to a tenant regardless of the language in the lease agreement.  However, to protect himself the tenant should conduct due diligence to understand his full rights by applicable laws.

Fair Housing Protections

Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act), as amended by the Fair Housing Amendments Act of 1988, prohibits discrimination in housing and housing related transactions based on protected classes of race, color, religion, sex, national origin, disability or familial status.

The Fair Housing Act prohibits landlords from taking discriminatory actions against current or prospective tenants in any protected class. Discriminatory practices could include:

• Advertising that indicates a preference or limitation
• Falsely denying that a rental unit is available
• Setting more restrictive standards or adverse terms
• Refusing to rent to members of certain groups
• Applying different screening criteria among applicants
• Refusing to accommodate the needs of disabled tenants
• Terminating of tenancy for a discriminatory reason

Fair housing laws of some states or local jurisdictions provide even broader anti-discrimination protections. A landlord is required to comply with the level of law that affords the greatest protections to a tenant.

ADA Protections

Federal laws (1) prohibit discrimination against persons with disabilities, (2) require housing providers to make reasonable accommodations at all stages of the housing process (including application, tenancy, or to prevent evictions) for persons with disabilities, and (3) require housing providers to allow persons with disabilities to make reasonable modifications.

Reasonable Accommodation

A reasonable accommodation is when, at the applicant’s/tenant’s request, a landlord voluntarily makes exceptions to standard rules and/or policies to accommodate the applicant’s/tenant’s disability.

When a landlord refuses to accommodate a disabled tenant’s reasonable request for exceptions to standard rules or policies in order to accommodate the tenant’s disability, housing discrimination can occur. A tenant or applicant may bring a housing discrimination complaint against the landlord.

Landlord-Tenant Statutes

Tenant rights are afforded by state landlord-tenant statutes. There may be variances in legal rights from state to state. In general a tenant has the following rights.

Terms of the Lease Agreement

The lease agreement is a legal document binding both landlord and tenant to contract terms and conditions. When a landlord breaks the terms of the lease agreement, a tenant has the right to take appropriate action per terms of the lease agreement, landlord-tenant statutes, or legal action in the governing court of jurisdiction. Contract violations may allow the tenant to be awarded compensation or termination of the lease agreement.

Protection against Landlord Retaliatory Actions

The majority of states have laws prohibiting landlord retaliation against a tenant for exerting the tenant’s legal rights, such as a tenant’s complaint to the landlord or government agency for issues such as fair housing, habitability, building codes, health and safety. Additionally a landlord cannot retaliate against a tenant for exercising the tenant’s right to engage in political activity or involvement in tenants’ organizations. Many states presume a landlord is acting in a retaliatory manner if an action, such as terminating a tenancy, refusing to renew a tenancy, decreasing essential services, or threatening or filing an eviction action, occurs within a short time, usually six months, after a tenant exercises a legal right.

Implied Warranties

Implied warranties under the landlord-tenant lease agreement are important tenant rights.

Covenant of Quiet Enjoyment

The right of the tenant to quiet enjoyment of leased premises has been upheld by courts regardless of whether the lease agreement contains such a covenant. This covenant ensures the tenant that during his tenancy, the tenant’s use and enjoyment of the dwelling unit will not be disturbed by someone with a superior legal title to the land including the landlord. The covenant between landlord and tenant provides the tenant with the right to exclude others from the premises, the right to peace and quiet, the right to a clean and habitable environment, and the right to basic services. If the tenant is deprived in whole or in part of the beneficial use and enjoyment of the leased premises due to actual or constructive action by the landlord, a breach of the covenant has occurred.

Warranty of Habitability

The implied warranty of habitability is the legal doctrine that requires landlords to offer and maintain leased premises in a safe and sanitary condition fit for human habitation for the duration of the lease.

The lease agreement is a contract controlled by principals of contract law. The lease agreement contains mutual dependent warranties – the tenant’s promise to pay rent and the landlord’s imposed obligation to provide habitable premises.

A material breach of obligations by either party relieves the other party from his obligation as long as the breach continues. If the landlord causes a material breach of the warranty the tenant may be entitled to such remedies as damages, lease termination, rent abatement, or repair and deduct expenses.

Privacy and Control of Property

The landlord transfers possession of the rental property to the tenant by terms of the lease agreement. The tenant has the right to exclude others from the property and the right to a reasonable level of privacy. Landlord access to rental property is restricted by landlord-tenant statutes that specify circumstances when a landlord may enter the rental premises and the amount of notice required for non-emergency situations. In most states the landlord may access rental property for the business purposes of inspection, repair, maintenance, or improvements provided the landlord complies with statutory notice requirements.

Landlord behaviors that are considered too invasive of the tenant’s right to privacy and/or intrusive to the tenant’s enjoyment of the premises violate the tenant’s rights. If a landlord requests frequent inspections unwarranted by business purposes, conducts inspections or requests access outside of reasonable hours, or otherwise uses entry to harass a tenant, the landlord’s behaviors violate the landlord-tenant agreement. The landlord cannot just drop in or otherwise enter the tenant’s unit without the express permission of the tenant except in the case of true emergency.

Security Deposit Accounting and Handling

Security deposits are funds that legally belong to the tenant and remain a credit of the tenant during his residency.

State landlord-tenant statutes regulate security deposit limits, deadlines for itemization and return of security deposits, and disclosure requirements. The statutes provide clear protections to tenants for the use of their security deposit funds and the return of deposits upon tenant move-out.

A landlord is required to disclose the conditions under which part or all of the security deposit may be withheld and how the deposit is refundable. If, when a tenant vacates the rental property, the landlord retains part or all of the deposit because of unpaid rent or damages beyond normal wear and tear, the landlord must provide detailed accounting for all amounts not returned. Accounting and return of the balance of the deposit must be within the period specified by state law.

Rent Withholding and Repair and Deduct Remedies

If a landlord has not maintained the rental property in habitable condition, the tenant by statute in many states may take legal actions to force the landlord to restore the property to good condition. Actions could include withholding rent, repairing the problem and deducting the cost of repairs from the rent, reporting code violations to building or health inspectors, terminating the lease by moving out, or filing a lawsuit against the landlord in small claims court.

Landlord Rules and Regulations

A tenant has the duty to comply with the landlord’s rules and regulations set out in the lease agreement. A tenant does not a right to purposely ignore or selectively choose the rules and regulations for living at the rental property.

A tenant cannot do as he pleases if his conduct is illegal, violates lease terms and conditions, creates a disturbance, commits nuisance and waste, or could harm neighboring tenants or the rental community.

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.

Identity theft is true name fraud. Fraud occurs when an individual’s personal information is used without their knowledge by another individual to commit a criminal act. An applicant may use bits and pieces of the identity theft victim’s personal information, such as the victim’s name, date of birth, or Social Security number, as his own information on the rental application. Unless the landlord discovers red flag issues or obvious discrepancies, the applicant may be approved for tenancy based upon the qualifications of the identity theft victim. When the fraudulent tenant defaults on his lease, the landlord will discover that his tenant was never who the landlord thought he was.

Manufactured identities are another type of tenant fraud. A fictitious identity is created through the use of digital fraud. If a landlord installs this tenant, the person using the false identity now has the means to obtain credit or commit other types of fraud. The fraud may not be discovered until the tenancy is well along and may only be discovered if there is a material default of the lease. Once again the landlord will discover that his tenant was never who the landlord thought he was.

The use of online rental applications may contribute to tenant fraud. An online application provides a level of anonymity that can create problems for a landlord since the landlord has no knowledge of how the application was completed.

When accepting applications, landlords must ask for proof of identity. Industry standard is to require two forms of identification with one document containing a photograph of the individual. Most landlords consider a state issued driver’s license to be a reliable identification document. Because the document is official looking, many landlords take only a cursory glance, assume the document is valid and accept it without question. However fraudulent documents can easily be produced by applicants and tenants whose intention is to create rental fraud. Any document used in support of a rental application should be independently verified at the appropriate source or level of agency that purportedly issued the document.

A state issued driver’s license provides a great deal of personal information that could be used to further verify applicant information. The license generally contains the legal name of the driver, a photo identification, date of birth, and descriptive personal information of the driver’s sex, height, weight, eye color, hair color, or restrictions such as glasses. A landlord should certainly check that the appearance of the applicant is reasonably similar to the photo on the license and that each item of physical information shown on the license seems reasonable compared to the person in front of the landlord. The signature on the license should be similar in appearance to the handwriting and signature of the applicant on the application form.

Choosing the right tenant can make all the difference in the landlord’s business. Choice is more than filling a vacancy; choice is every effort to avoid financial risk. An applicant comes with a story and a history. The applicant the landlord sees is the one that is judged. What if the applicant has intentionally given false or misleading information about his history? Is a landlord prepared to protect his business by a thorough investigation and evaluation of the applicant’s story and history? In today’s market, a landlord must protect his business.

Tenant fraud is on the rise. A recently published independent consulting study commissioned by TransUnion to evaluate fraud in the rental industry found that more than 80% of property managers participating in the study had experienced tenant fraud.

Accordingly, to protect their businesses, landlords and property managers must increase their due diligence efforts, strengthen their tenant screening practices, and keep vigilant against tenant fraudulent acts. Discovering fraud after a tenant has skipped a rent payment is too late to prevent loss.

Tenant screening methodology properly utilized can serve as a first alert to tenant fraud. Tenant screening supported by a committed policy of full investigation and direct verification of applicant data helps to protect the landlord’s business.  As a practical matter, rather than take an applicant’s information at face value, a landlord should independently verify applicant information, whether given orally or as written application. If something seems too good to be true, it probably is. A little skepticism on the landlord’s part may be a good thing to prevent fraud.

The simplest, most direct fraud control to avoid loss of rents is to recognize fraudulent behaviors, be alert to red flag issues, and thoroughly vet applicants throughout the application and interview process. The timing of the investigation and verification process is critical to identify fraud before advancing the applicant to consideration for tenancy. Once a tenant is installed, a landlord must use the legal system to remove the tenant from the property, which may take several months and be at great expense.

What can a landlord do to protect his business from tenant fraud? A key issue in fraud protections is thorough knowledge and understanding of applicable laws that regulate landlord-tenant matters. Rental fraud often occurs because a landlord is unfamiliar or unsure of applicable laws and legal processes. Tenants with the intent to defraud take advantage of a landlord who doesn’t know the law and hesitates in taking action.

Vigilance is also a key factor in identifying red flag issues and preventing tenant fraud. A landlord must be alert to discrepancies, omissions or inconsistencies in information in the application itself, as discovered during applicant interviews, or revealed in reference verifications.

A landlord should never be in a hurry to fill a vacancy without conducting adequate investigation and verification of applicant information. Patience and persistence in the landlord’s due diligence efforts can be a first line of defense in protecting the business from intentional harm from fraud or rental scams. An applicant intent on committing fraud is counting on a landlord being too busy to notice inconsistencies in his story or too desperate to rent up the unit. If the landlord is unfamiliar with landlord-tenant laws, or unwilling to take the time to follow stated rental practices, there is greater risk for tenant harm.

Adequate due diligence to complete all necessary tenant screenings is not a waste of time and money when compared to the costs of lost rents, eviction, and property damage that can occur if tenant fraud is involved. No matter how good an applicant looks on paper and in person, a landlord should always follow his stated policies and practices of tenant screening. An applicant in a hurry to move-in is a potential red flag. While there can be good reason for a quick move-in, an applicant who is legitimately looking for a rental should be knowledgeable of the rental process and should have allowed adequate time to search the rental market. The landlord has a duty of care to protect his current tenants by enforcing his policies and practices for screening and selection. Installing a tenant without adequate screening could be cause for claims of landlord negligence.

Nuisance and disturbance issues should always be adequately addressed in your lease agreement.

A lease agreement should always include a clause that prohibits tenants and their guests from creating a nuisance by disturbing or interfering with other tenants’ right to the quiet enjoyment of the rental property. If a tenant or guest violates the lease by creating a nuisance with loud or excessive noise, the landlord’s actions should be in accordance with the remedies set out in the lease or by law.

As an example of a lease clause that might help with noise and disturbance complaints, a landlord could include in his lease a clause that sets a noise curfew, designating the hours for “quiet time” at the rental property, perhaps between 10:00 p.m. and 6:00 a.m. Additionally the lease clause could list some of the most common noise disturbances that are prohibited, such as loud music or TV, barking dogs, or noisy parties. Having specific rules will make it easier for tenants to understand what is expected and the consequences for violating the lease.

Explaining landlord rental policies and qualification standards during an applicant interview can help an applicant understand what is expected of a tenant. In qualifying an applicant as part of standard tenant screenings, a landlord should verify with previous landlords whether warnings and/or notices for noise or disturbances were issued to that tenant or whether the tenant had a history of complaints about noise from other tenants.

As part of tenant move-in orientation, the landlord should review all material lease clauses with the new tenant, emphasizing the rental rules and regulations including noise restrictions, quiet hours, and the consequences of violation of the rules. The landlord should emphasize to the tenant that by the tenant’s signature on the lease the tenant acknowledges his understanding and consent to its terms and conditions. A tenant should also understand that he is responsible for his guests’ conduct and adherence to rules and regulations while the guests are on the rental property.

The rules for community living must be clear and serve as a guide for resident behaviors and to act as a deterrent for unacceptable behaviors. Landlords should incorporate as much detail in their lease agreements as needed to protect the property and the residents.