Tenant Screening Failure: How to Avoid a Similar Fate

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As landlords we know that one of the most critical jobs we have is screening and selecting tenants.  We know that if we get this part correct that our relationship with our selected tenants will be a profitable one.

So, imagine that you have done your tenant screening job well.  You collected references (landlords and employers) and checked them out.  You inspected their current residence.  You performed background checks.   Everything checked out. You selected the tenants, and then within the first 45 days things started to fall apart.

What went wrong?

In case you were wondering, this is a real life experience and there are several lessons to be learned, but first lets hear “the rest of the story”.

It turns out these tenants had just been fired from their jobs prior to their completing an application and to make things worse their employer was their landlord.  Can you see how this would present a challenge to any landlord.

One of the interesting things about this situation is that the landlord, once the tenant started to falter, decided to check out their Facebook page, which was public.  It turns out that the tenants had both posted 2 days prior to completing their application that they had been FIRED from their jobs.  It’s great that the landlord finally discovered the truth, but the most important question is how could they have avoided this situation in the first place.

Lessons Learned and Steps to Protect Your Business

 1.      You have to accept in today’s market that there will  always be more to the story presented on the application.  Ask questions — lots of questions!  Don’t be afraid to pull each thread to ensure you have the best information available prior to making your selection decision.

2.      While I do not know how the current landlord and employer information checks were performed the most effective method to get references is to do it via written documents.  And by documents, I don’t mean letting the references send you something they prepared.   You should have your own documentation that asks specific questions — you can figure out the questions to support your business model.  Also, don’t forget to get signatures, titles, printed names for the person providing the info.

3.      If you think tenants will allow it, require them to allow you to view their Facebook page.  I know this might be asking for a lot, but why not!  At a minimum, you should do a Facebook search to determine if the tenants’ Facebook page is not secure.  If that is the case anyone, including you can view their page.

I am sure there are other lessons that could be pulled from this true-life scenario that each landlord should know about.  Please be sure to share your lessons here.

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About Author

Peter is an active and successful real estate investor in the Baltimore Maryland region for the past 8 years and is one of the founders of The Club Mastermind a real estate investing coaching program focused on local coaches helping investors to perfect their game.

6 Comments

  1. Rich Schmidt on

    Wait… you say that the landlord in this story “collected references (landlords and employers) and checked them out.” How does one check an employer reference and NOT discover that the applicant has been fired?

    • As stated in the article… the current (previous) landlord was also the employer for the prespective tenants.

      I admit this situation would be a tough one to over come… and the employer just fired the employees… who just happened to be tenants with no income. Of course the landlord/employer was only too happy to offer glowing references.

      Get everything in writing and verify, verify, verify.

      • Rich Schmidt on

        So the employer/landlord lied about their employment status when the new landlord called to check references? Is that what you’re saying? If that’s what happened, you might want to say so directly instead of leaving it implied. From what you’ve said so far, including your comment, one could think that the new landlord never asked if they were currently employed. Asking in writing won’t help if the right questions aren’t being asked.

        It does sound like the tenants must have lied on their application, though, if they listed that employer as their “current employer” when they were no longer employed there.

        Thankfully, I’ve never been burned in this way. Perhaps because I practice your first piece of advice: ask lots of questions! I’ve also researched potential tenants on Facebook & elsewhere, with very limited success. Thanks for reminding us all to be careful!

  2. I think asking to view the Facebook page is shaky ground – while it’s not illegal right now, it may be soon (so be careful). I do believe Facebook instituted policies that make it against the TOS to require people to provide access to their page (whether it’s by asking for login/pw or for asking them to make their page public) – so if FB found out you did such a thing then they could ban you, though that may be a stretch for them in capability.

    Either way, I think asking for someone’s Facebook page to be made public is asking for them to surrender their privacy, which doesn’t seem very ethical to me. Now, if they are foolish enough to both make their profile public and place incriminating things on it (as so many apparently do) then that is their fault.

    • It sounds like a request on par with requesting permission to run a credit check, criminal check, or other similar status check. I don’t asking for username/password is what is being requested. Of course nothing is absolute until tested in court, but I don’t see the courts ruling in your favor if you have your facebook page publicly visible.

  3. Steve Babiak on

    Well, when both the employer and the landlord are one and the same – that in itself should set off some warning bells. Not noticing that seems odd, since that is certainly not common in screening tenant applications.

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