Should There Be a Better Review System in Place for Landlords?
Should there be a “landlord blacklist”? Shouldn’t renters and other parties in the real estate industry have access to landlord report cards, just as much as they are available on borrowers, renters, and businesses?
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Renting a home is an incredibly tedious process today. Whether you’re working with newbie landlords or big hedge funds managing national portfolios of properties, the application process to rent can be almost as excruciating as getting a bank loan to buy the home. There may be application fees, credit checks, background checks, disclosure of revealing income information, and calls to references and previous landlords. On the other hand, little is often done to vet and screen landlords.
What Does a Tenant Have to Lose?
Some might find this a little ironic given that in most cases, a landlord’s exposure is normally a couple months’ rent or any insurance deductible they may have. Conversely, a tenant often has their life savings, entire household, and family on the line.
You might argue that a tenant ought to be doing even more due diligence on the landlord. The tenant should know if their prospective landlord is up-to-date on their financing payments, if their books are balanced, if property taxes and utilities are paid on time, what judgements they may have against them, and what their reputation is for property management and customer service. This data would also be useful for lenders, future buyers of the property, vendors and contractors, and investors supporting them, as well as local government.
There are actually some (but not very many) resources online to find landlord reviews out there. A quick Google search may be a good start. This may include pulling up public records of liens, etc. depending on how much the local county puts online. There is also the Better Business Bureau for corporate landlords, though the accuracy of this information is frequently debated. Yelp and other online review sites may work for looking up apartment buildings and property management companies.
The New York Times recently picked up on this dilemma and highlighted a new service, RentLogic, which rates NYC landlords and buildings. The site grades them on a scale from A to F and includes data on ownership, emergency calls, plumbing issues, heat and hot water problems, and more. Of course, there has been significant pushback by landlords who haven’t appreciated their ratings.
What do you think? Do you wish there was a better way to distinguish yourself as a good landlord versus the others? Are you a tenant who has done some of this vetting for yourself before? Are you an investor who sees value in knowing a property or seller’s reputation in the search and acquisition process?
Let’s talk in the comments section below!