{"id":81689,"date":"2020-03-18T05:00:58","date_gmt":"2020-03-18T11:00:58","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=81689"},"modified":"2021-03-16T12:12:09","modified_gmt":"2021-03-16T18:12:09","slug":"background-check-debate","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/background-check-debate","title":{"rendered":"How to Run a Tenant Background Check"},"content":{"rendered":"

A tenant background check is an important element of the renter screening process. While there\u2019s certainly a need for compassion\u2014should a youthful indiscretion keep you from renting forever?\u2014criminal checks provide important takeaways.<\/p>\n

If a person has a criminal background, they may not care about an eviction on their record. That means they may not be conscientious tenants. (Although, again, compassion is important.) This is especially true for multifamily landlords, who must consider the impact on the other tenants, too.<\/p>\n

Many newer real estate investors\u2014and even some experienced ones\u2014struggle with background checks decisions. Oftentimes, this can be a sticking point, causing paralysis. Can you legally perform background checks on tenant applicants? Should you? Or is it a waste of time that is killing your occupancy rates and real estate returns?<\/p>\n

RELATED: <\/strong>Tenant Screening: The Ultimate Guide<\/a><\/em><\/p>\n

Renter Background Check Regulations<\/h2>\n

The real estate industry lacks a consistent position on background checks. You can get a real estate, mortgage, or securities trading license in many places even with a criminal background. In some states, you can qualify for a license while on probation.<\/p>\n

But not all states regulate laws for the tenant\u00a0screening process. In Seattle, for example, regulations outline the reasons landlords can accept or deny tenant applicants. Some places ban background checks entirely or prevent you from using them to make a rental decision.<\/p>\n

Ultimately, knowing your local laws is vital. Work with an attorney to make sure you\u2019re going about tenant screening legally.<\/p>\n

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Are Tenant Background Checks Truly Valuable for Landlords?<\/h2>\n

What\u2019s the value in running background checks for landlords? The most common reason is to look for past evictions, which is absolutely fair. However, others might argue that criminal checks identify renters who may cause property damage. Additional concerns may be sexual predators and drugs dealers.<\/p>\n

Before launching your own background check policies, decide where you, personally, draw the line. At a misdemeanor? A felony? A certain type of offense? If it was yesterday or 10 years ago? A one-time thing or a lifelong rap sheet? What if individuals have paid their dues and done their time? What if it was a bogus case?<\/p>\n

You\u2019ll need to enforce these decisions consistently to avoid violating discrimination laws, so consider outlining them in your policies.<\/p>\n

RELATED: <\/strong>The Fair Housing Act and Landlords: What You Should Know<\/a><\/em><\/p>\n

Here\u2019s what to consider when drawing your personal boundaries:<\/p>\n