Landlord involvement after Property manager take over

[Bandu Khote]

Hi,

I am having my rental property managed by a property manager for the first time, and I have questions related to my involvement. My PM recently found a new tenant, and he did not keep me in the loop on who the new tenant is and the tenant selection process. Is this normal? Is it ok to ask for agreement that my PM signed with the new tenant and any background checks my PM did? 

[Drew Sygit]

Quote from @Bill B.:

It’s the “new” normal. 20 years ago I would get a call or email about the applicant. Their credit score is this because of these problems, they’ve worked at this job this long making this much, they lived at their last location this long. I suggest we do or do not accept them. 

That stopped maybe 15? Years ago. One of the reasons you hire a PM is to avoid violating any fair housing violations. Since you had zero to do with the screening process you have a pretty good defense. It probably gave them option to take greater risks with tenants than certain owners would so they can collect fees but that’s probably a small factor. It probably also saves time in the approval process. You should obviously get a signed leased, I don’t know if you can get access to any background/screening info, that might be private info depending on jurisdiction. 

Let’s ask a guy who does it for a living:

@Drew Sygit is there a better reason owners aren’t involved any more in screening or are they still in some of your jurisdictions? Are the owners allowed to see any info after the fact? -thanks. 

Used to be that majority of owners had experience running their own properties before they got too busy and hire a PMC to handle.

So, a PMC could have a quick, impactful conversation about an applicant for owner feedback/input.

Now, there are so many newbies that don't even know what they don't know, that it takes up waaaayyyyy too much time to have a discussion.

So, we've defaulted to the truth - our people have seen tens of thousands of applications. What input is an owner going to give us that will actually help?

Regarding sharing background checks and other confidential information, my standard copy & paste below:

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The primary law that governs how institutions can use or share personal information about consumers is the Gramm-Leach-Bliley Act of 1999. This law prohibits an institution from disclosing a consumer’s nonpublic personal information like Social Security numbers, income, and outstanding debt, to companies that are not legally related to the institution.

https://www.ftc.gov/business-g...

https://www.ftc.gov/business-g...

Also, most credit agency contracts do not allow their clients to share info with 3rd parties, which an owner is.

“This data may not be sold or shown to any party not affiliated with the original contract."
https://www.rentspree.com/blog...

"Landlords and property managers are required by FCRA regulations to legally review a tenant's credit report (with consent) for the sole intention of determining an applicant's qualification to rent. When setting up an account with a credit reporting agency, a landlord and property manager will submit a simple credit access application and supporting documentation that proves their need for access."
https://www.rentecdirect.com/b...

If a PMC shares the confidential information of a tenant prospect with an owner and that owner somehow allows the info to be used for identity-theft or other related crimes, the PMC will be sued! How will an owner guarantee to a PMC that this won’t happen or pay for any legal costs if it does?

So, an owner insisting that a PMC give them confidential applicant/tenant information, often proves that an owner who THINKS they can DIY manage, has NOT done their homework regarding all the legalities involved in managing rental properties!

Recommend you hire a real estate attorney to assist you in understanding why the property management company shouldn't and doesn't have to share confidential application information with an owner. The attorney can also then assist you with creating the following compliant with all federal, state and local laws:

1) Rental Application
2) Lease & Pet Addendum
3) Renewal documents
4) Nonpayment Warning Letters
5) Eviction Letters & Notices
6) Legal Entry Notices
7) Security Deposit & Release of Liability Letters
8) Vendor Contracts with insurance and other requirements
9) MoveIn & MoveOut Procedures to Share with Tenants
10) Etc.

Hope this helps!