Potential Tenant Refusing Application Process

67 Replies

I have a potential renter who is refusing to go through the application process. Meaning, not providing his social security number to use a service for credit check and background check. He intendeds to rent through the company he owns (Allstate). He provided me a FINRA report, last 4 months of his company's revenue's, a criminal check report from 2012, and a copy of his 1099 form. He also offered copies of tax time settlement offers from two credit cards that he paid off with that offer. But apparently that is considered a compromise and ends up showing up on credit, and he showed me that in the FINRA report. He indicated that it is not a bad debit paid off but rather a good debit simply paid off with the tax time settlement offer. It all sounds legitimate to me but I am still nervous. He had concerns with someone getting hi SSN via hacking my WIFI, etc. I explained that any service I use would be through an SSL web site and it is highly unlikely. I also indicated that one service I can send him a link to the service and he can enter the information himself and I never have to see it. Still was reluctant to do it. I am curious how anyone else would feel about this? Would you go forward based on the above information? The person seemed like I was being a jerk about. Thanks.

I was on the fence until the very end.  "The person seemed like I was being a jerk about."  I think you mean they thought you were being a jerk, so they were also?  I rented to a jerk last year and so regret it.  Not wanting his ss# out in the ether is one thing, but the attitude tells their true character.  Next! They can get their 8th place trophy elsewhere.

NEXT

I'd tell him I understand his concern, but that is your criteria and you have to stick to it. Besides your concern is a deadbeat tenant and your way of mitigating that is by screening. Seriously though I'd consider not even bothering to rent to him, I get the sense that you will constantly get nit-picky issues and concerns about literally everything.

@Mark Werner A difficult applicant makes for a difficult tenant.  People will always show you their true self.  It's up to us to believe them.

I'd pass on this one.

Hi Mark - I would not continue any farther with this guy if he is not going to go through your full, regular process. You should have a clearly defined process and stick to it. If he does not want to participate, then he is out. Not to mention, making exceptions for one person but later not for others can get you into trouble with FHA rules.

Also, a criminal report from 2012 tells you nothing about the last 2-3 years.

Keep looking!

Andy

Medium highland properties  logo Andy Webb MBA, Highland Properties | [email protected] | 214‑263‑0021 | http://highlandpropertiesdfw.com | TX Agent # 692589

Originally posted by @Ursula B. :

@Mark WernerA difficult applicant makes for a difficult tenant.  People will always show you their true self.  It's up to us to believe them.

I'd pass on this one.

 Thank you, Ursula. That was my feeling. This is my first attempt at this so I was just looking for confirmation. My ad specifically says "Credit check required" The guy made me feel like I was being a jerk about it. I told him I wish he had told me this ahead of time. I turned down several potential renters.

Originally posted by @Andy W.:

Hi Mark - I would not continue any farther with this guy if he is not going to go through your full, regular process. You should have a clearly defined process and stick to it. If he does not want to participate, then he is out. Not to mention, making exceptions for one person but later not for others can get you into trouble with FHA rules.

Also, a criminal report from 2012 tells you nothing about the last 2-3 years.

Keep looking!

Andy

 Thank you, Andy. Appreciate the feedback.

One side sets the rules.  You or him?

Use a service  where he fills in his own information and it comes to you but do not bypass the process.  I would just let him know that it is not unreasonable for you to run a credit check independent from what he gives you.  I have heard people say you don't necessarily need an SSN, that I don't know but  if he thinks you are a jerk for running an independent credit check well  I would be willing to be considered a jerk.  This is a financial transaction, there are a lot of financial transactions that require an SSN, loans etc. my question would be what is he trying to hide?  Why is he explaining this tax time settlement to you?   a settlement means you did not pay what you owe.  I think if he won't do it ,  pass and move on.

@Mark Werner - you mentioned passing on some other possible applicants...until you have gotten the application process fully underway with one candidate and have accepted their application fee (assuming you have one...you should, to cover the costs of the background and credit checks), then continue the process and allow others to apply.  Alternatively, if you think you have a strong candidate, let the others applicants know you plan to start with him, but be sure to get their contact information.  Run your process as quickly as possible so that if the applicant is a dud, you can quickly connect with the others.

Andy

Medium highland properties  logo Andy Webb MBA, Highland Properties | [email protected] | 214‑263‑0021 | http://highlandpropertiesdfw.com | TX Agent # 692589

Hi Mark, NO  I would not move forward with this guy.  Its standard that you need a ss# to run a criminal background check, credit check, and verify his rental history using all the personal information he should provide.  

He may be hiding something but, it doesn't matter. Without him providing the ss# you don't know who your dealing with. And that means you can't begin an contractual relationship with this individual.

Mention to him every bank he has had an account with has his SS number ,every employer he has ever worked for , if he has a credit card they have it .  And for him to rent the property you must have it . Plain and simple no ss number no rental. 

Originally posted by @Colleen F. :

Use a service  where he fills in his own information and it comes to you but do not bypass the process.  I would just let him know that it is not unreasonable for you to run a credit check independent from what he gives you.  I have heard people say you don't necessarily need an SSN, that I don't know but  if he thinks you are a jerk for running an independent credit check well  I would be willing to be considered a jerk.  This is a financial transaction, there are a lot of financial transactions that require an SSN, loans etc. my question would be what is he trying to hide?  Why is he explaining this tax time settlement to you?   a settlement means you did not pay what you owe.  I think if he won't do it ,  pass and move on.

 Hi @Colleen F. Thank you for the response. I did offer him a service where he could submit the information himself and where I would not have to see any of his info including SSN#. He was still reluctant. I agree with you. I am going to pass.

Thank you everyone for taking the time to respond. They are the responses I expected but I just wanted to give myself a piece of mind that I was being unreasonable. I am a beginner at this and this is my first rental. That is my luck. I did not feel comfortable about even though he seemed like a good guy - until I was expressing being uncomfortable not doing the background and credit check. My ad say's "credit check required". Thanks again everyone. I appreciate the feedback.

wow i just noticed this thread after submitting a somewhat similar applicant drama.

anyways, my first reaction is... is 'his' company really 'ALLSTATE'?!?

2nd is, why would he want to rent (a residence?) using alternate (commercial?) credentials?

everyone knows a corporation is an artificial entity which amidst financial stress can instantly e dissolved without life-impacting consequences... whereas a natural person usually is only dissolved via... DEATH =/

Walk away.. Ask yourself this question... If you hired yourself to do this job and they told you this story what would you tell them??

I won't even go into the Fair Housing and Discrimination Laws you can be violating.

If they don't follow your written procedure then they are not accepted.. End of story!

Medium empire logo graySteve Rozenberg, Empire Industries, L.L.C. | [email protected] | 888‑866‑6727 | http://www.empireindustriesllc.com

@Mark Werner

 the bad tenants with some angle like to try to find the newbie landlords to scam.  For all you know he could be another Professional Tenant.

Also, in the future I wouldn't pass on anyone until you have deposit and first months rent in hand and a signed lease. Until then it's not rented. Finding someone who says they want to rent your place isn't the challenge, finding someone who is qualified to do so is.

Sorry, I couldn't read through everyone's comments, but in my world, there's no such thing as a "potential tenant who refuses the application process."  If one refuses the application process, that person is not a potential tenant.

Tell him to use Acutraq and then give the report to you.  Only costs $30.00

Ric 

I am going to share with you the best advice I ever received when I was new to landlording.

When an applicant is being a pain in the butt, save their number in your phone as "Do Not Answer."  Then when they call, take your phones advice and don't answer.  Makes everything so much less stressful.  

I probably have 20 or 30 Do Not Answers saved in my phone.  

Originally posted by @Ryan B. :

I am going to share with you the best advice I ever received when I was new to landlording.

When an applicant is being a pain in the butt, save their number in your phone as "Do Not Answer."  Then when they call, take your phones advice and don't answer.  Makes everything so much less stressful.  

I probably have 20 or 30 Do Not Answers saved in my phone.  

 Your advice is well received. Thank you @Ryan B. and everyone else that took the time to provide advice.

It's interesting to hear everyone's thoughts. Especially because I am the difficult renter! First let me say Mark has been very nice and I certainly would never consider him a jerk for sticking to his process. I however have some very specific reasons for wanting to lease the property the way I am suggesting. Please allow me to explain........

I am a business owner in our community for over 20 years. I have leased or purchased numerous properties in the New River Valley over that time frame. What I am proposing to Mark is to allow my corporation to lease the Townhouse. I am looking to purchase another business out of state between the next 6-12 months, but I am keeping my businesses here and will have to travel back and forth. I plan to make my home there and completely leave the area, so the property here is so I can have a home here for the transition. I am wanting to lease the property through my business to help with taxes and because I will be using Marks property to transition back and forth as I operate my businesses. My transition will be complete by the end of our 12 month lease.

The question is "Can James' corporation pay the bills?" and "Will James' corporation pay the bills?" I think I can demonstrate without any shadow of a doubt that the company has the capacity to pay the lease. We are currently in 2 commercial leases that are up to date and dwarf the payment needed for Marks property. My Corporation is in excellent financial standing. We recently paid off a note that was supposed to run for 10 years in year one. We are on very solid footing financially. Secondly as to the question of our willingness to pay, I have excellent references for our commercial leases, as well as all our other bills for the business. I truly doubt that any candidate who is looking to lease rather than buy has the financial standing of my corporation. Otherwise they would be buying in this underpriced market.

As to the release of my Social Security Number....... First off its not relevant. I am leasing the property through my business and unless I am signing as a cosigner, which I have not had to do for either of my commercial leases, my social is not relevant in terms of the credit worthiness of this transaction, only my corporations credit worthiness, which I can prove is excellent. Second, I have been advised by my attorney to not release my SSN to any individual. My corporation is designed to protect my assets and hold them. That's what its there for. Giving out my SSN to private individuals for a lease that may not even be consummated is simply foolish in this circumstance. Nothing against Mark, its just not relevant in this case.

I think the real issue here is can Mark get comfortable with this process. It is a little outside the box and maybe more experienced property managers have run into this, or maybe not. I'm trying to do some things for my own purposes that may not fit with his ideas. If that's the case I completely understand and will be happy to try to work this out with another property, however my wife and I really like Marks........ ;-)   

This is a bit odd and I think a very teachable moment. Mark has said he is new and is looking for advice on how to deal with someone who wants to do their own thing outside of his rental criteria. It took me years to learn what all of the posters here have said- don't bend your rules for one individual. It has not worked out well for me. 
@Mark Werner

 I hope you are learning all you can while you are here. People are giving you advice from their own experiences. You set the rules and you should stick to them for many reasons but all of them are about protecting you.

@Account Closed

 Welcome to BP! I saw quite a few red flags in your post personally. I don't know you if should throw all that out here. Since you did, I am happy to point out why Mark should not rent to you.

1. His criteria and rules protect him from claims of discrimination. If he regularly goes outside of them, then he can not raise them as a defense when needed.

2. You have said you are leaving at the end of the lease. As a landlord, I want long term tenants because the turnover costs are significant. I understand any tenant could leave at the end of the lease. I hope they will stay for many years. This is not related to the original question. Its just a reason you should not feel the need to put everything out there on this forum. 

3. I am an attorney and I would never give anyone the advice to not give out their social security number to an individual. I might say to be cautious. Multinational corporations get hacked every day. It is part of our daily lives. The likelihood of someone hacking your landlord's wifi is probably much lower. The biggest red flag is you have been provided with a way to enter the data yourself and you still refuse. You have provided old information. Not saying you are trying to do anything wrong.But, If you were trying to hide something, you would do what you are doing.

4. I am all for creative ways to run a business and working all of the tax angles. However, it is more of a reason to get a personal guarantee- not less. I am a bankruptcy attorney and I deal with failure everyday. This transition time is very risky and Mark would have little or no chance of collecting from a failed business as he will be low down the priority list when it comes time to settle up.

5. Renting to a business is different than renting to an individual. I do not know your state laws but I can assume there are statutes in place which may or may not cover this situation. Mark may lose some protections or may gain an advantage. The point is, Mark is not prepared to lease a residential property in a commercial setting. I would advise him to seek legal counsel to make sure he is protected and that is an additional cost which he may have. 

I could keep going. The point is there is a ton of ways this could go wrong. Having standards is not about an individual situation. It is about avoiding all of the mistakes everyone would make if they try to reinvent the wheel.  

Paul Choate JD | 405‑426‑9677

Tell him thanks but no thanks.  He is being difficult. Do you think he will be any better as a tenant? Possibly not.

No company avatar mediumJohn Thedford, John Thedford | 239‑200‑5600 | http://www.capehomebuyers.com

@Mark Werner

Do not rent to this person.

He has made an effort to explain why he wants you to go outside of your comfort zone. Sounds goofy to me  but that doesn't even matter. He could have given the best reason ever. The important thing to remember is it does not matter why he wants you to go outside of your comfort zone. There are other tenants who will not take you outside of your comfort zone. Rent to one of them. Take the path of least resistance.

As a landlord you will never have as much control as you do right now. Once the tenant is in the property you loose a lot of the control you currently have.

@James Houston

This is nothing personal against you by the way. I do not want you to feel attacked as your potential tenancy has received some negativity. Thing is this Mark is looking for advice and this is a real estate investing forum. The advice given by myself and the other members are IMO in his best interest.

Medium holton wise property group logo jpegJames Wise, The Holton Wise Property Group | [email protected] | 216‑661‑6633 | http://www.HoltonWisePropertyGroup.com | Podcast Guest on Show #127