Tenant Screening - Property Mgr says they owe back rent.

General Landlording & Rental Properties
10yFollow

Tenant Screening - Property Mgr says they owe back rent.

Chris Wallace
Lender · Washington, DC · Member since 2013 · 32 posts · 15 votes

Just saw a major red flag when doing my due diligence on a prospective tenant. Did a rental verification and the landlord says they owe back rent. They list the reason for leaving as property needs major repair. No evictions or judgments came thru on the check I run with smartmove. 

They have good jobs as a public school employee and hr professional. Make 3 times the rent. No criminal background or activity.  

Smart Move recommends accept, what do you say?

0Reply
4 views

Most Popular Reply

Phil Earley
Property Manager · Cumming, GA · Member since 2015 · 261 posts · 199 votes
10y

Owing past landlords money is an automatic denial.   There is a right way and wrong way to terminate a lease early.  It appears they chose the wrong way.....and history says they will do the same to you. 

4Reply
See this reply in the discussion

8 Replies

Jump to latestLatest
  • Phil Earley
    Property Manager · Cumming, GA · Member since 2015 · 261 posts · 199 votes
    10y

    Owing past landlords money is an automatic denial.   There is a right way and wrong way to terminate a lease early.  It appears they chose the wrong way.....and history says they will do the same to you. 

    4Reply
  • Stephen Haynes
    Rocklin, CA · Member since 2015 · 207 posts · 66 votes
    10y

    I wouldn't accept if they owe another Property Manager money. what is to say they don't do the same to you. Or I would clarify with the Tenant to see what they say.

    0Reply
  • Dave MeyerPro Member
    Head of Real Estate Investing at BiggerPockets · Seattle, WA · Member since 2015 · 224 posts · 826 votes
    10y

    Reject! Not worth the risk. 

    Podcast Guest on Show #186
    BiggerPockets
    0Reply
  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    10y

    Ask landlord(1)  "did they give notice of intent to move?"

    then ask the previous LL(2) the same question and add "would you rent to them again?"

    #1 may say anything positive just to get rid of them, but #2 will be a fair comment you can trust.

    1Reply
  • Larry K.
    Investor and Architect · Ramsey, NJ · Member since 2010 · 305 posts · 84 votes
    10y

    goodbye and next

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    10y

    Are the applicants able to produce any evidence to dispute the landlord's reference? If not kiss them goodbye and move on.

    Two years ago I rented to a seemingly nice couple with good credit, lots of money, fancy clothes, $100,000 between their two vehicles, etc. They had allegedly sold a home in Texas but their mortgage payment was not on the credit report because it was financed through a private company that was also the builder.

    Six months later, they start showing their true colors and my life was a mess for six months., During that time, I learned they did have a home in Texas but had stopped paying the mortgage. After a year, they were taken to court and a plan was put in place to get them back on track. They still didn't pay for six months and went back to court where they were forced out. The settlement was that the seller would get the house back and the buyers would walk away with their debt basically forgiven and no negative hits on their credit. They left...and they took the front doors, light fixtures, and other items with them at the cost of about $20,000.

    The point is, not everything in life ends up on a credit report. If the owner says they were bad, ask the applicants to provide evidence disputing the claim or walk away. They can find another rental and you can find another tenant.

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    0Reply
  • Chris Wallace
    OP
    Lender · Washington, DC · Member since 2013 · 32 posts · 15 votes
    10y

    Alright I've spoken with them and checked the local court records. They've been paying rent into a court ordered escrow. The management co had been cited for housing violations and wouldn't or couldn't fix them.

    They took the landlord to court for numerous housing violations that the management would not cure (vermin, water damage from the vacant upstairs, accumulated trash from a restaurant in the building), it was pretty gross stuff. They have pictures....

    The court returned to the tenants all the money paid into the escrow and ordered the management to give them a favorable rental recommendation.

    I also spoke to the previous landlord who said they were good tenants for 5 years, they moved when she sold the building.

    0Reply
  • Lisa Duke
    Sheridan, WY · Member since 2016 · 3 posts · 0 votes
    10y

    @Nathan Gesner 

    Thanks for the info! Interesting story. You know what they say, give a person enough rope and they will eventually hang themselves : )

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free