Landlord rights (Property management not sharing tenant info)
Hi, I am a landlord using a property management company for one time placement and not ongoing management. The property management company is refusing to share tenant information such as credit report and proof of employment. Is this legal? I would think this information would be crucial if something to go wrong or even to select good tenant. I only received verbal information on annual income and credit score of the tenant.
You might check your leasing agreement with them. I would expect to be provided with the tenants full information including application and all reports/information that was collected.
Its probably because they don't want you contacting the applicant to cut them out of the deal. I would ask them to give me partial information atleast that does not include their information until after they sign the lease and they collect the leasing fee after which you should get all the information.
That does sound a lil funny. Do they guarantee that the tenant will stay for a set amount of time or you get your money back?
This is a private contract between you and them, so what they will or won't share is all legal...and just depends on what your agreements say. But even a private contract does have certain issues if it runs afoul of other rules/laws, such as privacy issues surrounding credit ect. Whether you like it or not, the tenant agreed to allow the PM to access their private info not you, so I think what you need to do is ask them to get the tenant's permission to provide the info to you. Or you need to request the info directly from the chosen tenant later....that's the issue with landlording this way. I'd suggest either going 100% PM or 100% self managed.
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Matt is correct, federal privacy laws AND our agreement with our screening provider, don't allow us to share confidential information with anyone outside our company.
Our contract actually states this, so no surprises to our clients.
They are most likely within their rights to withhold certain information. I've had owners try to steal tenants right after we placed them so I understand their apprehension. They should however be able to clearly explain their leasing criteria and demonstrate the tenant hit all those marks. All they would need to do is white out the name and contact information. However since this is a placement agreement you would be getting all that information once the tenant was placed.
I would just call them up and ask why they are unwilling to share this information and your apprehension with approving them in your home without more information. If they still say no I would look into terminating the relationship.
Thank you all for your feedback, it is very much appreciated. After initial reaction I did schedule a call with my PM and it turns out what Mike and Drew posted is the actual reason. However, in my case this fact was actually not in the contract I signed with with my PM. I had verbally asked this question prior to signing the agreement but due to miscommunication it was misunderstood by the PM. The miscommunication was that the PM though I had asked if PM checks this information as part of the screening and what is the barrier for approval as opposed to if the PM will share this information. Lesson learned it's always best to have the important stuff to you in writing. In any case I am curious to know could the PM could get approval from the tenant at the time of application to share the information with landlord. But I guess as Drew suggested the restriction is also from the screening provider. Is there a way to get around that? I trust my PM company but it still leaves me feeling a little hesitant.
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@Partap Aujla: understand your apprehensions, but not sure there's any easy solution:( If most PM's actually really reviewed their screening/credit report vendor agreements, I'd be surprised if they ALL didn't limit access of the data to only PMC employees.
Theoretically, we could read you what the screening report states, word-for-word, but we can't give you a copy of it.
Depending on what the Rental Application authorization states the applicant is allowing, the PMC may be able to give you access to the applicant's DL, paystub, etc. info. Ours allows this.
Hope you understand all the legal and potential liability issues PMC's have to deal with regarding tenant confidential information. Most DIY landlords unknowlingly violate these all the time.
I use Smart Property Systems software to manage my units. I do my own tenant screening and placement of tenants. But we have a screening tool from Transunion in the software. I was told by Transunion that we cannot keep the reports longer than 60 days in our software but we are allowed to print the reports. Do the reports go away automatically after 60 days in my tenant screening report section of the software. If it were me and I used a placement company to find tenants, I would want to know at least what the report said about the tenant or get a print copy for my records. This would be especially true if they are only doing placement and you are stuck with the tenants that they choose. If they do not comply, I would either change companies or try a software with web flyers to find applicants and do your own screening. It takes me about 2 minutes to request a screening report for an applicant.
I use Smart Property Systems software to manage my units. I do my own tenant screening and placement of tenants. But we have a screening tool from Transunion in the software. I was told by Transunion that we cannot keep the reports longer than 60 days in our software but we are allowed to print the reports. If it were me, I would want to know at least what the report said about the tenant or get a print copy for my records especially if they are only doing placement and you are stuck with the tenants that they choose. If they do not comply, I would either change companies or try a software with web flyers to find applicants and do your own screening. It takes me about 2 minutes to request a screening report for an applicant.
We have similar issue. I just terminated the contract with a property manager and the property manager is refusing to share the tenant information. We need this - in case there is an issue going forward (e.g. eviction). What rights do I have?
Abhishek Singhal In my experience, it depends on what the contract says. If there are terms for terminating the contract, read them carefully. I cannot think of any reason not to share except that there may be a privacy issue in your state. You at least need a history of the payments made if you do not have one and a copy of each tenant's lease and any other documents they may have sent to the tenant or visa versa. If you are the owner of the property the lease is with you even though you had a property management company. That company was your representative and does not have the right to withhold tenant information. I would suggest that you go and patiently explain this fact and ask for what you need. If that approach is not successful you will have to have a lawyer write a letter. Then find a place to write a review about the property management company and explain the issues. I bet they will give you the information you want in return for removing the review.
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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 a financial institution from disclosing a consumer’s nonpublic personal information like your Social Security number, income, and outstanding debt to companies that are not related to the financial 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.
“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 approved 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...
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!
Hi! Chiming in here. We do not disclose this information. The applicants agree to let the company vet/screen them. We have an obligation to keep that information confidential. We provide our owners with the screening criteria we use and that is it. Do not want to deal with any perceived Fair Housing issues. Good luck and happy investing!
Thank you Drew Sygit for the info. If it can be demonstrated that PMC failed its fiduciary duties in protecting the Owner's interest from the get go and at every turn causing great loss (eviction, damage) through no lease enforcement and negligence in screening, then forced Owner to have to file eviction and then seek to collect judgment via garnishment, then what recourse does the Owner have if the info that will allow the Owner to sue the employers are withheld from them by the PM? You would have to have tenant SSN in order to proceed with the garnishment.
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@Ying B. a judge could order the PMC to share the info with an owner and that would protect the PMC from further liability.
the claim that PM cannot share tenant's credit file / application is fundamentally incorrect because (caveat - not a lawyer so this is not a legal advice, was told this by a lawyer, but you still need to talk to your own lawyer)
1. the business relationship is between the landlord and the tenant, not between the property manager and the tenant - property manager is given limited rights by the landlord, which include tenant screening on the landlord's behalf, collect rents, etc. and all such limited rights are fully revokable. Pretty much all residential lease agreement start with something like "this lease agreement [] between [] LANDLORD and [] TENANT..." which establishes such business relationship for the purpose of leasing / renting LANDLORD's property (in other words, TENANT Is willingly entering into a financial/business transaction with LANDLORD, _not_ a property manager
2. Title VI specifically says "§ 604. Permissible purposes of consumer reports
[15 U.S.C. § 1681b]",
- (a)(3)(F)otherwise has a legitimate business need for the information(i) in connection with a business transaction that is initiated by the consumer;
3. further, Title VI says "§ 624. Affiliate sharing [15 U.S.C. § 1681s-3]"
(A) a financial contract between[]
(B) the purchase, rental, or lease[]
PM declining to share information may do so if they are concerned about landlord not furnishing compensation for finding and placing a tenant, which can be resolved through legalese in contract between two parties. Title VI should not be an excuse for not sharing tenant's information, since landlord is effectively the one on whose behalf this report is being furnished. Finally, PM may decline sharing all applications they receive because that changes their process or increases burden or whatever, but again, the application for tenancy _belongs_ to the landlord on whose behalf this business transaction is initiated. PM is just an _authorized party_
There are also state level requirements, so ymmv there as well