Can leasing agents share credit reports with landlord/owners?

Question

Hello,

I am working with an agent who would then be my property manager to find a tenant for a property I own in NW Indiana.  She found potential tenants but told me she could only share their credit score with me but it is not legal to share credit reports with me.  Is this true?

Any other details or work arounds for getting this info if it is indeed true?

I was also considering selling the property but was told that a property cannot be for sale AND for rent at the same time in Indiana.  Is this also true?

Thanks in advance,

Justin

Jeff Copeland · Answer

I've seen this pop up in other threads before. Based on past discussions, you're likely to get some conflicting advice here, and some will want to argue with my position on this.

As a property manager, I have been through this a few times with owners, and even sought clarification from a well-respected attorney.

This article is a must read on the subject: https://evict.com/releasing-cr...).

Some key points:

- At issue here is a federal law called the Fair Credit Reporting Act (so this applies in any US state or territory and does not vary from market to market).

- Under the FCRA, your PM is a "Credit Reporting Agency" and as such they cannot (or at least should not) share credit reports with you or anyone else without exposing themselves to significant liability.

Per the article above "A debtor (resident or applicant) can sue for a violation of the FCRA, as can the Justice Department. Damages are awarded, even if there’s been no harm done to the debtor! Add attorney fees and court costs to that, and one has a very unhappy property manager."

- A tenant cannot waive their rights under the FCRA and "sign a release" to share their report with you or anyone else.

- Again quoting the article: "...the fact that the owner hired you as his agent and you obtained the report in that capacity of agent does not change any of the advice above."

In addition to the FCRA, the other major risk is identity theft.

In order to even be permitted to run credit reports, my PM company had to go through a physical site visit from a representative of the credit bureau to ensure we have physical (locking filing cabinets, etc), electronic (password protected computer lock screens, etc), and procedural (written policies) safeguards in place to prevent the release of SSNs and other personally identifiable information (PII).

So the correct answer to your question is a hearty No, the PM cannot and should not share applicants' credit reports with you.

Note: I have since followed up with the law firm that published the article linked above, and they acknowledged that some of this is still the subject of legal debate. But they were very clear about NOT sharing the credit report in particular:

"Cathy concluded that the management company was hired by the owner to screen applicants and make decisions about what applicants were approved, and saw no clear authority to share privileged information in the application with the owner, such as SSN information.    The point is still a matter of legal debate, but NOT with regard to consumer reports. Definitely cannot share consumer reports."