Tenant Screening

7 Replies

Hello fellow Canadians I was wondering if you screen your tenants with credit and criminal record checks. If so, how do you do it or which services do you use?

If you do these checks do you charge an application fee and how much do you charge?

Thank you;

I'd be interested to know what others are using as well. There seems to be lots of US based services, but I don't know of any good Canadian ones.

I've been renting mostly to students, so I have the parents co-sign the leases. For foreign students, they've paid me the entire rent up front in cash!

@Dale Plant

@Ming Lim

We rent to many student tenants as well and perform all of our own screening. We also charge a very modest application fee ($20.00) which typically serves to weed out those candidates who would not even come close to qualifying. If a candidate is successful, we apply their application fee towards their security deposit.

We use both Rent Check and Tenant Verification Services (TVS) for our credit and rental history checks {They are the only two players in this end of the country}.

Like you, we typically require a guarantor for most student tenants and perform a credit check on the guarantor as well.

We also have a building which caters to international students (renting furnished rooms). In the case of foreign students, a credit check is normally not possible (unless they have been in the country for a few years), but where we are renting rooms (typically month-to-month) we take a security deposit and can always send someone packing with 30-days notice. Ironically, we never have problems with our foreign students - they are paying dearly to attend university and are not about to waste their time or ability to be in the Country by partying or getting into trouble.

Criminal record checks are difficult to perform, and of marginal utility, in Canada due to the privacy laws. Usually all you can find out is whether an individual has a record and perhaps whether there are multiple offences.

You should be aware that in most Canadian jurisdictions {Ontario amongst them, I believe} you legally cannot legally collect rent for the entire lease in advance ... usually you can only collect a security deposit and/or the last months rent, plus rent for the next period.

Thanks for the great reply @Roy N. !

Did not know this was illegal, but it was actually done out of the tenants request (I've only had a handful of foreign students). Apparently they were unable or unwilling to open bank accounts, so it was easier for them to give us the entire sum up front.

I do agree, they have been the least troublesome. If you're leaving the comforts of your own country to study abroad, you tend to be a bit more responsible!

Thanks for replies.

@Roy N. Your responses are always useful, actionable and appreciated.

@Roy N. I also use TVS but I'm curious as to your reasoning for using both TVS and Rent Check. Are there certain circumstances when you use one over the other or do you use both on all applicants? Would you care to elaborate?

@Dale Plant

I haven't charged an application fee but I do require a $500 rent deposit which I receive with the application. I explain that if I approve the applicant as a tenant then the $500 is credited towards first months rent, if I decline them as a tenant the money is fully refunded and if for any reason they back out and change their mind then the money is forfeited by them. This way if they back out and I can't find a new renter then I'm not completely out a month's worth of rent. It also ensures that if I go through the time and cost of screening them then they will actually rent from me when I offer them the unit, instead of them picking & choosing between their best accepted applications. My girlfriend uses this same process but actually requires the full month's rent as a deposit with the application. She has had virtually no applicants object to this process over the last few years, and has never had anyone forfeit their deposit.

I have to admit that we're using this procedure in Edmonton and vacancy has been quite low the last few years. I'm not sure if applicants would react differently when vacancy rates are higher.

Ash

Interesting, charging a substantial fee like that... not sure how that would go here or even if it would be legal. I think it would only work with higher paying executive apartments. I would like to hear what @Roy N. has to say.

I did get chance to talk to someone from our Rentalman's office and she never heard of someone charging an application fee. Maybe I will start a trend.

@Ash Badry

@Dale Plant

We primarily use Rent Check as they are more cost effective for us given our membership in a provincial association. We used TVS before we had an account with Rent Check, and still use them in certain situations (i.e. if we have a miss with Rent Check). We also find they have better results when we have a student tenant from the U.S.A. {Note: This is not an empirically supported statement and may just be coincidence.}

Our application fee is modest ($20.00) as it is only meant to mitigate the cost of the credit check and wee out the tyre kickers. There are other landlords here who charge $50.00 / application.

Whether you should request an application fee and the amount of that fee would be factors of the local market conditions. In a stable to tight rental market, you could easily require a $50.00+ {non-} refundable fee. In higher vacancy conditions where the local norm is month-to-month letting {e.g. much of Saint John}, you would be limited to a more modest fee (if your building was highly attractive) or no fee (if your building was less than stellar}

The only time, we've taken a security deposit and/or first month's rent with an application was when we were approached to provide one of our properties furnished for a corporate rental. As a general practice, I do not believe it would work in our market.

Ash, I am curious how you are able to retain the deposit of first months rent if the application backs out prior to signing a lease {on a residential unit}. This is not uncommon in commercial leasing, but I'm fairly certain that here you would be required to refund the deposit in the case of a residential tenancy applicant.

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