What is Rental Verification? A Comprehensive Guide

What is Rental Verification?

Rental verification is the process of a landlord or property manager confirming the rental history and background information provided by a prospective tenant. It involves contacting the applicant's previous landlords to verify details such as their dates of residency, payment history, lease compliance, property care, and any issues or complaints.

The rental verification process typically begins when a landlord receives a rental application from a prospective tenant. The application will include the applicant's current and previous residential addresses, as well as the contact information for their former landlords. The landlord will then reach out to those previous landlords, either by phone, email, or using a standard rental verification form.

Conducting rental verification is crucial for landlords because it allows them to assess the risk of renting to a particular applicant. By speaking directly with previous landlords, they can gain insight into the applicant's behavior as a tenant, their reliability in making rent payments on time, and their overall care for the rental property. This information can be invaluable in making an informed decision about whether to approve or deny the rental application.

Why Rental Verification Matters

Rental verification is a crucial step in the tenant screening process that should not be overlooked by landlords. It serves several important purposes that help mitigate risks and make informed leasing decisions.

First, rental verification confirms the information provided by the applicant about their previous rental history. Applicants may misrepresent details or omit unfavorable information, so verifying directly with former landlords ensures you have accurate data to evaluate.

Second, rental verification reveals an applicant's full rental history and pattern of behavior as a tenant. This includes details like whether they paid rent on time, properly maintained the property, violated lease terms, had an eviction filed, or faced complaints from neighbors. These insights give you a clear picture of what to expect.

Finally, rental verification allows you to assess the risk level of a prospective tenant. Based on their track record, you can gauge whether an applicant is likely to be a responsible, low-risk tenant who will take care of your property and fulfill lease obligations. Problematic histories serve as red flags to steer clear of potentially disruptive, destructive, or rent-defaulting tenants.

By verifying rental history, landlords can separate fact from fiction, gain transparency into an applicant's background, and make educated decisions that protect their investment properties and businesses. Skipping this step opens the door to significant legal, financial, and operational risks.

How the Rental Verification Process Works

Rental verification typically begins when a landlord requests rental history information and previous landlord contacts from a prospective tenant during the application process. The applicant should provide details like the names and phone numbers of prior landlords, as well as the dates they rented each property.

With this information, the landlord can then reach out directly to the listed previous landlords. Many landlords start by sending a rental verification form or list of questions about the applicant's tenancy. This form asks the prior landlord to confirm details like:

• Dates the applicant rented the property
• Whether rent was paid on time and in full
• If the applicant adhered to the lease terms
• Whether any late fees or delinquencies occurred
• If proper notice was given before vacating
• The condition the rental unit was left in
• Any complaints, violations, or eviction proceedings
• The reason the tenant moved out
• If the landlord would rent to this person again

Previous landlords can fill out the form or questionnaire and return it, or provide the details over the phone if the new landlord calls. Most are willing to cooperate, as long as the tenant has signed a release allowing the disclosure of rental information.

Through this verification process, landlords can obtain a clear picture of an applicant's full rental track record from an impartial third-party source. This insight is invaluable for assessing whether the prospective tenant has been reliable, responsible, and low-risk in the past.

What You Can Learn from Rental Verification

Rental verification can provide valuable insights into an applicant's rental history and behavior as a tenant. Here are some key details landlords can uncover:

Payment History

One of the primary purposes of rental verification is to assess an applicant's payment history. You can learn if they consistently paid rent on time, had frequent late payments, or failed to pay rent altogether. This information helps gauge their reliability and responsibility as a tenant.

Lease Compliance

Through rental verification, you can find out if the applicant adhered to the terms of their previous lease agreements. This includes whether they violated any policies, such as having unauthorized pets or tenants, or engaged in activities prohibited by the lease.

Property Care

Rental verification can reveal how well an applicant cared for their previous rental unit. You may learn if they caused any excessive damage beyond normal wear and tear, failed to maintain cleanliness standards, or mistreated the property in any way.

Behavior Issues

Perhaps most importantly, rental verification allows you to uncover any concerning behavior issues or conflicts the applicant may have had with previous landlords or neighbors. This could include noise complaints, confrontational conduct, illegal activities on the premises, or other problematic actions that disrupted the rental community.

By thoroughly verifying an applicant's rental history across these key areas, you can gain a more comprehensive understanding of their track record as a tenant. This insight enables you to make a well-informed decision about whether to approve or deny their rental application.

Benefits of Conducting Rental Verification

Conducting thorough rental verification on prospective tenants offers significant benefits to landlords and property managers. It serves as a crucial screening tool to reduce risks, avoid problem tenants, and make well-informed leasing decisions.

Reduce Risks

Verifying an applicant's rental history can help mitigate various risks associated with tenant selection. By obtaining accurate information about their past behavior, payment history, and compliance with lease terms, landlords can better assess the likelihood of future issues. This proactive approach helps minimize the potential for evictions, property damage, and legal disputes down the line.

Avoid Problem Tenants

Rental verification provides valuable insights into an applicant's track record as a tenant. If a previous landlord reports frequent late payments, noise complaints, property neglect, or lease violations, it can be a red flag indicating potential problem behavior. By identifying such issues early on, landlords can avoid renting to tenants who may cause headaches and financial losses.

Make Informed Decisions

With comprehensive rental verification, landlords can make leasing decisions based on factual data rather than relying solely on the applicant's self-reported information. By gathering objective feedback from previous landlords, they can gain a more complete picture of the applicant's reliability, responsibility, and overall suitability as a tenant. This informed decision-making process helps landlords select the most qualified and trustworthy tenants for their properties.

Risks of Skipping Rental Verification

Failing to verify an applicant's rental history can expose landlords to significant risks. One major danger is the potential for applicants to provide false or misleading information about their background. Without proper verification, landlords have no way to validate claims made on rental applications. Dishonest tenants may attempt to conceal previous evictions, legal issues, poor payment histories, or other red flags.

Skipping rental verification also increases the chances of accepting unreliable tenants who lack a stable rental track record. These tenants are more likely to violate lease terms, damage property, pay rent late or not at all, and create issues that require expensive eviction proceedings. A comprehensive rental verification helps identify such risky applicants before approving them.

Moreover, landlords who neglect rental verification face heightened legal and financial risks. Potential lawsuits from fair housing violations, discrimination claims, or improperly screening tenants can result in costly settlements or judgments. Problematic tenants also increase repair costs, vacancy losses from evictions or abandoned units, and collection issues for unpaid rent. Proper rental verification is a critical step in mitigating these exposures.

Rental Verification Questions to Ask

When verifying an applicant's rental history with their previous landlords, there are several key questions you should ask to gain valuable insights into their track record as a tenant:

Dates of Tenancy

• What were the start and end dates of their tenancy with you?
• Did they give proper notice before vacating the property?

Payment History

• Did the tenant pay their rent on time each month? 
• Were there any late or missed rent payments?
• Did you ever have to initiate eviction proceedings for non-payment?

Lease Compliance

• Did the tenant follow all the terms and rules outlined in the lease agreement?
• Were there any unauthorized occupants, pets, or lease violations?
• Did they give you reasonable access for inspections and maintenance?

Issues or Complaints

• Were there any complaints from neighbors about noise, disturbances, or other issues?
• Did you receive any property damage claims or charges against the tenant?
• Were there any lease violations that required warnings or notices?

Reason for Leaving

• Why did the tenant decide to vacate the property? 
• Did they provide a reason for not renewing the lease?
• Would you rent to this tenant again in the future?

By asking these detailed questions, landlords can gain critical insights into an applicant's rental history, payment habits, ability to follow rules, and their overall conduct as a tenant.

Tips and Best Practices

When conducting rental verification checks, there are several tips and best practices landlords should follow:

Be Thorough and Consistent  

Don't skip steps or cut corners. Verify every prospective tenant's rental history consistently using the same rigorous process. This ensures you treat all applicants fairly and avoid potential discrimination claims.

Ask Specific Questions  

Rather than open-ended questions, ask for specific details like dates of residency, on-time payment history, whether proper notice was given before vacating, any property damage, and more. Precise questions yield more insightful responses.

Document Everything  

Keep a paper trail by recording the name of each contact, the date you spoke to them, their responses, and any other relevant details. Maintain organized files on each applicant's verification.

Obtain Written Verification  

While verbal verification is acceptable, it's best to request written verification from previous landlords on their company letterhead. This official documentation holds more weight if disputes arise.

Be Persistent  

If previous landlords are unresponsive initially, follow up multiple times using various contact methods like phone, email, and mail. Their input could reveal crucial information.

Streamline with Technology  

Leverage online rental verification services and tools to simplify the process, get faster responses, and maintain digital documentation automatically. However, verify any third-party's compliance with applicable laws.

Verify Identity  

When contacting previous landlords, confirm you're speaking to the legitimate property owner or manager by verifying identities and contact information to prevent fraud.

Maintain Objectivity  

Don't let personal biases or assumptions cloud your judgment. Evaluate each applicant's verified rental history objectively based on the factual information you gather.

Laws and Regulations

There are various laws and regulations that landlords must follow when conducting rental verification checks on applicants. Failure to comply can result in legal issues and potential lawsuits.

One of the most critical laws is the Fair Housing Act, which prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, and disability. Landlords must be cautious not to use information obtained through rental verification in a discriminatory manner.

Privacy laws, such as the Fair Credit Reporting Act (FCRA), also come into play during rental verification. Landlords must have the applicant's written consent before obtaining and using their rental history report. Additionally, if the report contains negative information that leads to denial, the landlord must provide the applicant with an adverse action notice.

There are also limitations on how landlords can use the information gathered during rental verification. For example, they cannot reject an applicant solely based on their status as a victim of domestic violence or stalking under the Violence Against Women Act (VAWA).

Landlords should familiarize themselves with all applicable federal, state, and local laws regarding tenant screening and rental verification. Consulting with a qualified attorney can help ensure compliance and avoid potential legal issues.

Alternatives When Previous Landlords Are Unavailable

Sometimes landlords are unable to reach or get a response from an applicant's previous landlords during the rental verification process. This can happen for various reasons the previous landlord may have moved, changed contact information, gone out of business, or simply been uncooperative. In such cases, landlords have a few alternative options to consider:

Other Screening Methods

While rental verification is important, it shouldn't be the only screening tool used. Landlords can employ other methods like credit checks, criminal background checks, employment verification, and reference checks from personal contacts to gather additional insight into an applicant's reliability and suitability as a tenant.

Public Records Searches

Depending on location, public records like court records, property ownership records, and eviction records may provide clues about an applicant's rental history and behavior as a tenant. These can help fill in gaps when previous landlords are unreachable.

Third-Party Screening Services

There are tenant screening companies that can conduct more comprehensive background checks, including rental verification checks across multiple previous landlords using skip tracing and other methods. While an added cost, these services can be worthwhile when self-verification hits roadblocks.

No single screening method is foolproof. When previous landlords are unavailable, landlords should aim to cross-reference information from multiple alternative sources to make a well-informed decision about applicants. Establishing a thorough, consistent screening process is key.

Using Third-Party Rental Verification Services

Many landlords opt to use third-party tenant screening and rental verification services to streamline the process and access more comprehensive data. These services can provide an efficient way to quickly verify an applicant's rental history, payment behavior, eviction records, and other details from a multitude of sources.

Third-party rental verification services gather information from previous landlords, property managers, collection agencies, and public records. They leverage automation and data integrations to compile a rental verification report far more efficiently than a landlord could on their own. The reports typically include:

• Dates of tenancy at previous rentals
• Payment history and outstanding balances
• Reasons for terminating previous leases
• Eviction history and debt records
• Landlord ratings and satisfaction scores

These services charge landlords a fee per rental verification report, with costs ranging from $15 to $75 on average. Most have online platforms where you can quickly order reports and receive them digitally within 1-3 days. Some even integrate directly with property management software.

Pros of Using Rental Verification Services

• Saves substantial time and effort versus manual verification
• Provides comprehensive data from numerous sources
• Reports delivered quickly, often within 1-3 days
• Minimizes the risk of incomplete or inaccurate information
• Scores and recommendations help evaluate tenant risk
• Robust data for better screening and decisions

Cons of Using Rental Verification Services  

• Service fees add up, especially for high applicant volumes
• Reliance on the service's data sources and methods
• Potential errors or outdated information in third-party data
• Landlords lose direct communication with prior landlords
• May miss important context only a prior landlord can provide

Pricing Models

Most rental verification services charge a flat fee per report, with rates typically ranging from $15 to $75. Fees are higher for more comprehensive reports. Many services offer package pricing at a discount for buying credits in bulk. There may also be setup fees, monthly fees for software access, or add-on costs for additional services like credit reports or eviction history checks.

Hemlane's Tenant Screening Services

Effective tenant screening is critical for landlords to ensure they select reliable and responsible tenants. Hemlane offers a comprehensive tenant screening service that includes rental verification, credit checks, criminal background checks, and more. With Hemlane, landlords can streamline the screening process, making it easier and faster to verify tenant information and assess potential risks.

Key Features of Hemlane's Tenant Screening:

1. Comprehensive Reports: Hemlane provides detailed reports that include credit scores, criminal history, eviction records, and rental history. This comprehensive approach helps landlords make informed decisions based on a complete profile of each applicant.
2. Easy Access and Integration: Hemlane's platform is user-friendly and integrates seamlessly with other property management tools, allowing landlords to manage applications, screen tenants, and track all relevant information in one place.
3. Automated Processes: The platform automates many aspects of the tenant screening process, including sending out rental verification requests and collecting necessary documents, saving landlords time and effort.
4. Compliance and Security: Hemlane ensures that all tenant screening processes comply with federal and state laws, including the Fair Credit Reporting Act (FCRA). The platform also prioritizes data security, protecting sensitive information.

By utilizing Hemlane's tenant screening services, landlords can confidently select tenants who are financially stable, responsible, and likely to care for the rental property. This not only helps in reducing turnover and vacancy rates but also protects the landlord's investment in the long run.

Common Rental Verification Mistakes

Landlords must be diligent when conducting rental verification to avoid costly mistakes. One common pitfall is overlooking red flags in an applicant's rental history. Things like frequent late payments, eviction filings, or documented lease violations should raise concerns about an applicant's reliability as a tenant. Landlords need to scrutinize these issues closely.

Another mistake is asking improper or unlawful questions during the verification process. Landlords should stick to inquiries about rental facts like payment history, lease compliance, damages, and reasons for leaving. Questions about protected characteristics like race, religion, or familial status are off-limits.  

Compliance issues can also trip up landlords verifying rental history. Fair housing laws prohibit using rental verification to discriminate. Landlords must apply the same standards to all applicants. Additionally, rules around documentation, authorization, and privacy must be followed.

Finally, some landlords make the mistake of conducting undocumented rental verification checks. Verbal conversations are insufficient all verification details should be requested and received in writing. This documentation creates a record protecting both landlords and applicants.

When to Conduct Rental Verification

Rental verification should be a standard part of the screening process for any new tenant applicant. Verifying past rental history provides crucial insights into an applicant's track record as a tenant before signing a new lease. Skipping this step increases the risk of accepting problematic tenants.

However, rental verification shouldn't just be limited to new move-ins. It's also advisable to re-verify rental history when considering renewals for existing tenants. A tenant's behavior can change over time, so an updated check helps identify any potential issues that may have developed during the current lease term.

Additionally, landlords should strongly consider conducting a rental verification check if serious complaints or violation notices have been raised against a current tenant. Rather than blindly accepting the tenant's side of the story, verifying their previous rental records can reveal if there is a broader pattern of misconduct that needs to be addressed.

By making rental verification a consistent policy for new applicants, renewals, and investigating complaints, landlords can make more informed decisions and mitigate risks throughout the rental life cycle.

Other Tenant Screening Tools

While rental verification is a crucial component of tenant screening, landlords should consider using additional screening tools for a comprehensive assessment of potential tenants. These tools can provide valuable insights and help mitigate risks associated with problematic tenants.

• Credit Checks: Conducting credit checks is essential for evaluating an applicant's financial responsibility and ability to make timely rent payments. A credit report can reveal payment histories, outstanding debts, bankruptcies, and other financial red flags that may indicate potential issues.
• Criminal Background Checks: Running criminal background checks can help identify applicants with a history of criminal activities, such as property crimes, violence, or drug-related offenses. This information can help landlords make informed decisions and ensure the safety and security of their properties and other tenants.
• Employment Verification: Verifying an applicant's employment status and income is crucial for assessing their ability to afford the rent. Landlords can request pay stubs, tax returns, or contact the employer directly to confirm the applicant's employment details and income level.
• Previous Eviction Checks: Checking for previous evictions can provide valuable insights into an applicant's rental history and potential issues with following lease agreements or paying rent on time. Eviction records can be obtained from public records or through specialized tenant screening services.

By combining rental verification with these additional screening tools, landlords can gain a comprehensive understanding of an applicant's background, financial situation, and potential risk factors. It's important to follow all applicable laws and regulations when conducting tenant screening and to treat all applicants fairly and consistently.

Tenant Rights and Rental Verification

Tenants have certain rights when it comes to rental verification checks conducted by prospective landlords. It's crucial for landlords to be aware of these rights and to handle the verification process responsibly and ethically.

• Consent Requirements: Landlords typically need to obtain written consent from applicants before conducting a rental verification check. This consent should clearly outline what information will be collected and from what sources. Tenants have the right to deny consent, although this may impact their rental application.
• Disputing Errors: If a rental verification report contains inaccurate or incomplete information, tenants have the right to dispute the errors. Landlords should provide a process for tenants to review the report and submit evidence to correct any mistakes.
• Limitations on Information Collected: There are limitations on the types of information that landlords can collect during a rental verification check. Generally, they can only obtain information that is relevant to the applicant's ability to pay rent and abide by the terms of the lease. Certain personal details, such as medical history or disability status, are typically off-limits.
• Fair Housing Laws: Rental verification processes must comply with fair housing laws, which prohibit discrimination based on factors like race, color, national origin, religion, sex, familial status, and disability. Landlords cannot use information obtained during verification to unlawfully discriminate against applicants.
• Privacy Protections: Tenants have a reasonable expectation of privacy regarding their personal information. Landlords should take appropriate measures to safeguard any data collected during the rental verification process and ensure it is not misused or shared improperly.

By respecting tenant rights and following proper procedures, landlords can conduct thorough rental verification checks while maintaining ethical and legal standards. Open communication and transparency with applicants can also help build trust and foster positive landlord-tenant relationships.

Discover the Benefits of Hemlane's Comprehensive Tenant Screening Services

Choosing the right tenants is essential for maintaining a successful rental property, and Hemlane's tenant screening services provide landlords with the tools they need to make informed decisions. By offering comprehensive reports that include rental verification, credit checks, and criminal background checks, Hemlane helps landlords identify reliable and responsible tenants. The platform's easy integration, automated processes, and commitment to compliance and security make it a top choice for property owners looking to streamline their tenant screening process.

Ready to simplify your tenant screening and find the best tenants for your property? Sign up for Hemlane today and take advantage of our robust screening services. With Hemlane, you can protect your investment, reduce risks, and ensure a smooth rental experience for both you and your tenants. Start your free trial now and experience the Hemlane difference.