I generally go back to the past two residences of the applicant.
We have a strict policy regarding approval with bad rental references. If an applicant has ever broken a lease, been evicted, or sued for rent or property damages, then they are declined.
Now let's give an example of what a previous landlord might say about a former resident:
Landlord had to file for eviction in 2002, and was awarded a money judgement. If the applicant has paid the judgement or not, it may also appear in public records. Let's say it appears in public records, but applicant can prove it HAS BEEN PAID. What do you do?
That's just a no, no question. It is one thing to have broken a lease or owed money upon move out. This is significantly more and shows irresponsibility - The landlord had to file for eviction to remove the tenant. I automatically deny any application for prior evictions, bankruptcies or foreclosures. Doesn't matter if they have finally taken care of it, it is letting things get to that point that is the problem.
Hi Johnny and Chris,
If on the other hand the prospects bought the house within the last 5 years and the loan has now "reset" to a point that they can't pay sometimes due to a loss of job or set back in their economy. If all their other credit is being maintained, I do accept them. All of this needs to be documented very closely, which is why all these files come to me.
Wow. I didn't think my question would create such a conversation, but I'm glad we're talking about this...
After reading all of the responses, I find it very curious that when it comes to screening, no one seems to consider Fair Housing. Just FYI... I'm not taking sides either way. I just want to hear what everyone has to say.
Every other topic whether it has to do with pricing to amenity hours seems to ultimately end up with "well, because of Fair Housing" and the solution is always black and white.
How can you possibly request information about someone's rental history and make a judgment without seeming biased? We've all said "bad rental history" would be declined. What is "bad rental history?"
Is it more than one late payment? Why are there exceptions to bad credit if they always pay rent on-time?
Also, if someone says they wouldn't rent to them again can you really use that against them? What if the person who is making the recommendation had a bias against your applicant? You wouldn't know it, but you end up continuing the biased behavior.
It all just seems very funny to me. Honestly, I think screening should be more black and white. I realize most people would say that's not the best way, but doesn't something else increase your liability to a lawsuit?
Again, I'm not taking either side. I'm just curious.