Possible consequences of inadequate resident screening in apartment rentals

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Possible consequences of inadequate resident screening in apartment rentals


I pulled this important article from PropertyManager.com  It reviews why resident screening is such an important part of property management.

The Possible Consequences of Inadequate Resident Screening

by Mary Girsch-Bock 

We’ve all seen the ads – ‘no credit check, no deposit, move-in today!’ While some property managers may luck out and rent to a resident who does not skip out on the lease, does not destroy the property, and has adequate income to cover the rent, by running ads such as these, managers are opening themselves up to more significant problems than a renter that pays late, or perhaps doesn’t pay at all.

While it’s fairly obvious what the more common repercussions of inadequate resident screenings are, managers, in their haste to rent a long-vacant unit, may not be taking into account the fall-out that can occur by skimping on adequate tenant screenings.

Here are just a few:

1.  Violation of Fair Housing laws. If prior tenants have been screened and leasing decisions made based on the results of those screenings, prior applicants that were turned down based on screening results may have a legitimate basis for a lawsuit. It’s important to make sure that ALL applicants are screened in a similar fashion. If a property manager makes the decision to not screen a tenant – they cannot later deny a tenant based on the results of a background screening.

2.  Loss of your business reputation and credibility. Once a property management company posts an ad similar to the one mentioned above, they will likely lose credibility with potential applicants. The decision to not screen applicants may also discourage current residents from renewing their lease. The damage to a business’s reputation can take years to repair and the trade-off not worth the cost.

3.  Increased property damages. In fact, potential damages can escalate dramatically. While careful screening will not eliminate all undesirable residents, unreliable residents tend to balk at the proposition of a lengthy background check. And while security deposits will not cover significant damages to an apartment or a home, it sends a message of expectation to the potential resident that they are responsible for the unit they take possession of. If residents feel that you do not value your property enough to take care of it, chances are that they won’t take care of it either.

4.  Increased criminal activity. Again, while running a careful screening may not eliminate the potential of renting to those with a criminal past, it will certainly help to eliminate most. Your current residents likely signed a lease with the expectation that their home would be safe and crime free. It’s your responsibility to ensure that to the best of your ability.

Bottom line – while no one likes vacancies, renting to an applicant without adequate screening can create more long term damage than just late rent.

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