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 Tenant Check Tips for Landlords and Property Dealers

ATC gives a lot of importance to following a commonsense approach. While making a decision to let out your property, we help simplify your decision making process and recommend the following:

     
     
     
     
     
     
     
     
     
     
 
 1. Know the Law

Basic awareness on laws of the land, especially related to tenancy must be known. For example, did you know that both Landlords and Property Dealers must comply with Section 144 of Criminal Procedure Code (CrPC) and Section 188 of Indian Penal Code (IPC)?

Both the above Sections mandate the police verification process before letting out a property on rent.

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 2. Set policies and standards in advance
Policies and standards are nothing more than decisions that have been made before the need to implement them arises. In the rental business space policies and standards relate to the quality of tenant you desire, the type of rental arrangements you want to make, how you will go about finding and attracting such tenants, and so on. These policies and standards should be a realistic minimum that you are willing to accept in a long-term tenant.
Policies and standards are critical if you delegate the task of qualifying prospects to employees or outside contractors. Even if you do not delegate, there are still sound reasons for having them. You can formulate these policies and standards when your properties are all full and there is no pressure to fill a vacancy. Rationality is most likely to prevail in such an atmosphere.
We must also consider the question of what will happen when - "when" is used deliberately - a disgruntled tenant complains he was rejected due to some form of invidious discrimination. That this must be considered is, perhaps, unfortunate, but it is nevertheless true. All of the gimmicks in the world will not shield you as effectively against discrimination litigation as will rational policies rationally enforced. If you are able to show that you have such standards, and that you apply them consistently, and that the disgruntled applicant did not meet them, or that another applicant for the same property was more qualified, then you will put an end to any claim of invidious discrimination.

The best way to show you have policies and standards is to show them. In other words, they should be visible, that is, in writing.

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 3. Create your criteria for tenancy

As a landlord it is important to create and pre-define your criteria for rent. Such criteria helps you shortlist the best prospective match for your property. Some general guidance would include:

- Unsatisfactory references from landlords, employers and/or personal references.
- Evictions.
- Frequent moves: You should decide what constitutes frequent moves & apply the same criteria to  every prospect.
- Too short a time on the job: As with frequent moves, you should decide what too short a time is and apply the same criteria to every    prospect.
- Too new to the city: There is nothing to say you have to rent to people who have just moved to the city. Be careful, though, many    times these would be excellent tenants. Use your own judgment on this aspect.
- No verifiable source of income.
- Too many intended occupants for the rental property.

Your ATC relationship manager can help you create a customized tenancy criterion for your property.

When you have to finally tell a prospective tenant that his/her application has not been accepted, you may choose to do it in several ways. Here are two suggestions:
--> Favorable consideration was not given to your application to rent as there were other more suitable tenants.
--> Favorable consideration was not given to your application to rent as it did not meet our (my) criteria for tenancy.

If queried as to why specifically the application was denied, you should only repeat your stated reason. You do not have to provide a prospect with further explanation or show them the Tenant screening report. If a prospective tenant insists for their report please direct them to Absolute Tenant Check.

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 4. Take your time

You have already invested your time in ensuring that you are legally covered and have also defined your policies, standards & tenancy criteria.

There are times when one really wants to move fast, as when one is evicting a tenant. When one is screening to fill a tenancy, or a prospective one, we need to take time. Take time to obtain all of the information you have decided ahead of time that you need, then take time to decide what needs to be verified. Don't hesitate to reject a prospective tenant if they do not meet your minimum standards, and don't necessarily accept the first minimally qualified tenant who shows up. You wouldn't accept the first barely qualified applicant if you were offering a job; you would wait until you had several applicants to choose from and go after the most qualified one first. Offering a property for rent is no different. It is true that you lose money every day the property is vacant, but you will lose more in the long run by taking a marginally qualified tenant who turns into a problem. In addition, you will get very sore from kicking yourself for being in too big a hurry to wait for that ideal prospect that came in two hours or two days after you accepted your first applicant.

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 5. Make your standards realistic
If you own or manage a 20-apartment building, you might be able to stand a vacancy or eviction more easily than if you have only a single-family home. A rent default on an apartment in the building deprives you of 5% of your cash flow; a rent default in your single-family home deprives you of 100% of it. Keep in mind that the market will determine the quality of prospect you can expect. This is something you will have to consider very carefully as you make the decision to rent out.
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 6. Talk to prospects

As a Landlord or Property Dealer you must ensure that before you take a decision to let out your property, you have met the tenant in person and have spoken with him in detail about your policies, standards & tenancy criteria. This meeting will give you a good idea about your comfort level with the prospective tenant. Such a meeting can also be a very valuable source of picking up nuances and bits of information that may not come out clearly in the application forms.

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 7. Write everything down
If it is not written down, it was never said and it never happened. That is the rule of thumb.

Don't let anyone into the property until the tenant verification is done and money has changed hands.

Some Landlords & Property Dealers occasionally jump the gun, and in their anxiety to get a property rented, or snag that ideal tenant, let the tenant move in before the verification and sign-up process is complete.

Never permit yourself to make this mistake. Resist the temptation to let the prospect in before you have complete information on them.

There is only one appropriate time to give the tenant a key, and that is after you have taken the application, checked everything you could and resolved any discrepancies to your satisfaction, and money has changed hands. Never let a prospect into your property in exchange for a personal check for advance rent and deposit. Insist that the check clear the bank.

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 8. Don't be tyrannized by forms

It is a common tendency for most people to be weary of filling forms, however being a Landlord or a Property Dealer you must insist that the prospective tenant always fills the form 100%. It is also important to note that if a particular data field is not in the form the information will never get disclosed to you. Please do not hesitate in working with us to improve the ATC application form so that you get all the information you think is important.

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 9. Read and analyze the material you accumulate on a prospect

The objective of ATC is to capture as much relevant information as possible through the forms, so as to help you reach a rational decision. We recommend that you place together all the information and analyze the same for anomalies, if any.

In addition:
- Don't believe anything that you are told and/or what is on the Tenancy Application. Have it always verified & checked.

 - Make sure that the tenancy application has been completed in its entirety. If a prospective tenant only completes part of it, he/she may be hiding something, which may be an indication of potential problems that you may not want to deal with.

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 10. Use a professional

Consider engaging the services of a professional to find and screen prospective tenants. Generally, such professionals fall into two categories.

A tenant finder or a Property agent offers a turnkey type operation. Such a company will locate a suitable prospect, usually from a list of shoppers who have signed up with them, qualify him, talk him into a lease arrangement, turn him over to you and in the event you decide to pursue further they would assist with the lease and the mandatory police verification paperwork. The fees for such services are typically all or a part of one rental installment, depending on what services you actually contract for. Many such property agents may claim to screen or verify the antecedents of a prospect themselves, however, this activity is directly a conflict of interest with their principal business & hence, you should avoid having your property agent screen the prospective tenant.

A professional tenant screener offers their services, often over the Internet or through personalized means. They provide background & tenancy information on prospects leaving the final decision & the close to you. Signing up and moving in a prospect is totally up to you.

Some service providers claim to undertake tenant screening and generally bundle it with other landlord-tenant services. As a Landlord or a Property manager you should be careful dealing with companies whose core business is not screening.

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