Making sure that you have a water-tight selection process for potential tenants is essential for any landlord. While parts of the process may vary from person to person, there are some elements of the selection process that every landlord needs to consider. These include;
Applications
PIPA
The Human Rights Code
Credit Checks
References
Tenant Application
A fundamental part of finding a suitable tenant is ensuring that you have a thorough application process. A vital aspect of this is drawing up a comprehensive ‘application for tenancy’ form.
Landlords should keep in mind that there is certain information that you cannot ask for on an application form under both the Personal Information Protection Act and the Human Rights Code.
PIPA
The Personal Information Protection Act protects people from having their personal information disclosed and giving people the right to access information that is held about them. This typically includes necessary personal information such as phone number, address, social security number, banking information etc.
Within PIPA, potential landlords can request to see someone’s ID but not make a copy of it for their files.
You may ask for proof of income, such as a bank statement but must provide a reason for doing so.
Landlords are required to protect any personal information they hold on their current and prospective tenants.
The Human Rights Code
Landlords must be familiar with the Human Rights Code to avoid being accused of discrimination. Specific personal characteristics are protected under the code. It is classed as discrimination in the law’s eyes if someone is denied a benefit such as housing because of a personal characteristic.
You cannot deny someone tenancy due to their marital or family status. You also cannot deny someone a tenancy because of their job (as long as their income is lawful) or based on their sexuality or sexual identity.
Credit Check Ratings
As a landlord, you are allowed to request a credit check for a prospective tenant if they cannot provide you with employment references or other ways to verify their income. After all, you need to make sure they can afford to pay their rent!
However, you must obtain the person’s consent receiving the credit check and give a reason for getting it.
When reviewing someone’s credit check, you should look out for warning signs such as; low credit score, late payments and Collections and Small Claims Court cases. Although not definitive, these may pose as red-flags when assessing whether someone will be reliable paying their rent.
Checking References
Checking references is probably one of the most critical screening procedures you can undertake when assessing a tenant’s suitability.
There are two types of references that you can request; landlord references and employment references.
Regarding the landlord references, you should ask the obvious questions such as ‘did they pay the rent on time’ and ‘why did they end the tenancy?’.
Employer references will generally just confirm that the specific individual works for the company. They may disclose salary information but not always.
The Selection Process
The final selection process comes down to your personal feelings about the prospective tenants. If you have more than one applicant whose references and credit checks all look good, then it really just comes down to your own gut feeling as to who you feel happy renting your property to.