Choosing the wrong tenant can lead to lost income, litigation costs and damage to your property. Conducting a background check on prospective tenants is a wise way to ensure a mutually successful experience for you and the applicant, and it’s an effective risk management tool. Although background checks do have some costs, taking on tenants without performing a screening carries a significant risk — costing you more money in the long run.
Many applicants have criminal records, but they do not disclose this information. Therefore, consider these advantages of pre-screening:
- Discourages applicants from hiding a criminal background or falsifying their credentials.
- Eliminates any uncertainties about applicants.
- Encourages honesty while going through the leasing process.
Extent of Background Checks
At a minimum, it is advisable to review an applicant’s criminal history, as it may be a factor to consider when allowing him or her to become a tenant. Searches for criminal records might include federal, provincial and area records.
Besides the basic criminal background check, take a risk-focused approach to determine additional levels of screening, which might include identity verification, employment verification and professional license verification.
An additional level of verification that is essential for a background screening of a potential tenant is a credit check. This can provide further verification of Social Insurance Number and employment information and can reveal crucial information about the applicant’s ability to make payments responsibly.
The background check will be more valuable and less costly if the application contains these elements: A statement that all information is accurate and a statement that any untruthfulness or omissions are legal grounds for termination of the lease. A standardized format that consistently collects all necessary information will also speed up the background screening process. Some other helpful elements include:
- Detailed contact information for references, including contact information for past landlords
- Any other names used by the tenant
Using a Background Screening Provider
To simplify the task, you may find it helpful to outsource the process to a background screening service provider. For many screening tasks, such as criminal background checks, outside providers can be faster and more thorough. It is important that when selecting a provider, you consider its financial health, its hiring and employment processes, identity theft safeguards, and, of course, its service offerings.
One way to streamline the process is to use an online application that requires certain fields necessary for the screening to be completed. The completed fields can be linked directly to the screening provider’s website, which will extract the necessary information for the background check. When a need for revision arises, the form can be easily modified.
Contact Access Insurance Group Ltd. if you need more information about protecting yourself from liabilities associated with tenants. Our insurance professionals can keep you covered and give you peace of mind!