In the United States, at least 100 million people rent the homes and apartments that they live in, contributing hundreds of billions of dollars to a critical component of the real estate sector. The rental market does not only represent massive property management firms and moguls with broad; many real estate professionals own only one or a few properties. In both cases, protecting the substantial investment that a landlord makes in each property means being careful about who becomes a tenant.
Screening tenants through an application and vetting process is an essential step for landlords. The goal is simple: to secure a timely source of rent from someone who can keep a rental unit in good shape for future tenants. In the past, landlords enjoyed a broad latitude in how they screened tenants and what could count as a disqualifying factor. However, "fair chance" laws have made the leap from the employment sector to the rental industry, and they’ve brought with them many changes for landlords and tenant screenings.
Landlords Must Contend with an Evolving Regulatory Landscape
Under these rules, implemented in varying forms in areas that include Seattle, Portland, and the state of New Jersey, landlords face restrictions on when and how they may use background checks to screen tenants. Proponents of these protections point to America's high rates of incarceration and recidivism as signs of the need for easier access to housing for ex-offenders. Those in opposition believe that it puts too great a burden on landlords while infringing on their ability to make tenant choices that they think are safe.
Rules proposed in Minneapolis in August 2019 represent a textbook example of how these policies may function. According to MinnPost, under the proposed guidelines, landlords would no longer be able to deny applicants based on certain felony convictions if they occurred between 7 and 10 years ago; the limit for misdemeanors would be 3 years. Landlords could not consider non-conviction arrests. Legislators have also proposed prohibiting tenant decisions based solely on credit score.
Tenant Screening Remains a Vital Step in the Rental Process
Under evolving “fair chance” trends, rental property owners still recognize the need for thorough vetting. Minneapolis legislators proposed an alternative path for those who wished to continue with their existing tenant screening procedures: those landlords would need to conduct a personalized tenant assessment. With potential access to such an option even under shifting “fair chance” expectations, it may benefit landlords and rental operators to reconsider the efficiency and effectiveness of their existing tenant vetting solutions.
Governmental efforts to reduce discrimination in the housing market may come and go, but the need for landlords to have access to an effective and compliant way to screen potential tenants remains the same. Having all the facts in hand makes the rental approval process simpler and safer for landlords. backgroundchecks.com provides a variety of essential tools to suit this purpose, including instant criminal history results through our US OneSEARCH. Find out how these products support landlords nationwide.
About Michael Klazema The author
Michael Klazema is Chief Marketing Technologist at EY-VODW.com and has over two decades of experience in digital consulting, online product management, and technology innovation. He is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments.