A thorough rental application process protects both landlords and tenants. It ensures a good match, leading to a stable tenancy and a positive living situation for everyone involved. For a landlord, a carefully vetted application can prevent many future problems, from late rent to property damage. For a tenant, it guarantees they are moving into a professionally managed and responsible home.
Even seasoned landlords can fall into common traps during this crucial stage. Overlooking red flags, making hasty decisions, or failing to follow proper legal procedures can lead to problematic tenants or even legal action. This article will outline frequent errors landlords make and provide practical strategies to avoid these pitfalls, ensuring a smoother and more secure rental experience for all parties.
Mistakes Landlords Make on Rental Applications
Landlords often encounter significant hurdles when reviewing rental applications. Simple oversights can lead to serious consequences, highlighting the need for a systematic and careful approach. It is crucial to be diligent and follow established protocols to ensure a fair and legal process.
Mistake 1: Failing to Verify References
A common error is not thoroughly checking the references provided by applicants. Some landlords might simply call and hang up, or worse, not call at all. You need to verify that the person you are speaking with is actually the current or former landlord, not a friend posing as one.
How to Avoid: Create a list of prepared questions for each reference. Ask about the applicant’s payment history, whether they were respectful of the property, and if they caused any issues with neighbours. Call the number on the application and also try to independently find the property management company’s number to confirm the reference is legitimate. Negligent reference checks are a recipe for future trouble.
Mistake 2: Ignoring a Credit Check
Some landlords skip credit checks to save time or money. This is a significant risk. A credit check provides a detailed financial picture of the applicant, including their debt-to-income ratio, payment history, and any bankruptcies or collections. This data offers a reliable indicator of their financial responsibility. Proper tenant screening should always include this step.
How to Avoid: Always run a credit report through a reputable agency. Require applicants to provide written consent for the check. Review the report for a history of late payments, significant debt, or other financial instability. This helps assess their ability to pay rent consistently.
Mistake 3: Making a Hasty Decision
Rushing to fill a vacancy can cause landlords to overlook key details on an application. An empty unit means lost income, but a bad tenant can cost far more in the long run. Acting too quickly on the first seemingly good application can lead to regret later.
How to Avoid: Establish a clear timeline for the application process. Set a date to review all applications at once instead of one by one as they come in. Take your time to compare all qualified applicants and make a thoughtful choice. This prevents you from settling for the first person who applies and helps with a thorough application review.
Mistake 4: Discriminating Against Applicants
Under the Ontario Human Rights Code, landlords are prohibited from discriminating against tenants based on protected grounds like race, creed, family status, or gender identity. A landlord might unknowingly make a decision based on a prohibited ground, which could lead to a Human Rights Tribunal complaint.
How to Avoid: Create a set of objective criteria for all applicants. Base your decision solely on factors such as credit score, income, and rental history. Document your reasons for selecting or rejecting an applicant, ensuring they are based on these neutral criteria. Use an equitable screening process to protect yourself legally. The Made in CA survey states that 33.1% or about 5 million of Canadians are renters, so it is a significant market to approach legally.
Mistake 5: Not Having a Formal Application Form
Relying on verbal information or an informal document for applications is a mistake. A formal, standardized application form ensures you collect all the necessary information in a consistent manner. Without one, crucial details like previous addresses or employment history may be missed.
How to Avoid: Develop a comprehensive application form that asks for all required information, including personal details, employment history, previous landlord references, and consent for background checks. Ensure every applicant completes the same form, creating a clear and consistent record. This promotes a standardized tenant application process.
Mistake 6: Failing to Follow Up on Missing Information
Applicants might submit incomplete forms, hoping a landlord won’t notice. Some landlords simply discard these applications without attempting to get the missing information. This can cause you to miss out on a good tenant or approve someone without having the full picture. Tenant verification mistakes are often a result of this.
How to Avoid: Always review applications for completeness immediately after receiving them. If information is missing, contact the applicant and give them a reasonable deadline to provide it. If they fail to do so, document the communication and move on to the next applicant.
Mistake 7: Not Conducting an In-Person Interview
While technology allows for virtual screenings, an in-person or video interview is a valuable part of the process. It allows you to meet the applicant and assess their personality, communication skills, and demeanour. You can get a sense of whether they will be a respectful tenant and neighbour.
How to Avoid: Schedule a brief, professional interview after reviewing their application. Ask structured questions to confirm details and get a sense of who they are. Pay attention to how they present themselves and if they can answer questions clearly and honestly. This is a critical step in vetting potential renters.
Mistake 8: Ignoring Background Check Results
A background check can reveal a criminal history or a past eviction. A landlord might see a good credit score and ignore a red flag from a background check, thinking it is an outlier. The information from a background check, if relevant, is important and should be taken seriously.
How to Avoid: Establish a clear policy on what kind of background information is a deal-breaker. Consult legal counsel to ensure your policy does not violate any human rights codes. If a background check reveals something concerning, and it is relevant to the tenancy, follow your pre-established policy. This is part of a rigorous screening method.
Mistake 9: Not Keeping Proper Records
Failure to maintain records of applications, communications, and screening results can be a liability. If an applicant claims discrimination, you need to be able to show a clear, objective reason for your decision. Without proper documentation, it becomes a “he said, she said” situation.
How to Avoid: Keep a file for every applicant. This file should contain the application form, credit report, background check results, and notes from reference checks and interviews. Store these records securely and confidentially. Landlord record-keeping practices protect you from legal challenges.
Mistake 10: Using an Outdated Lease Agreement
Using a generic or outdated lease agreement is a common mistake. Lease agreements must comply with local and provincial laws, such as the Residential Tenancies Act, 2006 in Ontario. Using an old form can mean key clauses are missing or are no longer legally enforceable.
How to Avoid: Always use a current, legally compliant lease agreement. In Ontario, this means using the Standard Lease Form. Ensure you understand every clause and that it protects your interests while complying with the law. This ensures you have a legally sound rental agreement. According to the Government of Canada, residential tenancies are a provincial and territorial responsibility, so it is vital to adhere to local legislation.
The process of finding a new tenant is complex, but it is one of the most important aspects of being a successful landlord. By avoiding these common mistakes, you can significantly reduce the risk of a bad tenancy. Proper screening protects your investment, maintains a positive living environment for all residents, and ensures you stay compliant with the law.
Diligent screening from the start is the foundation of a successful landlord-tenant relationship. Taking the time to verify information, conduct thorough checks, and make an objective decision based on concrete data will pay off in the long run. If you need help with your tenant screening process, we are here to assist. For professional landlord advice and screening assistance, contact Rest East Property Management at (343) 880-EASY (3279).