Protecting yourself from tenants starts with including some precise disclosure language in the rental application. Tenants must be told that you intend to investigate their background and may include residency, employment, military, government databases, personal and professional references, social media, character, records of attendance and earned degrees or certificates and more. You need to be point-blank and tell them that by executing the application they are authorizing you to not only check out the information they give you, but share said information to third parties you work with that have a legitimate right to it, plus, contribute to those databases your experience with the tenant. You must protect yourself. You need to cover yourself on many issues before the tenant moves in, during their stay and after they move out.
The consumer protection laws (Fair Credit Reporting Act) are designed to protect consumers (tenants) with regard to who has access to their information, as well as who we (the property manager) can share that information with. If you don’t get the tenant’s authorization to investigate (and pass on) their personal information you’ll expose yourself to both FCRA claims as well as civil claims for damages and attorney fees. You must protect yourself.
Once they’ve completed the application it’s impossible to go back and ask them to execute this special protection language so this language needs to be on the last page of the application, just before their signature line.
Note: In 2016 I was hired by the Atlanta law firm of Weissman Nowack Curry & Wilco as an expert witness in a federal discrimination case against a local property manager with this kind of language in their application. Because they protected themselves with language like this, it will be easy to get him off the hook in the claim as long as their practices match their qualifying guidelines.
The longer you’re in property management the more you realize that it’s sticky, often hostile, and sometimes even litigious. Over 35 years we’ve been burned many times by tenants and after the second or third time (we’re slow learners), we go back to the attorney and have them draft a document that prevents it from ever happening again. Blaming the property manager has reached an all-time high and isn’t going away anytime soon. So, understanding this reality, smart managers need to spend extra time, money and effort building and crafting documents designed to protect themselves, even from those they are trying to serve. We’ve pulled these documents from our archives and have listed them here for your review and individual download (or in packages by topic). We’ve laid them out in the Property Management Life Cycle categories to give the discussion some order.
Protecting yourself from tenants is what these documents are all about.
Download (PDF, 417KB)
The Property Management Lifecycle by Crown Investor Institute LLC