Landlord Newsletter June 2006 Part 2 Credit Reports & Collection

Today's edition is the second segment of a two part LPA Newsletter.
I hope you enjoy both parts this month's LPA Newsletter. Please e-mail us if you have any questions or would like to add or share any material / information. Have a great month.
John Nuzzolese
John@theLPA.com

Click here for Part 1 of the June 2006 LPA Newsletter

Credit Reports for Collection Purposes

Can I Run a Credit Report to Locate my Tenant who Owes me Money?

A common misconception landlords have is that they can run a credit report on a tenant if they have the tenant’s social security number. You must have the applicant’s written authorization explicitly for running a credit report. It is illegal to pull a credit report without the tenant's written authorization according to the FCRA (Fair Credit Reporting Act). There could be very serious ramifications if you order credit reports without written authorization.

So, what if you have written authorization on your tenant's rental application to run a credit check?

As you know, it is illegal to obtain a credit report on a rental applicant without his or her expressed written authorization. The same is true for banks and credit card companies, only they have you sign an authorization that allows them to continue to check your credit report.

Most lending institutions run credit reports from time to time on their borrowers for various reasons. Sometimes, to determine eligibity for credit line increases or account renewals, and also to track down delinquent debtors.

Why can't landlords do the same thing? They can, but most landlords are not legally prepared to do it.

Here is the clause to insert into your LPA Rental Application, so that if in the future you have to chase down a tenant by checking his credit report for a forwarding address or employer.

<!-- Start Copying here --> I HEREBY AUTHORIZE LANDLORD/AGENT TO VERIFY THE VALIDITY OF ALL THE ABOVE INFORMATION, AND TO INQUIRE NOW OR PERIODICALLY WITH MY EMPLOYERS, FINANCIAL INSTITUTIONS, AND ANY OF THE CREDIT REPORTING BUREAUS AVAILABLE TO HIM. I AGREE TO SUPPLY ANY ADDITIONAL INFORMATION NEEDED BY OWNER/AGENT TO PROCESS THIS APPLICATION AND I ACKNOWLEDGE THAT MY DEPOSIT WILL BE FORFEIT IF I DO NOT COMPLY WITH ANY SUCH REQUEST. I AGREE THAT MY SCREENING FEE OF $ ______ IS NON-REFUNDABLE. <!-- End Copying here -->

Just copy and paste the above updated clause into your LPA Rental Application over the original.

Even with the permission to run ongoing credit reports on your tenant, the you should keep in mind that each report you pull will show up on the credit report as an inquiry. Excessive inquiries on a credit report are harmful to the subject's credit rating. The landlord must be responsible with this privilege which is only intended to protect the landlord in collection or renewal evaluation circumstances.

Disclaimer: State and local laws may vary, so The LPA recommends you seek an attorney's advice before ordering additional credit reports on tenants.

I've been asked dozens of times in the last year to create a new form to help landlords ask the right questions on the telephone to help determine if the caller is someone you'd like to set an appointment to show your rental to. The LPA's new Tenant-Finder™ Pre-Screening Telephone Worksheet has developed from a simple prospect card into a handy and more complete screening tool for telephone interviews.

Limited Time Only: Free Download for LPA Newsletter subscribers. (Exp. 6/30/06) Tenant Finder™ Pre-Screening Telephone Worksheet Tenant Finder™ Pre-Screening Telephone Worksheet

Have you ever met prospective tenants at your rental property, shown it to them, had them fill out a rental application only to find that they were nowhere near qualified? A simple pre-screening telephone interview can be a major time saver. Why not focus your attention on the most qualified prospects?

Before giving out the address of your rental property and committing your time to a doomed appointment with an unqualified renter, you have a chance to more carefully evaluate which prospects are worth meeting with.

I feel very strongly about strict tenant screening, which begins at First Contact with the tenant. First Contact is when you speak with the potential tenant for the first time, usually when they respond to one of your rental ads. At that point, you have the opportunity to learn what you can about this person's current situation. Are they employed? Can they afford your rental? Do their moving dates correspond with your rental's availability? Is their credit rating acceptable? And so on.

After completing your Tenant-Finder™ Pre-Screening Telephone Worksheet, you can use the scoring area to evaluate your new prospect. Print up a pile of them to screen your next tenant!

Eliminate bad tenant risks before spending your valuable time on them.
"Eliminating a bad tenant before I even have to meet him is what I consider the cheapest eviction I can have!" - John@theLPA

• in person (preferable)
• sent by certified mail- return receipt requested
• regular first class mail combined with the above. We recommend getting a certificate of mailing receipt from the post office whenever you mail an official notice by 1st class (regular) mail.

"I'm expecting a death in the family pretty soon. After that, I'll be all caught up."

"I can't pay the rent AGAIN this month, I need to buy another van in order to get to work."

"My computer crashed and cost me over a week of work."

"Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved." - Helen Keller

"Education: that which reveals to the wise, and conceals from the stupid, the vast limits of their knowledge." - Mark Twain

"Do not anticipate trouble, or worry about what may never happen. Keep in the sunlight" - Benjamin Franklin

"Injustice anywhere is a threat to justice everywhere." - Martin Luther King Jr.

"When someone asks you, A penny for your thoughts, and you put your two cents in, what happens to the other penny?" - George Carlin

A Way of Being
- Gary Link, Attorney at Law

"How much did your last tenant problem cost you?"
- John Nuzzolese

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3. The beginning date of your membership will be listed to the left of your membership order # in this format: YYYYMMDD
   

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