Handling a Rental Application
When it comes down to selecting a new tenant, the application process is one that cannot be skimped. The rental application is the first step in weeding out tenants who will cause you grief. Without it, you have very little information at hand to help you make your choice, and you’d be just as well rolling a dice. Think about it this way: if you were an employer looking to make a new hire, you’d require the candidate to fill out and provide an application form along with their resume, yes? Well this is the same thing, or at least should be looked at as such; being a landlord is a business venture in and of itself, making you the head of the company, and giving you the responsibility of selecting candidates to man the front lines. In this analogy, the tenant is that candidate. You wouldn’t want an incompetent employee manning your storefront, would you? So why would you want an unqualified individual running your rental property? By undergoing a thorough application process you’ll be able to collect pertinent information on your prospects, obtain consent to gather and disclose said information, set out terms and conditions of the potential tenancy, and collect a security deposit once an offer of lease is executed. All of this will aid your end goal of a successful tenancy.
Ok, so we’ve established the importance of the rental application process. What kind of information should the application process set out to gather? For starters, you’ll want some proof of identification. This could be a valid driver’s license, a health card, or any other form of government ID. You’ll also want to know if the applicant is currently renting, and if so, who is the current landlord? Furthermore, past landlords will be equally as pertinent. When asking for this information, be sure to request move in and move out dates to judge their moving patterns. If the applicant seems to move every 6 months, meanwhile you’re looking for a long-term tenancy, that should be a sign that this applicant is not the right fit. Collecting employment verification, proof of income and length of employment will also be important as it will directly reflect the applicant’s likelihood of paying rent on time, every month. Requesting the prospects S.I.N is considered an acceptable business practice under Section 21 (3) of the Ontario Human Rights Code.
In addition, credit checks, personal references as well as professional references will be a necessity. In terms of the credit check, you have the choice of requesting the prospect to provide it or obtaining it yourself using the applicant’s S.I.N, as running a credit check does come with a small fee. If the tenant refuses the credit check, there’s a good chance they are trying to cover up a bad credit score. With that said, they may just be worried about an inquiry affecting their credit score. Be prepared to ask the applicant questions in this type of scenario, and to use your best judgement when gauging their answers. Paired with the credit check, you’ll want to run a background check. Typically, you’ll only need the applicants S.I.N for this as well.
Once you’ve gathered all the necessary information, you’ll be at the point in which you’ll need to make some phone calls. For starters, you’ll want to contact the tenant’s employer. Speaking with the employer will give you peace of mind knowing that the prospect has steady work with a consistent flow of income. Moreover, the employer may be able to provide insights into the prospects character and personality. On that note, you’ll also want to reach out to both the personal references as well as the past landlords. I would argue that past landlords are of utmost importance; personal references can easily feel that they must provide a glowing reference in hopes of helping the applicant out. After all, a personal reference is typically a friend or family member who will only want the best for the applicant. Past landlords on the other hand are more likely to give you the type of information you’re looking for, unbiased. One thing to keep in mind, a current landlord may give a glowing reference in hopes of getting the prospect out of their rental space. So be wary when dealing with current landlords, and be sure to match up what they tell you compared to past landlords.
Assuming the applicant has made it this far, it’s this stage where you’ll want to interview the applicant one on one. It’s often one on one meetings in which you gather the most important insights.
By following these guidelines, you’ll greatly reduce the risk of a bad tenancy.
