LEGAL CORNER by Steve Duringer

Question: I’ve always heard that I should post my rental criteria in a conspicuous place so that applicants can plainly see whether or not they are qualified before they submit their application. I typically require that the applicants combined income exceed three times the rent, however I might make exceptions. Also, in years past, a foreclosure on an applicant’s credit report was an automatic disqualifier, but after attending your tenant screening class, I have reconsidered. With so many exceptions to my rental criteria, my sign would be huge! How do I handle this?

Answer: Yes, it’s a good practice to post your rental criteria in a conspicuous place. The details and specifics of your rental criteria, however, do not need to be included, as these details and specifics are not necessarily static, that is, they may change or evolve over time depending on your situation. For example, your three times income requirement may work fine if you have a single vacancy and a dozen applicants, however it may be a bit too restrictive in the present economy, or in the event you have three vacancies, your phone hasn’t rung in days, and you’ve only received a single application in the past two weeks. Every owner should establish the following as their general rental criteria. A qualified applicant should: i) have a verifiable and positive credit history; ii) have a verifiable and positive past tenancy history, iii) have sufficient and verifiable income to meet his or her present and future financial obligations, and iv) should not pose a risk of harm to the rental property or to others. These general rental criteria can and should be applied equally and fairly to all applicants, and in compliance with all fair housing rules. Once applied, the best applicant should be accepted, not necessarily the first to apply.

Question: Seems like everyone I talk to has a different opinion on the best ways to screen a prospective resident. I’ve been to a few seminars, and it seems that my rights seem to depend on who is giving the seminar; the tenant advocate folks seem to think that I should rent to just about everyone, which just doesn’t seem right. What can I do as a landlord to properly screen my applicants?

Answer: Proper tenant screening starts with a completed application, not one you buy at the stationery store, but the one provided by your apartment association. Identity theft has been a growing problem for years. Landlords have increasingly been victimized by prospects posing as someone else, using false or fraudulent information. Often, these thieves take advantage of a desperate landlord, eager to fill a vacancy, or a newbie landlord who hasn’t gone through the school of hard knocks yet. Completed and signed applications by all adults are a must. Verify the information provided. Personally inspect some form of U.S. government issued photo identification. Make a photo copy of the ID and keep it secured with your file. Verify that the social security or the tax ID number provided by the prospect is actually his number, and is valid. Contact your apartment association and request that they run a credit report and eviction history report. Consider requesting criminal history reports as well, you’d be amazed at the number of felons among us. Understand that the data in these reports is not perfect, only about 60% of evictions in California are reported and appear on the standard eviction data reports. Know that these are merely tools that you must utilize, just know their limitations.

If practical, go outside to the prospect’s vehicle, and verify that the license number on the car he just drove matches the license number he just wrote down on the rental application. Many ‘hands on’ owners will actually visit the prospect’s current residence unannounced, prior to approval to ensure the prospect actually lives there, and doesn’t just sleep on the couch. You’d be amazed at what you’ll learn by a simple visit. A visit about dinner time is generally the most productive, you get to see the prospect with all his friends, family, buddies, a real snapshot of how he’ll act in your building. The car parked on the lawn will be parked on your lawn if he’s approved. If no one is home, talk to the neighbors, they will certainly share their opinions! Inform all prospective applicants that you have a policy of taking a picture of all residents. Follow through with this policy, and when you meet to sign the rental agreement, actually take a picture of all proposed occupants and keep the picture in your tenancy files. This is one of the simplest and most effective tools that keep the drug dealers, identity thieves and gang bangers out of your building. Bad guys don’t want their picture taken, and will not want to live in your building. They won’t even submit the application.

When verifying employment and residency, ask for a description of the person, and compare the description with the person who filled out the application. Don’t trust the phone numbers provided by the applicant; independently verify them through the internet, or phone book. Ask for original bank statements, utility bills, electric, telephone, cell phone, cable, anything with the prospect’s name. Ensure that you establish minimum tenancy criteria, and apply your criteria consistently to all. Verifiable identity, verifiable and positive credit and tenancy history, sufficient and verifiable income to meet his future financial obligations, and verification that the applicant will not pose a risk to persons or property should be required of all successful applicants. Contrary to the fair housing advocates, you don’t have to rent to undocumented persons, or others that don’t have verifiable identification or a verifiable social security or tax identification number.

With the challenging housing market, it’s tempting to relax standards, to rent to those that really cannot be ‘properly screened.’ Many landlords have looked the other way, in favor of the quick rental, the cash payments, the full building, the reduced confrontation; many have taken the easy way out. Landlords have been wary of lawsuits claiming discrimination, and have believed the bullying taunts and threats from the tenant and immigrant rights activists, and have taken the easier and less confrontational course. We blame our government for not addressing the illegal immigration issue; one side of the aisle wanting cheap labor, the other wanting cheap votes. We blame employers for hiring, and our ‘welfare state’ for creating the magnet that keeps drawing.
Landlords are part of the problem as well. By succumbing to the short term temptation of the quick rental to the unverified, the undocumented, we are contributing to the problem we face here in California. Many landlords are realizing that rather than just complaining, they can be a part of the solution.

Landlords have absolutely no obligation whatsoever to rent to an individual who is unable to independently verify his identity, his past tenant history, and his ability to comply with the terms of the rental agreement, including his financial ability to pay the rent. Our society is built around a numeric social security or tax ID number. Our life history, good and bad, is reported more often than not, into a data base that is organized by, and sorted by the social security or a tax identification number. Names are common, but social security and tax identification numbers are unique. No two people should share the same number. Credit as well as criminal convictions are reported similarly.
Once you’ve narrowed the field to a relatively few qualified prospects, select the ‘best’ prospect, not necessarily the first to apply, but the one who excels above the others.

These very basic requirements should be applied uniformly to all applicants. It is just good business sense. With average rents over $1,400.00 a month, landlord investment of $175,000 or more per rental unit, and a litigation climate that is out of control, landlords must know who their residents really are.

Question: I haven’t had to do a security deposit accounting in a while. Can you please remind me of the procedure?

Answer: When a resident vacates, you must prepare and send an itemized statement within twenty-one days of the tenant returning possession. This statement, a form that your apartment association will provide to you, details all deductions from the security deposit. If the deductions for repairs and cleaning exceed $125.00 then the landlord must provide copies of receipts and invoices along with the itemization, along with the name, address and telephone number of the vendor. If the repairs cannot be completed within the twenty-one day time period, you may provide an estimate of the work needed within the twenty-one day period. Upon completion of the work, you must provide receipts and invoices within fourteen days of completion. You and/or your employees may perform the work needed and charge a “reasonable” fee. Since the law provides very little guidance as to what that reasonable fee is, you should maintain logs and time sheets to justify time spent on repairs and the reasonable hourly rate charged. Ensure that you complete a Move Out Inspection form, documenting the condition. Take pictures of any damage or excessively dirty areas. If you replace carpet or other items, save a piece of the damaged carpet that needed replacing. When the former tenant sues you in small claims court claiming that the “apartment was cleaner than when he got it” there is no better evidence that the replaced carpet soiled with grease, pet stains and filth.

This article is presented in a general nature to address typical landlord tenant legal issues. Specific inquiries regarding a particular situation should be addressed to your attorney. The Duringer Law Group, PLC, one of the largest and most experienced landlord tenant law firms, has successfully handled over 235,000 landlord tenant matters throughout California, and has collected over $120,000,000.00 in debt since 1988. The firm may be reached at 714.279.1100, toll free at 800.829.6994 or 877.387.4643. Please visit for more information.

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