For landlords and property managers, choosing the right tenant for your residential unit can be stressful. Time is of the essence, and when it comes to screening advice, misinformation abounds. This article clarifies six (6) of the common rules of thumb that landlords face in screening prospective tenants.
Note: The below statements are tailored to city of Chicago law, as it is the most stringent. However, general best practices can be applied to rental properties across Illinois.
- Gut Instinct. Good landlords know a good tenant when they see one. Applications are a waste of time and money when you have enough experience.
- Rumor. Fact: The Benjamin Franklin saying, “an ounce of prevention is worth a pound of cure” should be every landlord’s guiding principle. Screening prospective tenants thoroughly and consistently is a proven strategy to ensure timely rent payments, neighborly behavior, and minimal property damage. The landlord-tenant relationship is a business relationship, and research should be done accordingly.
- Screening all adults in household. When completing an application, only the head of household’s information is necessary.
- Rumor. Fact: It is best practice to screen all the adults who will be residing in the unit, regardless of who is considered the “head of household”, especially when conducting criminal background checks. Credit and income checks can be more challenging, as some adult household members may be considered “dependents” or not expected to financially contribute. These relationships should be established early and any screening process should take such arrangements into account when determining suitability.
- Application fees. Landlords can charge an application fee per adult, to cover the administrative cost of a comprehensive criminal background check and credit check for each applicant.
- Fact: Landlords are within their rights to charge an administrative “application fee” to prospective tenants. This fee should be reasonable to cover the cost of the type of screening conducted, and the landlord’s time in processing the application. Exorbitant application fees may deter prospective tenants from considering a unit.
- Applicant priority. Landlords who receive multiple rental applications in a day can choose the best qualified applicant to move forward, regardless of the order in which they were received.
- Rumor. Fact: Landlords are required to consider prospective tenants in the order the application was received. Prospective tenants can only be denied if they do not meet the screening criteria, not because someone more qualified applied shortly thereafter.
- Subsidized Renters. Landlords looking to lease to a family with a housing choice voucher (section 8) don’t need to complete the rental application process, as the housing authority screens the family in advance.
- Rumor. Fact: Housing authorities screen families for program eligibility, not tenancy suitability. For example, the Chicago Housing Authority’s criminal background check “look back” period is 3 years (except for arson, methamphetamine manufacture or lifetime sex offender convictions), and credit score is not a factor for program eligibility. As such, landlords should conduct the same screening process for all prospective tenants, regardless of their source of income.
- Landlords can screen all prospective subletters using the same criteria with which they screened prospective tenants.
- Fact: The Chicago Residential Landlord Tenant Ordinance (CRLTO) stipulates that a “landlord shall accept a reasonable sublease proposed by the tenant without an assessment of additional fees or charges”. “Reasonable” can be interpreted as the same criteria under which the original tenant was screened. The issue of “additional fees or charges” is specific to the current tenant, not the prospective subletter – therefore the landlord’s standard application fee is therefore acceptable.
When in doubt, landlords and property managers should consult local ordinances and seek legal counsel to avoid costly missteps. In Chicago, the Chicago Residential Landlord and Tenant Ordinance and the Chicago Fair Housing Ordinance are quite specific as to acceptable application and screening practices.
Have questions or concerns about acceptable tenant screening practices? Our experienced attorneys are here to help. For over 35 years, our law firm has been a trusted advisor to landlords and property managers in the city of Chicago and the surrounding suburbs. Call KSN toll-free at 855-537-0500 or visit www.ksnlaw.com to get started today.
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