The tenant you put into your property will easily impact on the type of rental experience you have as a landlord in Los Angeles County. Tenant screening is important. If you don’t screen thoroughly, you could end up with a resident who doesn’t pay rent or who damages your property. You could find yourself with a bad tenant who refuses to follow the terms of the lease or engages in illegal or disruptive activity in your property. 

You’re looking for the right fit for your property, and the right fit is always someone who is responsible, consistent, and reliable. It’s a tenant who pays rent when it’s due, communicates when maintenance is needed, and meets all of the expectations that are set forth in your lease agreement. 

The best tenants stay in place for a long time and they treat your property as if it is their own. 

How do you find these tenants? You establish a great tenant screening process. Here’s how we do it.

Fair Housing First 

Before you begin screening any tenants, make sure you’re familiar with the federal fair housing laws. The Fair Housing Act mandates that we don’t discriminate against any tenants or applicants. As you may know, the law establishes seven protected classes. California fair housing laws go even further. When you’re screening tenants in Los Angeles, you have more protected classes to consider. Here’s the full list, of federal and state combined:

• Race
• Skin color
• Religion or creed
• National origin or ancestry
• Sex
• Physical or mental disability
• Familial status
• Sexual orientation
• Age
• Gender identification
• Gender expression
• Veteran or military status
• Citizenship 
• Primary language
• Marital status
• Source of income
• Genetic information

This is a list that’s constantly evolving. Make sure you have a plan in place for staying up to date on all the critical laws that are proposed and passed in California, especially when we’re talking about fair housing. Even the federal laws get changed and expanded frequently. If you’re not able to stay up to date, working with a Los Angeles property management company is important. You need to remain compliant. 

Violating fair housing laws is extremely costly, so you want to make sure you’re screening consistently via a well-documented process. If a tenant or a prospective tenant files a fair housing claim against you, there will be a lengthy investigation process and if you’re found to have violated the law, you could be fined up to $16,000 for a first offense. 

Before you Screen: The Role of Marketing in Choosing a Great Tenant 

The way you market your property is an important part of choosing the right tenant. 

Because marketing is how you attract potential tenants. 

You’ll need a great listing, with fantastic photos and accurate descriptions. Try to include a video if you can, so prospective tenants know what to expect when they arrive at your property. When they call or text for more information or to schedule a showing, you have a great opportunity to do some pre-screening. You don’t want to waste your time or theirs by showing the property to someone who ultimately is not qualified or a good fit for your property. Some of the things to ask might be:

• When will you be ready to move? If your property is move-in ready, you don’t want to entertain tenants who cannot move for more than another month. 
• Why are you moving? There might be a logical reason; more space or less space, a desired neighborhood, or a relocation for work.
• Do you have pets? If you’re a pet-friendly property, great. But, if you’re not willing to allow pets in your property, you don’t want to show it to someone with a litter of cats. 

Schedule the showing when the answers align with your needs.

Digitizing and Automating the Tenant Screening Process

One way to ensure you’re complying with all fair housing laws and treating every applicant fairly is to implement processes that make it impossible to discriminate. Our screening process is entirely digital. This is helpful and safe because it removes the human element and any biases that humans may have. 

When tenants want to rent one of our properties, we ask for a current government-issued form of identification and verifiable documents that prove income. We also ask for social security numbers so we can run our background and credit checks. 

When we have the completed application and all the supporting documentation, we screen the applications and notify tenants of the results. This process completely avoids any bias and keeps our landlords safe from fair housing claims. There’s actually very little human action with the data that’s gathered and presented. So, it’s difficult to discriminate. We’re working off results that we get from the screening that we complete. 

You’re really looking for someone who qualifies, and this process accomplishes that. 

Establish Qualifying Rental Criteria

Another great way to ensure you’re screening effectively and consistently is to set standards ahead of time and communicate those to any potential applicants. If your income requirements are at least three times the monthly rent, let them know. Tell them that good credit is also important. A tenant’s FICO score is a great predictor of ability to pay on time. Establish the standards that will have to be met before an application is approved. 

Here’s what you should be looking at as you’re gathering background checks and information:

• Checking Credit

Use a vetted application that’s specific to the state of California, and not a general one that you find on the internet. Find a template from your local Los Angeles property manager. We have great forms that have been reviewed and approved by attorneys, and there’s always a space for applicants to sign and give permission to run their credit. Never run credit unless you have signed, written permission. 

Run a full credit report, and not a discount version. It’s also very important that you run the credit yourself. Don’t let someone hand you a pre-printed version of their credit report. This is an opportunity for dishonest behavior.   

• Measuring Income Against Rental Amount

Ask for proof of income, which may be pay stubs or tax returns. Look for evidence that what the applicant tells you about their financial position is true. Check for cash reserves. Look at checking and savings accounts, and whether they have an investment account and other assets. Be sure and get a photo ID as well. You want to be sure the great application you just received was from the person who handed it to you. Most industry best practices say income should be at least three times the monthly rent. With rental values being so high, this is getting difficult for some applicants to meet. But, don’t lower your standards too much.

• Eviction History and Rental References 

Look for prior evictions, and always check the national eviction databases. Today’s tenants are more nomadic than they’ve ever been, so a local check of evictions won’t be enough. You also want to check rental references. This can be an easy corner to cut, because you’re going to assume that the references won’t tell you anything. But, you might find out you have bad phone numbers, or the people you’re calling don’t know who you’re talking about. This will help you complete the full picture.

When you do get in touch with someone, either by phone or by email, always make sure you’re actually talking to the landlord or the property owner or the property manager. Sometimes, tenants who have had a bad experience in a property will try to fool you by providing the contact information for a friend or family member. Do some light digging to ensure you’re talking to the right person. 

Some of the things you should ask a current or former landlord include: 

• Was rent paid on time every month? How quickly was the rent paid in the event that it was late? Did you ever have to serve a Three Day Notice?
• Was there any property damage during the lease term? Did the security deposit cover that damage, or did the damage exceed the deposit?
• Was proper notice given before they moved?
• Did the tenant have pets?
• Did the tenant receive a full security deposit refund?
• Would you rent to this tenant again?

This is perhaps the most important part of your screening process. A former landlord or property manager is uniquely positioned to tell you about what it’s like to rent to a particular person.

This is an overview of what we know about the application process and good tenant screening. Remember that legal compliance is absolutely critical, so no matter how you screen your tenants, be sure you’re following all applicable fair housing laws for California and Los Angeles County. 

Choosing a tenant and screening applicants can feel pretty complex, especially if you don’t have resources like online screening tools. We can help with that, and we invite you to leverage our experience and our technology. Contact us at El Camino Property Management, and protect yourself and your LA rental property. 

Please note this information is deemed reliable, but not guaranteed. Please consult appropriate professionals for specific situations.