Written by Michael Bannett | Published by REALTOR Magazine on September 18, 2019
Property managers must abide by strict rules when using common reports to determine the eligibility of prospective renters. Make sure you know what you can and can’t do with the information.
When a rental application is under consideration, most property managers and landlords require a prospective tenant’s credit report, credit score, and, usually, a background check and eviction screening. Thanks to technology that makes receiving these reports fast and simple, rental screening is easier than at any time in the past.
As a property manager with the opportunity to participate in rental transactions, chances are you’re familiar with the following passage from the Fair Credit Reporting Act:
Any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined under title 18, United States Code, imprisoned for not more than 2 years, or both.
The FCRA protects all consumers—including you and me—related to our personal data, such as credit, payment patterns, debt, and court records. This information is collected, stored, and, when inquired about by a creditor, provided by one of several consumer reporting agencies like TransUnion, Equifax, and Experian. Thankfully, the FCRA requires agencies to maintain accurate and complete records. It requires that our private data remain private by imposing specific guidelines for providing it. CRAs may distribute a person’s data if there is “permissible purpose” and the consumer has consented to its release.
For property managers, this is understandably where things become confusing, making the prospect of conducting a rental transaction daunting. Much of the concern stems from questions that swirl around the proper handling of the tenant’s reports. Let’s discuss these important questions and make sense of the issues at hand.
- What defines permissible purpose?
- Who orders reports?
- Who should receive reports?
- Can reports be shared between real estate professionals?
- Can I share reports with the landlord?
Continue Reading
