Why Consistency Matters in Your tenant screening process
It’s no secret that prospective tenants' potential for Fair Housing claims keeps apartment managers up at night. Not to mention concerns over background checks, criminal history, eviction records, credit checks, and identity verification.
Indeed, according to the 2022 Spirited State of Apartment Application Screening Survey, running afoul of the Fair Housing Act was the second biggest challenge property managers faced.
The first was to identify altered documentation from the potential tenant, mostly fake paystubs and bank statements, which are easily obtained online today.
The survey asked 230 institutional managers about their approaches to the apartment application screening process today, given that 1 out of every 8 applications – 12.5% -- now submits fraudulently altered documents.
Taken together, the survey’s results about these two largest challenges underline the Catch-22 managers find themselves in when fighting apartment application fraud:
choosing between a potential Fair Housing claim or the risk of letting a fraudster in the door of your rental property.
Due to these concerns, managers often feel powerless to confront the issue or the rental applicant head-on.
Property Manager Use Cases
For example, a manager at a firm that counts approximately 50 communities in its portfolio says one of her biggest challenges is bridging the gap between suspecting an application has been fraudulently altered and providing evidence to that effect.
“If they can't provide a valid paystub, we require either a tax return or bank statements that show they have substantial income,” this manager told us. “But anything outside of that, you open yourself up for some kind of discrimination lawsuit these days.”
Others have told us that even when they suspect fraud in an application, their hands can be tied to proactively confront it. “We knew we were getting fraud,” another manager said. “But due to legal and compliance constraints, we were limited as to what we could do about it.”
The problem is compounded by the audacity of applicants who submit fraudulent documents in the first place. The potential renter who has studied up on Fair Housing laws often cites them quickly when a leasing associate calls their applications into question.
“It is incredibly important in our business to ensure that we're not in any way, shape, or form violating Fair Housing,” said Ellie Norton, area vice president for Alpharetta, Georgia-based Pegasus Residential, who’s responsible for approximately one-third of the firm’s 33,000 units. “But oftentimes, the fraudulent applicants are the ones that fight back the hardest.”
Tenant Screening Services
The anxiety managers face in this area illustrates the benefits of applying technology to the application screening process and using the consistency it provides to eliminate Fair Housing claims before they start.
Rachel Palmer, chief administrative officer at Tampa, Florida-based American Landmark Apartments, which counts 35,000 units in its portfolio and uses Spirited’s fraud detection technology as a screening solution to flag bad applications from quality tenants, eliminates the human element from the process.
“It takes the personal perception out of it. It just wipes it right out the door,” Palmer says. “It’s the system we use, and the results are the results. It doesn't matter who you are or where you came from. It’s simply whether the document in hand is good or not.”
One of the reasons why is because Spirited’s system puts the responsibility of submitting documentation on the applicant instead of the leasing team. When someone applies for an apartment, Spirited generates a link that’s emailed to the applicant to upload their documentation.
“It’s just, here's the link, upload your stuff, and we get the results back from a third party,” Palmer says. “When it shows false documents, and they’re confronted, most just stop right there.”
Having that cut-and-dried approach to vetting also helps save time in the process – which averages 10 hours per applicant nationally – by eliminating the need to go further when a tenant screening report flags a document.
“The only time you're really spending is whether that application is authentic or not. If it's not, then you move on to the next applicant,” Palmer says. “You cut it off at the knees.”
Doing so has helped Palmer stop fretting about Fair Housing claims connected to the application process because she knows every submission is put through the system similarly.
“The biggest thing with Fair Housing is consistency,” Palmer says. “We are consistently using Spirited, so we do not have to evict. Having Spirited eliminates the potential backlash of any lawsuit claim.”
Spirited Software
Designed to complement your existing leasing process, Spirited software provides quick fraud detection at a great price. With No long-term commitments, volume-based pricing options, FCRA-compliant, and a 24-hour turnaround time. To learn more, Contact Us Today or Request a Demo.
