How to perform the best background check for landlords in 2023

Keep your rentals safe with reliable tenants; here’s your guide to conducting an effective background check in 2023

Are you a landlord? Take a closer look at your tenants to ensure a thriving rental business. In a perfect world, your tenants are trustworthy, but in reality, they could disappoint. They could expose you and your property to serious risks.  

Conducting a thorough background check on prospective tenants is essential to mitigate potential risks and make an informed decision. The good news is that in 2023, with technological advancements and a wealth of resources available, landlords have access to various tools and platforms to perform a comprehensive background check. 

The Seeff Property Group shares how landlords can achieve the best background checks for prospective tenants, with valuable insights and recommended resources to make the process efficient and effective.

What Is A Background Check?

A background check provides an overview of an individual's criminal history, eviction records, educational background, employment history, and more. These checks are important because, as a landlord, you must lease your rental properties to responsible individuals who will uphold their financial obligations, contribute positively to the rental community, and maintain your property. 

While no screening method can guarantee perfect results, a background check offers valuable insights into prospective tenants' past. These checks reveal any undisclosed information (such as previous evictions), giving you a clearer understanding of the individual before finalising the lease agreement.

Why Are Background Checks Important? 

When you perform a background check, you are able to assess a tenant's suitability, verify the information provided, and identify potential red flags or risks. This lets you make an informed decision protecting your properties, other tenants, and business interests.

Best Resources for Landlords Conducting A Background Check

To perform the best background check, landlords can leverage reputable resources and platforms specifically designed for tenant screening. Below are several helpful resources: 

However, bear in mind that these rights must still be exercised in accordance with the law. You must follow the correct legal process before you can evict a tenant.

• South African Police Service (SAPS): The SAPS provides access to criminal record checks through its Criminal Record Centre. This allows landlords to verify an individual's criminal history within South Africa.
  
  
• Private Background Screening Companies: Various private companies in South Africa specialise in conducting comprehensive background checks. These companies can access multiple databases and provide detailed reports on criminal records, credit history, employment verification, etc.
  
  Examples of such companies include LexisNexis, Managed Integrity Evaluation (MIE), and Kroll.
  
  
• Credit Bureaus: Credit bureaus such as TransUnion, Experian, and XDS offer credit history checks, which can help landlords assess an individual's financial responsibility and payment history.
  
  
• Reference Checks: Contacting previous landlords and verifying rental history can give you a glimpse into an applicant's reliability and adherence to lease agreements. 

Key Components Of A Background Check

A comprehensive background check typically includes the following elements:

• Credit History: Reviewing a tenant's credit report helps assess their financial responsibility and payment history. In the world of landlord-tenant relationships, relying solely on a well-documented, high-earning income to predict timely rent payments can be a risky assumption. 
  
  As a responsible landlord, it's essential to consider multiple factors when evaluating prospective tenants' financial capabilities. While a steady income is important, it's just one piece of the puzzle. 
  
  
• Criminal Background Check: Checking for criminal records can provide insights into a tenant's past behaviour and potential risks. Numerous services offer the capability to conduct thorough criminal background checks on prospective tenants, allowing you to access criminal history reports. 
  
  Depending on the chosen screening service and specific reports selected, it may also be possible to identify whether a potential tenant is a registered sex offender. 
  
  
• Employment and Income Verification: Verifying employment details and income ensures tenants have the financial means to meet their rental obligations. After all, you never want to find yourself with a tenant who can’t pay you. 
  
  A consistent employment history is highly advantageous when considering a new tenant. It indicates reliable income, which increases the likelihood of timely rent payments, ensuring a consistent rental income for landlords.
  
  
• Rental History: Checking previous rental references helps gauge a tenant's reliability.
  
  
• Identity Verification: Confirming a tenant's identity through documents like ID cards or passports ensures they are who they claim to be.

How To Comply with Legal Requirements When Conducting A Background Check 

Landlords must comply with local laws and regulations when conducting a background check. This way, you can ensure a fair and unbiased tenant screening process while upholding the principles of equal opportunity and non-discrimination.

• Familiarise yourself with applicable laws to ensure you handle tenant information and background checks lawfully and ethically.
  
  
• In order to ensure compliance with the Rental Housing Act and avoid any form of discrimination, it is essential to have a comprehensive understanding of the relevant laws. 
  
  
• Be aware that conducting a background check solely based on an individual's race or gender is strictly prohibited. Similarly, it is not permissible to use a background check to reject applicants based on their sexual orientation or age. 

While it is important to gather relevant information, landlords should also respect tenants’ right to privacy. Focus on collecting only the necessary information required to assess a tenant’s suitability, and handle sensitive data securely and responsibly.

Background Check: Striking The Right Balance

A background check is not a clear path to securing the perfect tenant. It will likely yield helpful information that you can use to protect your property, but you must still use discretion. Seeff also recommends that you contact an expert Property Practitioner for guidance to give yourself every chance of success as a landlord in 2023.

Are you a landlord looking for professional assistance in managing your rental properties? Seeff is here to help. Seeff offers tried and tested solutions, from tenant screening and lease agreements to marketing your property. 

Let Seeff help you thrive as a landlord.