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Should You Screen Your Self Storage Tenants?

Jon Fesmire | February 13, 2017 @ 9:15 AM

Self storage facilities are prone to experiencing some pretty strange things. This can include tenants living in their storage units, storing prohibited items and of course, theft. For these reasons, you might consider screening each prospective tenant before allowing them to rent a unit.

If you’ve never screened tenants before, there are a few great ways to simplify the process.

The Fair Credit Reporting Act

Keep in mind that screenings must be done in compliance with the Fair Credit Reporting Act. The point of this act is to protect consumers from inaccurate information in their credit reports. Of course, you’ll want to receive only accurate information, anyway.

Work With a Tenant Screening Company

While you may feel hesitant to pay a tenant screening company to do the work for you, keep a few things in mind. Background information search sites often charge heavy fees, and it can still be difficult to find specific people through them. Such searches can use up precious time when an employee could be helping customers, checking the grounds, or doing other important tasks. A good tenant screening company will run a rental background check, a criminal search, and a tenant eviction search. The results will give you an idea if the tenant pays rent on time and if he or she has committed any crimes, especially theft. It is then up to you if you think the tenant is trustworthy. Basically, you want to look for red flags and act accordingly. That means having a specific set of rules for what will disqualify a tenant. Tenant screening companies include TVS, Tenant Screening USA, and others.

Legal Considerations

Tenant screening has to be done fairly. That means you either screen no prospective tenants, or you screen every one of them. Otherwise, you risk a discrimination lawsuit. When it comes to commercial tenants, have a policy to screen all employees who have access to the business’s storage unit. Have the commercial tenant let you know in advance who they want to have access. Make sure that there’s enough time to screen that person. Know what crimes will lead to exclusion. They should include things like burglary and theft as well as violent or armed crimes. However, failure to pay child support isn’t going to put your facility or other tenants at risk.

You will be required to get a signed release form to do a background check on a new renter. It needs to include everything you plan to check, including background checks, character checks, and so on. When you do reject a tenant, provide him or her with an adverse action notice. This will include why you rejected their application, and also where you obtained the information, plus a section on how they can dispute it. Your tenant screening service should be able to make the appropriate forms available to you.

Protect the records that you receive. Whether you have them stored digitally, physically, or both, they are private. You will have received them legally, but the information is there on a need to know basis. If you share the information with others, or if it leaks, you could be facing a lawsuit.

Occasionally, these reports can be imperfect. This scenario is rare but is important to keep in mind. For instance, credit reports often contain bills owed by ex-spouses. A criminal report might have information from youth records that should have been sealed. This is why prospective self storage tenants have a right to contact the reporting agencies and challenge anything they disagree with if they are denied. Let the client know why they have been rejected so that, if the information is false, he or she can fix it and reapply. By implementing background checks and fair, specific rules about what disqualifies an applicant, you can better protect your facility, and your tenants, from theft and other crimes while on your site.
Jon Fesmire

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