How to Perform Tenant Screening and Respect Data Privacy

Investing in rental property also means investing in your tenants. Quality tenants keep your property clean, submit timely requests for any repairs, and leave less wear-and-tear on the house. They also pay on-time rent every month. But how do you know which applicants will become your best tenants? That is what the tenant screening process is for, and the laws associated.

Fair housing laws determine the questions you can ask. Local data privacy laws determine what you can do with an applicant’s personal information. Even their name and current address can be the seeds of identity theft, which is why data privacy has become such an important issue. So how does a responsible landlord handle tenant screening, wisely choosing the right tenants while protecting their data in the necessary ways?

As landlord pros, we have a few pointers.

The Fair Housing Act and Tenant Screening

The Fair Housing Act prohibits landlords from asking questions that may lead to discrimination. Unfortunately, this can include questions you might otherwise ask about family, background, and personal plans. You cannot ask questions or make decisions on housing regarding a tenant’s:

  • Race
  • Color
  • Religion
  • National origin
  • Sex
  • Disability
  • Familial status

You can ask about the number of household members, but not about spouses or children. You can ask about the number of vehicles, but not if one is a handicap van. It is even tricky to ask where your tenants are moving from, in case this reveals their national origin.

Data Privacy Laws for Landlords

Data privacy laws vary by state and can vary by city. California has the strictest personal data laws, but many other states include laws regarding how customer data (tenants, in your case) is handled and must be deleted on request. You will want to look up your state’s data privacy laws.

Best practices, however, suggest avoiding possessing any private data. If you can’t avoid, the second best option is to delete any private data you acquire as soon as its use is completed.

Do You Need Sensitive Information to Screen Tenants?

Yes. Part of tenant screening includes a credit, criminal, and eviction check. You will also want to verify each applicant’s employment and income. All of this requires very personal information, like an applicant’s social security number, current address, date of birth, and more. Knowing some of this information can even lead to a conflict of interest between fair housing and landlord decision-making.

Fortunately, you don’t need to personally have this kind of private information on your future tenants. Only your background check and credit check team do. LandlordStation allows landlords to run tenant screenings with just the tenant’s name and email address. The tenant can then – privately – enter sensitive information that goes straight to the credit bureau for the report – but is never seen or stored by the landlord. This is the best way to fulfill all your goals; getting a  detailed tenant screening report, respecting fair housing laws, and protecting tenant data privacy.

How Should Sensitive Tenant Data be Kept?

If you find yourself in possession of private tenant data, perhaps in the form of applications, keep this data under lock and key or delete it to protect the tenant’s data security.

If you store tenant data, keep papers in a locked filing cabinet. Keep digital files in encrypted storage or a data vault with a brand that you trust. In most states with data security laws, you are required to make a reasonable business-class effort to protect your customer/tenant’s data.

What to Do If You Have a Data Breach

What happens if a server or service where you are storing tenant data is breached by a hacking incident or exposed by accident? You will need to follow the data protection laws of your region but, most likely, your requirements include alerting tenants that their risk of identity theft has risen and possibly providing an identity protection monitoring subscription-like Norton LifeLock or Experian IdentityWorks.

LandlordStation Protects Tenants and Landlords from Data Privacy Concerns

Being a landlord is standing halfway between a host and a business owner. On one hand, you need to carefully screen tenants to find reliable and responsible people. On the other hand, you need to handle and hold as little sensitive information about your tenants as possible, especially during the critical decision-making process. LandlordStation offers the perfect solution that creates the shortest, most secure path between the tenant’s information and the credit check reports you need to make a strong decision.

To begin tenant screening with LandlordStation or to explore more of our handy landlord resources, contact us today.

Tenant Bankruptcy: How to Protect Your Rental

Tenant bankruptcy is one of the more frightening things that can happen to a landlord. You may find yourself unsure if your tenant can or will pay their rent any longer, and ambiguities in the law can make it difficult to know if you can (or should) evict your them.

We’re here to help you tackle those questions. This article will cover:

  • How to proactively protect your rental
  • Types of bankruptcies tenants are most likely to file
  • Recouping lost rent
  • Lease options after the bankruptcy is filed

Be aware that laws may change quickly, and that there may be state or local-level laws that affect how landlords can handle bankruptcies. Always check with the most recent version of the law, and you may want to hire a lawyer if you have questions.

Avoiding Problems Down the Line

Let’s start with the best-case scenario: avoiding problematic tenants.

Tenant Screening is your first line of defense to protect your rental property. The score on the credit report will give you an at-a-glance description of the client’s credit, but don’t stop there. Look at the entire credit report to give you a broader understanding of your potential tenant’s credit history.

Armed with that information, you’ll be able to answer applicable questions like:

  • Does the potential tenant have a history of late payments?
  • If so, how long has the tenant’s credit been suffering?
  • Are the late payments due to a one-time emergency or are they a trend?

Multiple bills that have gone to collections in the credit report can be a red flag.

A tenant screening will help you form an educated opinion about the tenant’s ability to pay rent and avoid bankruptcy. If you’re unsure about anything in the report, you can ask them for clarity.

No matter how diligent you are in your screening process, you cannot predict every scenario. Even the best tenant may lose a job or be overwhelmed by expensive emergencies. Some will get back on track quickly, while others find themselves too far behind to catch up. Let’s take a look at the kinds of bankruptcies you may encounter from your tenants.

Kinds of Tenant Bankruptcies

There are several kinds of bankruptcy, each with its own considerations.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is sometimes called a “straight bankruptcy.” It’s most commonly filed by individuals, but it can be filed by a business as well.

When an individual or a business successfully files for Chapter 7 bankruptcy, the court appoints a trustee. This individual handles the liquidation of the entity’s assets so that all creditors can be paid back as much as possible.

Chapter 11 Bankruptcy

A Chapter 11 Bankruptcy will not liquidate assets. The entity will retain complete and independent control of their finances, but they must pay back their debts in full (plus some extra). They are given some extra time to do this.

If they fail to pay their debts, the Chapter 11 bankruptcy may be converted to a Chapter 7 bankruptcy. If that happens, the court will assign a trustee and order the liquidation of assets and the payment of creditors.

Other Types of Bankruptcies

You may also see some other types of bankruptcies.

Chapter 12 deals with small-business fishermen and farmers and Chapter 13 is a rehabilitation program that focuses on regular wage-earners.

But these are more unusual, and most landlords will encounter Chapters 7 and 11.

Recouping Lost Rent

If you get that dreaded call that lets you know that your tenant has filed bankruptcy, your first thought will likely be how to recover any lost rent. To answer that question, first we need to understand how claims are filed.

Pre-Petition and Post-Petition Claims

The process of filing for bankruptcy is called “petition”.

Pre-petition claims are financial burdens that are put on a tenant before they file for bankruptcy. Post-petition claims are financial burdens placed afterward.

Rent is considered a claim, but when that rent was due will depend on what kind of claim.

There’s a chance your tenant will remain in your property after filing for bankruptcy. Any rent due during that time is a special type of post-petition claim called an administrative claim. Administrative claims are high-priority claims that tenants must prioritize paying off.

Alternatively, if money was due before the tenant filed for bankruptcy, that is a type of pre-petition claim called an unsecured claim. Unsecured claims are typically low priority for tenants to pay off, in comparison with other claims.

Now comes the big question:

Can I Still Collect Back Rent?

The court will institute what’s called an automatic stay when the tenant files bankruptcy. This means that most creditors cannot pursue any collection actions against the entity without the permission of the court. However, as the entity’s landlord, you are not subject to this restriction. You may still collect back rent as you normally would.

Remember that because back rent is an unsecured claim, it’s considered a low-priority payment and you may never get all of it back.

Terminating the Lease

Tenant Bankruptcy isn’t easy on anyone. If the tenant can’t pay you, they accumulate more debt and you lose income. Terminating the lease may be an option.

When the Landlord Terminates the Lease

There needs to be a breach of the lease to file a notice to quit or start the eviction process. Often this will come in the form of late or nonpayment.

There are some landlords or property managers that will add a clause to their lease stating that filing for bankruptcy breaches that lease. Keep in mind that many jurisdictions do not permit you to terminate a lease because a tenant has filed bankruptcy, and you may not put additional requirements on a tenant (such as increased rent or fees, or requiring payment in cash rather than a check) due to their bankruptcy.

Terminating the lease on your end may be tricky because of this, but there’s a chance that your tenant will want out as well.

When the Tenant Assumes (or Terminates) the Lease

Chapter 7 bankruptcy, in particular, lets the tenant decide whether they wish to assume or terminate the lease. This means that they can reconsider the financial obligation of the lease in light of their current situation.

If they decide that it’s too heavy of a burden in their current state, they may choose to terminate the lease within 60 days without a breach of contract. If they cannot decide during that period of time, they may file a request for an additional 60 days to decide, so long as they give an explanation of their circumstances and the court accepts this.

In response to this request, you are within your rights to explain to the court the stresses that this puts on you as the landlord or property manager. If the tenant chooses to terminate the lease, they agree to pay all outstanding rent within a reasonable time (which may vary by the locality, but is often within 60 days).

If the tenant requires additional time to pay, they’re going to have to make a motion for that with the court.

Re-Leasing

If your tenant gives notice of termination, you cannot stop them from terminating the lease. In this scenario, you should start showing the property immediately. You may have already lost money during this period, and the last thing you want is to have your property sitting empty.

Because of how the re-leasing process works and how long it can take to get a new tenant into the property, most landlords try to block any motions from the tenant to extend the 60-day period of assumption or termination of the lease.

Three months is a very long period of time to not know if you’re going to need to start screening new tenants.

Conclusion

When your tenant files for bankruptcy, it can initiate a period of uncertainty for you, and possibly even create conflict between you and your tenant.

There’s no doubt that it’s going to be difficult, but if you educate yourself about the bankruptcy process and what it means for you, you’ll be able to save yourself and your business potential financial losses—and a lot of headaches. Again, you’ll want to familiarize yourself with local and federal laws. Reach out to your legal counsel if you need clarity at any step along the way.

What Landlords Should Know About Subleasing

It is your right and responsibility as the landlord to know about everything that happens to your rental property, especially when a new tenant moves into the building. Ideally, you get to decide who rents your property. However, your tenants can assume this authority through subleasing. This can be good or bad for you and your rental business, depending on how you handle it. 

How Subleasing Works 

Subleasing essentially transfers a lease from the original tenant to another tenant. Clients usually sublease when they have to leave temporarily and are looking to offset the rent until they come back. Many tenants also sublease when moving away permanently before their lease expires with the same goal of saving money. 

Assuming that you don’t have a say in the sublease, the tenant will handle everything with the subtenant and make arrangements for important things such as maintenance and paying rent. However, it is advisable to control the subleasing process and hold both parties responsible for fulfilling the contract’s terms and conditions. 

The Pros & Cons of Subleasing 

Subleasing has good and bad implications for all parties involved, especially you, considering your stake in the property. Here is an overview of the advantages and disadvantages to you. 

Pros 

Here is an overview of the pros of subleasing, assuming that you are in control of the process: 

  • Qualified Tenants 

The landlord’s biggest concern about subleasing is that the tenant will give the property to a problematic subtenant. However, you can ensure that the subtenant meets your standards by taking part in the vetting process. 

Ideally, the subtenant should undergo the same screening process as other tenants. It is also advisable to delegate the tenant screening process to a screening agency to ensure that you don’t miss any red flags about the subtenant. 

  • Steady Rental Income 

In most cases, the tenant would have to cancel the lease agreement if they had to move, and subleasing wasn’t an option. This would leave the unit empty, resulting in lost income until another tenant comes along. You would also incur expensive tenant turnover costs when looking for another tenant. 

However, agreeing to sublease will ensure continuity in the rental income from that unit. It will also save you hundreds or thousands of dollars in tenant turnover costs. 

  • Positive Long-Term Relationships 

Some tenants sublease with the intention of coming back. Good tenants are difficult to find, and subleasing to a qualified subtenant for several months would be a small price to pay (if it is a price at all) to retain a good tenant

Cons 

As explained earlier, every landlord’s biggest concern about subleasing is that the subtenant will be problematic. Unfortunately, the tenant handling the subleasing process may not know how to screen subtenants according to your standards. A problematic tenant poses other threats, including property damage and lease violations. This is why it is important to either restrict subleasing in totality or get involved in the process. 

What to Do about an Unauthorized Sublease 

It is always advisable to cover everything in the rental contract, including whether or not tenants can sublease their units. You also have the right to cancel a tenant’s lease if they sublease their unit without your authorization. Ultimately, it is advisable to consult your lawyer and act within the law when handling such a case to avoid violating the tenants’ rights. 

Conclusion 

You never have to worry about subleasing if the subtenant meets your standards and passes the tenant screening test. LandlordStation can help you conduct thorough checks on your tenants and subtenants. Get in touch today to learn more about our tenant screening solutions. 

6 Tips on How to Handle Tenant Conflict

No matter how carefully you screen your tenants, landlords will inevitably experience tenant conflict. From parking issues to loud music and common area conflicts, tenants can get into a confrontation for many reasons. Conflicts can have an negative effect on your property and even cause other tenants to move out. 

Learning how to handle conflict on your property can go a long way. Here are six ways to deal with conflict between tenants:       

Set rules that will prevent tenant conflict from arising

Handling tenant conflict on your property should begin with establishing a residential lease agreement that outlines your expectations from tenants. Ideally, it should highlight rules on what constitutes undesirable behaviors and how to avoid them. This can include rules regarding how to use shared spaces, noise, pets, and controversial issues like smoking. 

When a new tenant moves into the property, give them a copy of the agreement. Emphasize the rules and inform them that all complaints should be solved through relevant authorities and not between tenants. 

Have a policy on how to handle every complaint

Establishing rules on how to handle specific cases so you can remain consistent. That will protect you from approaching similar cases differently. Simple violations like noise can be dealt with less severely, while more severe violations can attract more severe punishment. 

Your policy should also include how tenants should file complaints. This could be through filling out forms online or physically. Your tenants should be aware of how to go about the process for smooth handling of a dispute. 

Keep a written record 

Keeping a written record of every conflict is important for solving any disputes that might develop in the future. In any case, if a tenant repeats the same mistake over and over again, you will have grounds to evict them without opposition or involving the courts. Your written document should have the following fields: 

  • Date of the complaint
  • Nature of the dispute
  • Tenant’s name and unit number
  • Date the complaint was resolved
  • Resolution

A written record essentially allows you to follow up on the agreement made and if there is a need to take further measures. 

Know your rights under the lease

Besides policies on how to handle tenant conflict, the lease also includes your rights and responsibilities as a landlord, and being up to speed with them allows you to protect yourself in case of disputes. Specifically, these rights help you to correct tenant behavior in accordance with the property agreement and local and state laws. 

It is advisable to consult a legal professional knowledgeable in tenant issues. This helps to avoid legal complications that may arise. 

Update both complainee and complainant  

Be sure to let the complainee know that a case was lodged against him, but don’t disclose the tenant who raised the issue. This is to avoid tension and resentment that could further escalate the problem. Moreover, give a detailed account of the complaint as well as actions to be taken if the tenant is found guilty. 

Make sure you conduct your own research to get the facts together. Don’t forget to issue every party a written document about the case and how it will be resolved. 

Consider mediation 

Mediation is a viable way to solve tenant disputes to ensure the problem at hand does not ruin the relationship between them. In some cases, you can play the role of a mediator, while in others, you might want to involve a professional mediator, especially if the case is rather technical. A mediator will help to come up with an amicable solution for the benefit of the landlord as well as the tenants in question. 

Summary 

While disputes are sometimes inevitable, there are several ways you can prevent them to ensure all tenants are living in peace and harmony. Having rules and policies in place is a sure way to avoid conflicts among tenants to keep your property safe for all. 

How to Make Sure Your Favorite Tenants Stay

Having to replace a good tenant can be very expensive. The final costs of replacing a tenant can easily exceed $4,000.

Accordingly, it’s very important that you try to hold onto your favorite tenants for as long as possible. Offering competitive rental rates and keeping your property in good condition are obvious requirements in this effort, but consider these five suggestions for extra steps you can take to keep good tenants signed on.

Offer a Longer Lease Renewal

If you normally offer one year leases, try offering a two year lease (or even longer) the next time your favorite tenant is up for renewal.

While this is technically a market gamble for both of you, from your tenant’s perspective it will seem as if you’re offering them the opportunity to avoid rent increases for the next couple of years. This will encourage their loyalty to you and the property.

The income stability of a tenant with a good payment history can often outweigh the potential downsides of missing the opportunity to increase the rent for a few years.

Give a Lease Renewal Gift

The small things matter, and that can be especially true when you’re trying to keep a good tenant.

The next time a tenant renews their lease, offer them a renewal gift. It doesn’t need to be much, and even a $50 gift card to a fantastic local restaurant can be enough to make a tenant appreciate you. Pair this with a small gift for the holidays and you’ll generate even more goodwill.

Give Them Opportunities for Feedback

It’s important to make sure your favorite tenants feel that their concerns are being noted, and this requires more than simply waiting for them to call with a problem.

Be proactive about communicating, and actively reach out to them from time to time. If you’re renting a multi-unit property, make sure to have a comment box in a common area, along with a placard that reminds tenants of your contact information. It’s also a good idea to send them a letter two or three times a year letting them know that you’re available to discuss any concerns that they may have.

Offer an Apartment Update

Part of the appeal in finding a new apartment can be that vacant apartments have often been newly renovated, or at the very least given a new paint job and touch up.

To recapture this feeling for your favorite tenants, particularly if they’ve been renting for several years, offer them an apartment update for their next lease renewal. This can be a simple repainting, but it’s also a good opportunity to accomplish two objectives from things you were planning to do anyway. For example, instead of simply stating that you’re going to replace their stove (if you were already planning on doing so), tell them you’re doing it because they’re a good tenant and you appreciate them.

Offer a Cleaning Service

In the same vein, offer them a visit from a cleaning service when they renew their lease. A good, deep cleaning can make a difference that is just as dramatic as an actual renovation. Tenants will feel like they’ve genuinely stepped into a brand new apartment, but one with all the comforts of their familiar home.

3 Dangers of Unscreened Tenants

Even if you screen every tenant that you accept into your rental property, there are other ways that unscreened tenants may end up living there. Your tenant might let a down-on-their-luck friend couch-surf while they get back on their feet. They may be caught up in a whirlwind romance that has their significant other staying at the property more often than not. Whatever the situation is, it can complicate things.

A guest staying beyond the reasonable time span you define in the lease agreement is essentially an unscreened tenant on your property.

You might not think it’s the biggest deal in the world, but there are some very real dangers unscreened tenants bring to your property.

1. Unknown background


You don’t know anything about the person who is living in your property.

When you bring a tenant onto the lease agreement, you probably check their credit and criminal background to ensure they can afford the property and they won’t use it for illegal activities. You don’t have that reassurance with a friend or family member that the tenant brings into your property. The tenant may assume that their friend or family member is trustworthy, but some people are very good at hiding bad behavior to get what they want.

You don’t want to kick out a good tenant because they won’t get rid of an unscreened visitor who stays past the lease agreement terms. You also don’t want to risk your property becoming involved in illegal activity. If the original tenant is interested in the guest staying on a long term basis, talk to them about screening the new addition to the apartment. They need to go through the same screening process the original tenant does to ensure everything is on the up and up. You don’t necessarily need to add them to the lease, depending on the situation, but you do want to do your due diligence to protect your property.

2. No security investment in the property

The unscreened tenant doesn’t have anything tying them to the property except the tenant that is on the lease. They don’t have a monetary investment, so they don’t have a direct incentive to keep up on maintenance and cleanliness. If they are staying for a significant amount of time, they add to the wear and tear of the property. They also run the risk of damaging the property, whether through negligence or malice.

3. No consequence for disruptive behavior

Your unscreened tenant also doesn’t deal with any consequences for acting disruptively. They aren’t the ones who stand to lose their apartment when they get into arguments on the front porch, hold loud parties, or ignore noise complaints coming from the next door neighbors. That’s all on the on lease tenant, who may not realize just how badly the unscreened tenant is behaving.

Avoiding Unscreened Tenants

You have no way to stop unscreened tenants from getting onto your property. After all, you can’t prevent your tenant from having guests.

What you can do, however, is restrict exactly how long the tenant’s guests can stay before they need to leave the property.

If you aren’t often at the apartment, you won’t necessarily know there’s an unscreened tenant on the property unless neighbors complain. However, it’s important to get this policy in writing so that you can enforce it. If the original tenant refuses to adhere to the lease terms, you have grounds to remove them from your property before a serious situation occurs.

How to Legally Tackle Skipping Tenants

Dealing with tenants who skip out on their lease can be a very frustrating endeavor; however, there are some steps that a landlord can take to recover the money that is owed to them. As a landlord, you have a right to collect money that is owed to you when a tenant leaves the rented property prematurely. A lease agreement with fixed terms protects you from tenants who skip out on their remaining rent. They owe you the rent on that lease for the duration of the lease period or until you are able to rent out the property–whichever comes first. It does not matter whether the tenant gave you notice or they vacated the property in secret; the process of collection is the same.

Create a Documentation File


It is paramount that you keep written documentation of communication between you and the tenant. If the tenant provided you with written notice that they were breaking their lease agreement, include that letter in their file. If the tenant did not provide notice but left in secret, simply type up a short note that explains when you discovered that the property had been vacated.
To achieve the best results, stay organized and detailed in the records that you keep throughout the process. Be sure to record dates, times, and phone numbers associated with any conversations that you have with the tenants. You will need all of this information when you attend the court hearing.

Send a Written Notice to the Skipping Tenant


Send a written notice to the tenant to remind them that they are responsible for paying the rent until the end of the lease or until you find another tenant. Be sure that the notice you send clarifies that they must pay the rent on time in accordance with the lease agreement. The notice should also include clarification that you will pursue legal action if the rent is not paid as required under the lease.

Inspect the Property


When a tenant provides notice that they are leaving before the end of the lease, inspect the condition of the property as soon as possible. Complete an inspection checklist and note any damage that has been caused by the tenant. You will also need to take pictures of damaged items, but normal wear and tear should be excluded from your list.

Prepare the Property


Make the necessary preparations to lease the property again. Once it’s ready for rental, begin advertising and interviewing potential tenants. You will also need to keep copies of any ads you post and the receipts and costs associated with those ads. You should place this information in the file with your other documentation.

Notify the Original Tenant of the Total Amount Owed


Once you have rented the place or the lease has expired, you will need to send the tenant a notice of the total amount owed. Make sure that you have identified a deadline by which the money must be paid. Let them know if the money is not paid by that time, you will be forced to file a civil suit for the purpose of collecting the money that is owed to you.

If you don’t receive the money by the deadline, you will need to visit the county clerk’s office to file the suit and have a hearing date set. On the date of the hearing, take all of your documentation with you. Once you present it to a judge or justice of the peace, it should be a quick judgment. Not only will you recoup the money for the lost rent, but the judge will most likely make the tenant cover your court costs as well.

Best Ways to Get Tenants to Pay Rent Online

Landlords are constantly looking for more efficient ways to handle the collection of rent from tenants. While collecting rent in the traditional way via personal check is a comfortable way to handle monthly rent payments, a lot of complications can arise. Checks get lost in the mail or misplaced in the office, or tenants get forgetful and neglect to write that check on the first of the month, forcing you to expend time and energy to track them down.

 

Online bill payment can take care of a lot of the above problems and benefit both landlords and tenants. But despite how so many tenants pay the majority of their bills online nowadays — credit cards, utilities and auto payments — quite a few are hesitant about using the Internet to pay their largest bill. So how does a landlord go about getting their tenants to pay their rent online?

Benefits of online rental payment

As mentioned above, receiving of rent online cuts out the middleman from the tenant-to-landlord-to-bank transaction process. Instead of physically receiving a check, filing it for later deposit, going to the tenant’s profile and marking that they’ve paid, filling out bank account numbers and signing checks for deposit, filling out deposit slips and going to the bank to physically deposit the money; you can accept a payment with one click and transfer that money into a bank account with another. Landlords also can have tenants set up automatic payments linking their bank accounts to the tenants’. So instead of waiting for them to drop off or mail the rent, it can be automatically withdrawn from the tenant’s bank account into the landlord’s.

 

As for tenants, online banking saves time and money. Instead of filling out a check and dropping it off or mailing it, just fill out a few things online and authorize payment — a process that takes seconds, and saves money on stamps. If a landlord accepts credit card payments, tenants can earn major rewards from credit cards by paying rent online.

 

Tips to encourage online rental payment

There are a few things you can do as a landlord to prompt tenants to use an online bill-pay service for rent.

 

First, you can make sure that the transaction is free. This is the most important thing. It doesn’t matter how little an online fee might be; people will not pay it. The key to promoting online bill pay is to highlight its hassle-free nature. Fees are seen as hassle no matter how low they are, so leave them out entirely.

 

Allow the use of credit cards. You might be concerned that a tenant paying by credit card is living beyond their means, but as mentioned above, many people pay bills with credit cards to get rewards points. Trust that your income and credit evaluation was sound and let tenants pay rent online with credit — they’ll do it if they think they can get a free vacation from it.

 

Offer rewards for online bill pay. Whether it’s money off a month’s rent or a gift card, rewards and prizes will always get tenants eager to participate.  Tenants will develop online payment habits this way, and once they get into the habit, they won’t go back.

 

Finally, sell the benefits of bill pay. Send out fliers or emails to tenants describing why online bill pay is good for them and give them a step-by-step checklist that covers how to do it. Do the research for them and answer questions up front. The less confusion about the process, the more likely they’ll start it up.

Conclusion

Paying rent online is a mutually beneficial process for both tenant and landlord once both parties get past the initial awkward unfamiliarity stage. If you take the above steps now to get tenants comfortable with online transactions, an efficient and rewarding rent-payment process is sure to follow.

Ensuring Tenant Privacy

As part of the rental application, a landlord needs to collect confidential data about a potential tenant in order to determine if they are suitable for the suite or home they wish to rent.

Sensitive data may include employment information, bank account and credit history, social security numbers, and previous addresses, all of which are of interest to an identity thief.

A landlord may also know personal information about the tenant, including marital status, children, and other sensitive data that legally shouldn’t be on paper.

In the USA, both personal and confidential tenant data is protected, and a landlord is prohibited from releasing any financial or personal data to a third party, without written consent of the tenant.

Confidentiality of tenant information is a landlord’s responsibility, and it’s their job to ensure that their tenant’s personal and financial information is protected from nosy neighbors, debt collectors, or fraudsters who may be fishing for information.

When tracking tenant information you need to ensure that their confidential data is kept secure.

This is applicable to either paper records and computer data.

Keep tenant records under lock and key
Rental applications can be the main source of confidential tenant data.

Once an application has been processed and accepted, there’s no reason to leave it out in the open.

Keep tenant records in a filing cabinet that locks securely or in a closet with a deadbolt when not in use.

File essential paperwork immediately. If you’re leaving the office, lock your door behind you.

Keep sensitive information in a folder
It takes only a moment for someone to read information off a document.

When processing rental applications, keep in mind the foot traffic through the office.

Flip papers over or tuck them into a file folder so that passersby can’t read tenant information in passing.

Protect computerized files
Tenant files kept on a computer should be protected with the same care that is taken with paper files.

Protect access to your computer with a strong eight character password.

Take this security one step further to ensure that all confidential files storing tenant information are also password protected.

Protect information in transit
Dissuade prying eyes from flipping open unattended files.

If tenant records are stored securely off-site, transport them in a locking briefcase.

This provides one extra level of protection, in case you leave it unattended for any length of time.

Shred non-essential files
Carelessly tossing rejected rental applications into the bin is a violation of state laws.

Run any non-essential papers through the shredder to ensure that any information containing personal identities or credit card or banking information is destroyed.

Don’t reveal information about tenants
Whether someone calls you for information about a tenant or you’re speaking to their neighbor, it’s important to avoid talking about that person without written consent from the tenant.

Discussing other tenants without their consent is unprofessional behavior that can land you in trouble, particularly if you inadvertently disclose information.

It’s best to inform the other party of your policy and change the topic.

Possible exceptions may include written consent from the tenant which may involve providing confirmation that they lived at your location for a certain length of time, or when requested by a law enforcement official.

Landlords may learn more information about a tenant than they need or want to know, but they have the responsibility to ensure that tenant information stays between landlord and tenant, and is not shared via a third party.

As a landlord, it’s part of your job to protect personal and confidential data about your tenants from third party requests.

If in doubt, obtain written permission from your tenant before sharing their confidential data.