Landlord Background Checks

What is a landlord background check

Has a landlord recently investigated your credit or personal details? Did the landlord comply with the requirements under federal law?

It’s common for landlords to use background check reports in order to screen potential tenants. Such reports can typically provide information on a person’s credit history, rental history, criminal history, and driving history. However, the Fair Credit Reporting Act (FCRA) regulates a landlord’s use of consumer reports.

Consumer reports that are governed by the FCRA can be obtained by a landlord through several sources and can contain a wide variety of information. For instance, a landlord may obtain a credit report from a credit bureau (such as Trans Union, Experian, and Equifax). Alternatively, a landlord may hire a tenant screening service to compile a report describing the potential tenant’s rental history or criminal history. Regardless the exact nature of the consumer report, the FCRA imposes numerous restrictions over landlords that intend to use a consumer report that is covered by the FCRA. Landlords must deliver a certification to the company compiling the consumer report that it will be using the consumer report, and they may not use the consumer report for any other purpose.

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Adverse Actions

A large portion of the FCRA’s restrictions over a landlord’s use of a consumer report when taking an “adverse action” toward a potential tenant. An adverse action can be any action that is against the interest of the potential tenant, including the following:

Refusing to rent the property to the potential tenant;
Requiring the potential tenant to include co-signer on the lease;
Requiring an extra deposit or a larger deposit than the landlord would request from another potential tenant; and
Raising the rent to a higher amount than the rent would be for another potential tenant.

If a landlord takes an adverse action against a potential tenant based on a consumer report, the FCRA requires the landlord to inform the potential tenant that the adverse action was taken on the basis of a consumer report (commonly referred to as an “adverse action notice”) in order to provide the potential tenant a chance to review the consumer report and dispute any incorrect information. The adverse action notice must include:

The name and contact information of the company that provided the consumer report;
A statement certifying that the company that provided the consumer report did not make the decision to take the adverse action and can’t provide specific reasons for taking the adverse action;
A notice that the potential tenant has the right to dispute the accuracy or completeness of the consumer report, as well as the right to get an additional consumer report for free from the company providing the consumer report within 60 days.

A landlord’s violation of the FCRA can cause the landlord to incur monetary penalties ranging from $100 to $1,000 plus attorneys’ fees for “willful” violations, and actual damages plus attorneys’ fees for “negligent” violations.

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Who else is responsible under the FCRA?

Landlords are not the only parties whose actions are governed by the FCRA with respect to background checks.
If a landlord uses a company to compile a consumer report, that company is considered a Credit Reporting Agency (known as a “CRA”) under the FCRA. The FCRA requires that CRAs maintain reasonable procedures to assure the highest level of accuracy of the credit information that they report to employers. Additionally, CRAs are only allowed to provide consumer reports to someone with a “permissible purpose,” such as an employment background check. In the event that a consumer disputes credit information, a CRA is required to conduct a “reinvestigation” into the information reported, which requires the CRA to make a reasonable effort to determine the validity of the reported information. A CRA must also take proper steps to dispose of consumer information by either shredding, burning, or pulverizing the records (or destroying any related electronic information).
Likewise, companies and groups that provide information to CRAs (known as “Furnishers”) are also governed by the FCRA with similar requirements as CRAs. Under the FCRA, Furnishers are restricted from sending certain information to CRAs, such as information that would cause a reasonable person to doubt the accuracy of the information or information that a consumer properly reported to a creditor as inaccurate. Additionally, if a Furnisher has reason to believe that information it has sent to a CRA is inaccurate or incomplete, it is required to promptly notify the CRA of the issue and provide the necessary corrections to the CRA.
As is the case of a landlord, if a CRA or a Furnisher violates the FCRA, it may take the force of a lawsuit to hold them accountable.
How to protect your rights?

If you were recently subject to a wrongful background check by a landlord, if you were denied a lease based on the results of a background check, or if a CRA or Furnisher wrongly acted in violation of the FCRA with respect to your credit information, contact the attorneys at Consumer Attorneys now to protect your rights. The attorneys at Consumer Attorneys have significant experience litigating under the FCRA on behalf of their clients. Let the attorneys at Consumer Attorneys fight for you!

What is a landlord background check

Adverse Actions

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