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Landlord Background Checks

Edward Y. Kroub tick border

Partner

Edward Y. Kroub is Consumer Attorneys LLP's most seasoned litigation partner and co-chairs several of the firm’s consumer finance departments.

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About Landlord Background Checks

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.

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. 

Frequently Asked Questions

  • Who else is responsible under the FCRA?

  • How to protect your rights?

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