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How Can I Verify a Tenant's Rental History?

Imagine: you’ve taken pictures of your rental suite, posted your advertisement on Craigslist, and showed the unit to multiple tenants.  Finally, one tenant tells you they want to move forward and lease your rental! Before signing the lease you want to make sure this tenant will be able to pay the rent on time, and has paid their rent on time in the past - how can you be sure of this?

One of the strongest indicators of future payment security is to look at past payment history. Unfortunately past payment history in the rental world is either inaccessible or unreliable.

In a perfect world you would be able to view someone’s credit file and confirm that they were able to pay their rent on time in rental properties they have previously lived in. Unfortunately, rental payment information is not shared with the credit bureaus so a landlord has to look for other sources to figure out if the tenant has a good rental payment track record.

Calling Previous/Current Landlords

Calling references is one of the most common practices in tenant screening; however, it has its limits.

Calling references is time consuming...

When you have a good tenant who is interested in your property you want to move as quickly as possible or risk losing the tenant to another rental. A recent Naborly customer poll showed that only 1 in every 5 reference calls result in a connection on the first try. The remaining went to voicemail and required follow-ups slowing down the approval process.

References are unreliable….

Tenant’s are motivated to ensure that their previous landlord gives them a positive review. Rather than taking the chance of their previous landlord mentioning late payments or noise complaints, it is common practice for tenants to provide the contact information of a friend or family member will then provide them with a glowing reference. Since the tenant is providing the details of their past rental and landlord contact, it is very difficult to verify the identity of the person who you are calling or trust the information they provide as truthful.

If you are calling a tenant’s current landlord who is hoping the tenant will move out (because they don’t pay their rent on time) they are motivated to give the tenant a positive recommendation.

Search through eviction databases

In Ontario, eviction records are open to the public; however, the names of tenants are stricken from the records. This means that they do not help you find out if a tenant has been through an eviction before. You can find the most recent eviction statistics on the Social Justice Tribunals Ontario Annual Report.

Search through paid private record eviction databases

Private eviction databases may exist; however, they are only accessible through credit resellers/tenant screening companies or property management softwares. These products give landlords the opportunity to report payment history or evictions manually after they have produced a credit/tenant screening report. They add this information to their database and if the same tenant is screened again through their system this history will be noted one the new report.

There are two main limitations of these databases. First, a very small number of landlords actually contribute information, mostly small property management firms that control a sliver of the rental market. Second they cost money to access, making them inaccessible to most of the landlord market.

What is the REAL solution then?

The real solution is to create one standardized and secured database in which all rental payment history is submitted, which is accessible only with the consent of the tenant. This would allow tenants to prove their ability to pay rent with a verified track record, which leads landlords to be confident in their approval decisions.

What is the solution for today?

Until verified rental history data is democratized, landlords should be focused on the verifiable information about a tenant. Naborly Reports help landlords understand if a prospective tenant is a good fit to their rental property and can afford the agreed upon rent with their verified monthly cash flow without ever picking up a phone.

Learn more about how you can get a Naborly Report on your prospective tenants for free with Naborly.

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