Background checks are one of the most critical tools in a landlord’s screening arsenal. A thorough, legally compliant background check can reveal red flags—criminal history, eviction records, financial irresponsibility—that protect your property and your bottom line. But running a background check isn’t as simple as plugging a name into Google. There are federal laws, state regulations, and fair housing considerations that govern what you can check, how you can check it, and what you can do with the results.
This guide walks you through the complete process of running background checks on prospective tenants, from understanding your legal obligations to interpreting results and making defensible decisions.
1. Understand the Legal Framework
Before running any background check, you must understand the laws that govern tenant screening. The primary federal law is the Fair Credit Reporting Act (FCRA), which regulates how consumer reports (including background checks) are obtained and used.
- You must obtain written consent from the applicant before running a background check
- You must provide a clear disclosure that a background check will be conducted
- If you deny an application based on information in a background report, you must provide an “adverse action notice” telling the applicant what was found and giving them a chance to dispute it
- You must follow specific procedures for handling and storing background check information
Additionally, HUD (Department of Housing and Urban Development) has issued guidance on criminal background screening. You cannot automatically deny applicants with criminal records; instead, you must consider the nature, severity, and recency of the offense.
State and local laws may impose additional requirements. Some states limit how far back you can look at criminal history; others restrict what types of offenses you can consider. Always check your state’s landlord-tenant laws before implementing a background check policy.
2. Choose a Screening Method
You have three main options for running background checks: DIY, third-party screening services, or a combination approach.
- DIY Screening: Conduct your own searches using public records databases. Lower cost but requires significant time and expertise. You assume liability for FCRA compliance and data handling. Best for experienced landlords.
- Third-Party Screening Services: Companies like Zillow, Apartments.com, and specialized tenant screening firms provide comprehensive reports (criminal, eviction, credit, sex offender registry). They handle FCRA compliance and adverse action notices. Higher cost but reduced liability and professional documentation. Recommended for most landlords.
- Hybrid Approach: Use a screening service for the main report, then conduct additional verification (employment, references) yourself. Balances cost and thoroughness.
3. Obtain Written Consent
Before running any background check, you must have the applicant’s written permission. This consent should be clear, separate from the rental application, and specifically authorize a background check.
- Clear statement that a background check will be conducted
- Disclosure that the report may contain information about criminal history, eviction records, credit, and other factors
- Statement that the applicant has the right to dispute information in the report
- Your signature and date, and the applicant’s signature and date
Keep the signed consent form with your screening records. If you later deny the application, you’ll need to prove you had permission to run the check.
4. Conduct the Background Check
If using a third-party service, the process is straightforward: submit the applicant’s information and wait for the report. If conducting your own search, you’ll need to access public records databases.
- County courthouse records (criminal, eviction, civil judgments)
- State sex offender registries
- National eviction databases (CoStar, LexisNexis, Clarity)
- Credit reporting agencies (with consent)
- Previous landlord contacts
Be thorough but fair. Look for patterns, not isolated incidents. A single old misdemeanor is different from multiple recent felonies.
5. Review and Interpret Results
Background check reports can be complex. Here’s what to look for:
- Criminal History: Nature of the offense (violent crime vs. property crime vs. drug offense), severity (misdemeanor vs. felony), recency, and relevance to rental (recent or severe offenses are more concerning).
- Eviction Records: Number of evictions (one may be a fluke; multiple suggest a pattern), reasons (non-payment is more serious than a lease violation), and timeline (recent evictions matter more).
- Financial History: Collections accounts, judgments, liens, unpaid utility bills or rental debt, and patterns of financial irresponsibility.
- Sex Offender Registry: Presence on the registry is typically an automatic disqualification.
6. Make a Defensible Decision
This is where many landlords get into trouble. You cannot automatically deny an applicant based on criminal history. Instead, you must:
- Consider the nature, severity, and recency of the offense
- Consider how it relates to rental (e.g., drug manufacturing is more relevant than a 20-year-old shoplifting charge)
- Consider evidence of rehabilitation (steady employment, time passed, references)
- Document your reasoning in writing
Deny only when justified, such as for recent violent felonies, drug manufacturing, or a pattern of evictions for non-payment. Isolated old misdemeanors are usually not grounds for denial.
7. Provide Adverse Action Notice
If you deny an application based on background check results, you must provide an adverse action notice. This notice must:
- Identify the background check company used
- State that the decision was based (in whole or in part) on information in the report
- Provide the company’s contact information so the applicant can dispute the information
- State the applicant’s right to request a free copy of the report
- Give the applicant a reasonable time to respond or dispute
Failure to provide an adverse action notice can result in FCRA violations and liability.
8. Store and Protect Records
Background check information is sensitive. You must:
- Store reports securely (locked file or encrypted digital storage)
- Limit access to authorized personnel only
- Retain records for the period required by your state (typically 1–3 years)
- Destroy records securely after the retention period
- Never share reports with other landlords or third parties without consent
Improper handling of background information can expose you to liability and regulatory action.
Bonus: Common Background Check Pitfalls to Avoid
- Pitfall #1: Blanket bans on criminal history—never automatically deny all applicants with criminal records.
- Pitfall #2: Relying on arrests without convictions—only consider actual convictions.
- Pitfall #3: Ignoring rehabilitation—consider context and evidence of change.
- Pitfall #4: Failing to provide adverse action notice—always notify in writing if denying based on a background report.
- Pitfall #5: Inconsistent application of standards—apply your standards uniformly to all applicants.
- Pitfall #6: Mixing up criminal and civil records—evictions are civil matters, not criminal.
- Pitfall #7: Using outdated or inaccurate information—investigate if an applicant disputes a report.
Quick Reference Cheat Sheet
| Step | Action | Key Requirement |
|---|---|---|
| 1 | Research state/federal law | Understand FCRA, HUD, and state requirements |
| 2 | Choose screening method | DIY, third-party, or hybrid |
| 3 | Obtain written consent | Signed consent before running check |
| 4 | Run background check | Use reputable source or service |
| 5 | Review results carefully | Consider nature, severity, recency |
| 6 | Make individualized assessment | Document reasoning for approval/denial |
| 7 | Provide adverse action notice | If denying, notify applicant in writing |
| 8 | Store records securely | Locked/encrypted, limited access, proper retention |
Call to Action: Let AAOL Guide Your Screening
Background check compliance is complex, and mistakes are costly. The American Association of Landlords (AAOL) provides members with:
- State-specific background check guides and legal requirements
- Consent forms and adverse action notice templates
- Screening checklists and decision frameworks
- Updates on HUD guidance and FCRA changes
- Access to legal resources and attorney referrals
- Community support from experienced landlords
Don’t navigate background screening alone. Join AAOL today at aaol.org and get the tools, templates, and expert guidance you need to screen tenants legally, fairly, and effectively.
This article is for informational purposes and does not constitute legal advice. Background check laws are complex and vary by state and locality. Always consult a qualified attorney in your jurisdiction before implementing screening policies.
