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Looking For Honesty Is The Best Policy

Looking For Honesty Is The Best Policy

The vast majority of those in rented accommodation are good tenants who pay their rent on time and never cause their landlords any unnecessary trouble. Unfortunately however sometimes a good tenant can go bad and what was a happy, mutually beneficial relationship breaks down with it. On other occasions the tenant was just bad to start with and the tenure of their stay was wrought with problems from start to finish. Unfortunately, evicting a problem tenant is not always the end of the matter. If the damage they have done goes beyond what can be covered by their security deposit, landlords may well find themselves out of pocket and have trouble finding someone new to live in the property. Relationships with neighbors and the wider neighborhood may also be adversely affected. It is better, therefore, to look for the warning signs before the lease is agreed.

The Importance of Good Faith

In America, the law provides us with a safety net but it does not control our lives. Consequently it is possible to have a tenant who lives entirely within legal boundaries but is still a liability to deal with. A tenant who performs only the bare minimum that the law requires cannot be said to be acting with honesty and good faith. They will be a frustration to deal with while they pay their rent, but can be far worse when things go wrong. They will try every trick in the book to make your life as difficult as possible, whilst giving you as little room for recourse as they can.

For example, most leases do not permit the use of illegal drugs on the property, and current usage can be a reason for rejecting an application. The reason that certain substances are prohibited is that their consumption has a deleterious effect on society itself. Dealing with an unstable heroin addict or even an irresponsible marijuana smoker is every landlord’s nightmare. The spirit of the law is the desire to maintain and orderly, workable society, but this can be subverted by a disingenuous person. There are plenty of legally available substances that have a narcotic effect if ingested. These so-called ‘legal highs’ can be just as dangerous to the user as illegal drugs and cause just as many problems for their landlord, especially as they are much less likely to acknowledge the problem and seek appropriate help.

Avoiding Evasiveness

Prevention is always better than a cure, and when deciding whether to agree a lease with a new tenant, it is sensible to check their background. Asking for references is a good start, but as they can be relatively easy to fake, conducting an interview is always worth the effort. Prepare you questions in advance and consider how to interpret their answers. The key quality to look for is honesty. A person who has had trouble in the past but is up-front about it is far less likely to cause you problems than someone who tries to shift responsibility for their own mistakes.

This does not mean you should be suspicious of a blemish-less record, most people have never given trouble and never will. What you should be wary of is evasiveness or shiftiness. Hard times can befall even the most blameless person. When they do, what you want are tenants who when facing difficulties paying their rent or who damage your property by accident, let you know at the earliest opportunity. This allows you to mitigate any losses you incur, process insurance claims easily, and helps to maintain a positive, low-stress relationship. Tenants who promise to pay the rent on time and make excuses for failure or who hide damage until they have vacated are far more trouble to deal with!

Ultimately, honesty is the barometer by which you can decide whether to cut a tenant some slack. Someone who lies to you to protect themselves is likely to do so again and again, until they have normalized what would have been unacceptable behavior and made themselves impossible to remove. Even an honest tenant with an unstable life is better, provided they keep you up to speed with it, and help to manage the problems it causes. With time and luck they will get their lives back on track and become the best kind of tenant; honest and trouble-free!

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The Fair Credit Reporting Act and Landlord-Tenant Law

The federal Fair Credit Reporting Act (FCRA) went into effect in 1971.  It regulates consumer reporting agencies (CRAs), the use of reports, and furnishers of information to CRAs. Some states have similar statutes.[1]

  1. CRAs

CRAs must utilize reasonable procedures to ensure maximum possible accuracy of information and must conduct an investigation after a consumer disputes the accuracy of information.

Violation may lead to damages and attorney fees if negligent, and also statutory damages and attorney fees if willful.

  1. Use of Reports

Users of consumer reports must give written notice of adverse action. The notice must contain

  • A statement of the adverse action taken;
  • The name, address, and phone number of the CRA that supplied the report;
  • A statement that the CRA did not make the decision and cannot supply the reasons for the adverse action;
  • A notice that, upon a request by the consumer made within sixty days, the consumer may obtain a free copy of his or her consumer report;
  • Disclosure of the consumer’s right to dispute with the CRA the accuracy or completeness of the report; and
  • The credit score used by the person in taking the adverse action and related information.

 

Denial of a lease based on a consumer report is an adverse action.[2]

 

The 7th Circuit Court of Appeals has held there is no private cause of action for violations of adverse action duties under federal law.[3]  However, state law must also be considered.



[1] See, for example, chapter 19.182 RCW (Washington).

[2] 15 U.S.C. §1681a(k)(1)(B)(iv); Cotto v. Jenney, 721 F.Supp. 5 (D. Mass. 1989); RCW 19.182.010(1)(a)(iv); RCW 59.18.257.

[3] Perry v. First Nat. Bank, 459 F.3d 816 (7th Cir. 2006).