Screening prospective tenants is the single most important aspect of the rental process for a Wisconsin landlord regardless of whether s/he is renting out a residential or commercial property. If done properly, screening can save a landlord a lot of money, a lot of time, and a lot of headaches. Setting up a proper and legal screening process, which includes the drafting of a good Rental Application and legal written Screening Criteria, can help reduce the need to evict a tenant, defend yourself against a claim that you violated the Wisconsin Administrative Code’s Residential Rental Practices (ATCP 134), defend yourself against a claim for discrimination under Fair Housing laws, and preserve your property from physical damage.
There are several steps to a good tenant screening process. First, you must verify that the applicant is who s/he says they are. The best way to do this is to require each adult applicant to completely fill out a rental application. You should also ask each adult to provide you with valid photo identification. Request a copy of the applicant’s prior utility bill or cable bill as well. You want to ensure that the address on the bill is the same as the address listed on the photo identification and the rental application. You should also obtain the applicant’s date of birth and social security number. Require that the applicant provide you with any prior names that they have used in the past few years such as maiden names if they were recently married, or married names if they were recently divorced. If you are renting to a business entity verify its existence with the Secretary of State’s Department of Financial Institutions. Obtaining all of this information will greatly assist you during the screening process.
Second, have written screening criteria in place before you start accepting rental applications and ensure that your criteria is legal and applied consistently. You should set forth the minimum requirements that are necessary to rent your property as well as what will cause an applicant to be denied in your screening criteria. You may provide the written screening criteria to each prospective applicant along with the application if you wish. At the very least, however, you should memorialize the criteria in writing, date it and keep it for at least 3 years. It is important to remember that if you make an exception to your screening criteria for one applicant that you have now lost the protection of having the criteria in the first place —- so avoid making any exceptions. The screening criteria should be used as a checklist of sorts. If they meet requirement #1 then move on to requirement #2. If they don’t meet requirement #1 – then you stop and deny the applicant.
Your screening criteria should not be subjective. Rejecting an applicant because they give you a “bad feeling” or because you did not “connect” with them will only run you afoul of Fair Housing laws. Your criteria needs to be objective. Federal law contains seven (7) different protected classes and the state of Wisconsin has a total of twelve (12) protected classes. Local municipalities often have additional protected classes so you must check local ordinances. You may not deny an applicant because they are a member of any of the following protected classes in Wisconsin: race, color, national origin, sex, religion, familial status, handicap, marital status, sexual orientation, lawful source of income, ancestry and age (18 years old and over).
A common misconception is that you cannot reject an applicant because they smoke, because they have a money judgment against him/her, or because they have been evicted in the past. Smokers, debtors, and people who have been evicted are not members of any protected class under federal or Wisconsin law and therefore your screening criteria can exclude them without violating Wisconsin or federal discrimination laws. Other examples of legal screening criteria in Wisconsin may include the following: (1) Applicant must have gross monthly income of 3 times the monthly rental amount; (2) Applicant must have no unsatisfied money judgments against them; (3) Applicant must have a credit score of at least 600; (4) Applicant must complete all questions on the rental application; failure to answer all questions or provide an acceptable reason for not answering all questions are grounds for denial of your application. What type of screening criteria you have often depends on the location of the rental property, the type of renter you are looking for and a landlord’s willingness to tolerate risk.
Third, you should run every applicant’s name through Wisconsin’s Consolidated Court Automation Program (CCAP). This website lists all criminal and civil legal actions filed throughout Wisconsin. By becoming adept with CCAP’s search capabilities you will be able to discover if a prior landlord has started an eviction action against your applicant, if your applicant has ever been charged with a crime, or if they have been sued for owing money to someone and whether or not they have satisfied that judgment. Best of all CCAP is free and open to the public (at least as of this writing however one Wisconsin Assemblyman has introduced a bill that if passsed will significantly restrict CCAP’s access to landlords).
Fourth, you should obtain a credit check on any applicant that is still under consideration after you have completed the above three steps. A landlord may require the applicant to pay the actual cost of the credit check up to $20 in Wisconsin. In order to charge this fee however you must obtain the credit report from a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis (TransUnion, Experian or Equifax) and you must notify the applicant of the cost before ordering the report and provide them with a copy of their credit report after it is received.
These four steps for screening and qualifying a prospective applicant for your rental property are the bare minimum that a landlord should to to ensure that s/he is protecting their investment.
