There are five tenants applying for your home that you placed on the market (meaning, you put a craigslist ad in your area). Four of them look ok, steady jobs, good and stable rental history for the past few years and they all have verifiable jobs. The last applicant doesn’t list the previous landlord’s physical address, phone number or email address, nor do they list employers, stating ‘self-employment’.
What do you do? Your suspicions raise red flags so you fire up your trusty desktop computer, head to some online background verification websites and plug in that last applicant’s name and social security number. You want to find out if there is any criminal background activity or if they are house jumping to avoid paying deposits or rent and the big one, were they foreclosed on? But, is what you’re doing ethical and/or legal?
Well, the problem is that unless you check the public records of every applicant in a given similar situation, you may run afoul of fair housing laws, as you may not be treating all the applicants equally. You need to create a written plan and a policy which will determine under what circumstances you will check the public records and how far you will go with this. As part of this decision and plan, you will need to determine what counties you will check, and understand that in some counties, the information is not readily available and would require written requests or payment for information.
In the event of foreclosure, there are two story versions. The first version is where the applicant tells you that she was living in a home, and the owner of the home got foreclosed on, forcing her to move. The other story is the applicant was the actual owner of a single family home, was foreclosed on and had to move. If the applicant was the tenant who “supposedly” had to move, you need to verify this. You MUST verify the story, and all you need to do is look at the public records, put in the owner’s name in the civil court records to find the foreclosure, or put in the property address in the tax appraiser’s records and begin to dig. If the owner was truly foreclosed upon, you will find that information in the court records.