As a hypothetical. Some landlords require a credit check to be run before leasing. You tell a prospective tenant they need to fill out a financial statement and pay 35 upfront to have a "credit check" run. Once the financial statement is completed and 35 is paid by the prospect the “credit check” that is run is actually a full background check with credit, driving record, criminal record etc. It’s quite thorough.
Is there a legal need to disclose that it’s full background check and not just a credit check that is being run on them?
I would imagine that you have to disclose that. It doesn’t seem likely that my current employers had me fill out a form granting them permission to run a full background check simply because they like to be upfront about that sort of thing.
I don’t know about the legality of it, but I don’t see any reason why a landlord shouldn’t come right out and say s/he’s running a full background check. I am a landlady myself (of a rental house), and I am also living in a rented house. References are not out of line for the landlord to request either IMHO.
I do a criminal check as well as a credit check on any prospecfive tenant. We are fortunate that our Attorney General has a website that allows that. Criminal checks are free and civill checks have a $6 charge.
One prospective tenant came up with a weapons charge as well as an assault charge. Needless to say, he didn’t get the suite.
I do the criminal and civil check first. If that comes up positive, then I do a credit check. I eat any charges for it.
$35 or so, seems to be a common amount for landlords to charge every prospective tenant for the check – whatever they are checking, whatever they say they are checking. I think it’s a scam. It doesn’t cost that much for those checks. And if they collect this fee from many applicants for one apartment, they probably aren’t even running all those checks anyway. They are just pocketing the fee.
One manager told me up front that it only cost them $10 and that’s what they charged me. She also rant the check on-the-spot and had the results immediately.
Some managers will give you a copy of the background check. Others think there’s some reason they need to keep it from you. Same with a credit check.
They’re looking for any hint or clue that you might not always pay your bills. A credit check would also show things like bounced checks, I think, and any bills you didn’t pay that were sent to collections. It’s more than just a history of your credit card and bank load and mortgage payments.
My WAG is that the specifics will depend on the laws of your state. Whenever I was asked for a background check (employment, never tenancy), the form I got was specific that I had to sign and affirmatively consent to it, AND that I had the right to request a copy of the results if I wanted them. Given that language, I’m pretty sure doing it without my consent would have been illegal. This was in Illinois.
While there are certainly landlords who do try to scam money out of prospective tenants this way, it was definitely illegal to do so in my state when I was running applications, and the profit margin on the scam is ridiculously low at $25 or $35, so even the seedier landlords generally wouldn’t bother risking it. Not that it didn’t ever happen. I can recall some “premium” apartment company running this scam with application fees that were in the hundreds of dollars, and they got raked over the coals in the courts and in the news for it.
Our application fees were equal to the fees that Rental Research (a company that processes applications) charged, so not only was there no profit when we went that route, but the small amount of time and labor to send and receive the application to them was uncompensated.
When we ran our own checks, the credit report (from TRW or whatever) was part of it, and cost less than the $35 fee, but we also checked references, prior rental history, and verified employment. Our agreement with the credit reporting companies was very clear that we were not allowed to share the credit report with the prospective tenant - I’m sure some landlords go ahead and do this, but they probably aren’t supposed to.
We never ran criminal checks on prospective tenants, but we did do so on prospective employees. That required additional releases signed by the prospective employee. I’m not sure how much of this policy was required by law, however.