Prospective Tenants Make Me Nervous - What Would You Do?

[Amethyst]

I am very nervous about a couple who want to rent our townhouse. My husband dealt with them, and he tends not to be as rigorous as I am about asking for information. He unwisely accepted a check for $150 for earnest money, which they now firmly believe means we have to rent to them as long as they provide a landlord reference, a myannualcreditreport.com printout, and some form of proof of income (which is what he told them). They haven’t yet provided their “myannualcreditreport.com” or proof of income, but with the small amount of information they have provided, I have been checking things out on line and things are not adding up.
The couple met my husband at the townhouse twice-once yesterday, once today. Each time, they were more than ½ hour late. They never gave their last name until the man wrote the check.
On-line court records on a man of the same name and age (it is not a common name) say he was foreclosed upon in May 2009.
Their check for the earnest money deposit, bears a different address than where they are currently living. But, on public records, the property on the check is listed as still belonging to the man.
The woman told me they are on a “month-to-month” lease (there is no such thing). She said they always pay their rent on time and the landlords will back them up on that. She stressed how clean and neat a housekeeper she is.
The place where they are renting is, in fact, registered to the people they call their landlords, but the property is listed as owner-occupied. This suggests to me that they are temporarily renting rooms in the landlords’ home, unless the landlords themselves are lying to the county to avoid paying the extra property tax on a rental property.
We are getting more and more uneasy with this couple. Would they have a case against us (discrimination) if we just gave them back their money?

 

[W2R]

If they were foreclosed on, wouldn't that show up on their credit report?

 

[freebird5825]

Disclaimer: I have no idea about rentals and landlording or discrimination(in that context).

If you can come up with a bulletproof reason as to why the property is currently unavailable (didn't a pipe just burst?), and return their uncashed check immediately, I'd say go with your instincts.
Would it be better to lose a months' rent or have a potential nightmare tenant for a longer time?
Technically, they have not delivered ALL of the required documentation, and no lease has been signed, so I don't see any obligation on your part. But you know the rental area better.

 

[Amethyst]

I'd think so....things have changed so much since we last did our own renting (used property managers for several years). Never heard of a foreclosure before, now they are everywhere.

 

[calmloki]

Are they in a protected class? If not, then always go with your gut. It's cheaper in the long run. If they are in a protected class then still go with your gut if you are not discriminating against them because of their protected class status. I'd think it unlikely they would do more than bluster and threaten. BTW - we do month-to month tenancies, so his month-to-month lease may just be an error in terminology on his part, like calling a fee a non-refundable deposit. What is their past rental history? how far back? It's a good idea to check with the penultimate landlord rather than the last one - the last one may just really really want them gone, or be a buddy or shirttail relative. It's your place - give them the check back and tell them you don't want to rent to them - when they argue tell them that that confirms your suspicions.

 

[aaronc879]

1.They never gave their last name until the man wrote the check.
2. On-line court records on a man of the same name and age (it is not a common name) say he was foreclosed upon in May 2009.
3. The woman told me they are on a “month-to-month” lease (there is no such thing).

1. I very rarely tell people my last name unless asked. Doesn't seem unusual to me.

2. Probably half of people currently looking to rent are people who were recently foreclosed on.

3. Sure there is! My last apartment was a 1-yr lease then month-to-month there after. After the year was up, I lived there another 6 years month-to-month. I just had to give 45 days notice when I wanted to move. Month-to-month leases are fairly common. At least around here they are.

 

[Nords]

He unwisely accepted a check for $150 for earnest money, which they now firmly believe means we have to rent to them...

I think "earnest money" would mean that you wouldn't rent the place to anyone else while you were processing their application. You're probably not going to cash their check until you're satisfied with their application, and it doesn't sound like either one is going to happen. Does your area's landlord-tenant code say anything specific about earnest money? If not then there's no obligation from you.

... as long as they provide a landlord reference...

If their current landlord wants to get rid of them then he'll give you a glowing reference. If your research is causing concern then you have reason to ask for references from earlier landlords, at least the one before their current landlord. If they won't provide any more references then you hand back their uncashed check with your best wishes and warm regards.

They haven’t yet provided their “myannualcreditreport.com” or proof of income, but with the small amount of information they have provided, I have been checking things out on line and things are not adding up.

When you set up the next meeting you could mention that you've been holding the place for their earnest money even though you have other prospective tenants. You could emphasize the need for them to be on time for this meeting so that you could respond to the other tenants in a similar timely manner. If they're unreasonably late (for the third time) then you could "cancel" their application, mail their check to the address listed on their application, and move on to the next tenant.

If they show up reasonably on time then you could ask your questions about the foreclosure and the check's address. If you don't like what you hear then you tell them so, return their application and their check, and move on. If you can't tell either way then you could thank them for their credit report & income verification, tell them that you'll be checking additional references on those documents, and ask for references from earlier landlords.

Their check for the earnest money deposit, bears a different address than where they are currently living. But, on public records, the property on the check is listed as still belonging to the man.

FWIW our county recorder's office is months behind. It's not uncommon for databases to be out of date for up to a year. And if they left the property in advance of foreclosure or a short sale or some other issue, which may be grinding through the courts, then it's possible that the change in ownership hasn't even reached the recorder yet.

But regardless of the putative answers, it's worth asking the question just to see what kind of body language you get with the answer.

The woman told me they are on a “month-to-month” lease (there is no such thing). She said they always pay their rent on time and the landlords will back them up on that. She stressed how clean and neat a housekeeper she is.

I don't know practice in your area, but when a lease expires here with neither party giving notice then it's assumed to revert to a month-to-month lease. Our local landlord-tenant guide lists the specifics of how that happens and what notices are necessary to raise the rent or terminate the month-to-month occupancy.

In any case you would think that a tenant claiming to be on a month-to-month lease could prove it by providing a copy of a... month-to-month lease. You could ask to see such a copy for the purpose of verifying the info on their application, including how long they've been month-to-month.

She said they always pay their rent on time and the landlords will back them up on that. She stressed how clean and neat a housekeeper she is.

So she won't mind providing the names & contact info of those other landlords. Great!

As for neat & clean... I've never met a tenant who stressed that they were a slob. You have cause to be concerned about a prospective tenant who's trying to sell you on their housekeeping skills instead of on their references and their credit check.

The place where they are renting is, in fact, registered to the people they call their landlords, but the property is listed as owner-occupied. This suggests to me that they are temporarily renting rooms in the landlords’ home, unless the landlords themselves are lying to the county to avoid paying the extra property tax on a rental property.

I can't tell whether that's good or bad. The current landlord, who may be eager to be quit of them, is always difficult to assess as a credible reference.

We are getting more and more uneasy with this couple. Would they have a case against us (discrimination) if we just gave them back their money?

Discrimination issues may be clearly described in your landlord-tenant guide. For example it's discrimination if you've brought up race, creed, religion, national origin, or political party. It might be discrimination if you limit tenants by the number of family/kids, unless your townhome has successfully instituted some sort of "adults only" policy (which is in itself a difficult legal challenge). It's not discrimination if you limit tenants by pets. (Well, it's not discriminating to the humans, anyway.) It's not discrimination to impose a policy of "no subletting" or to insist that all occupants be listed on the lease (no live-in buddies).

It's also not discrimination if you keep asking questions and checking references and eventually decide that you don't like the answers. You make copies of their application & check for your files. You meet in a public place, tell the tenants "We're concerned by your habitual lateness for our appointments, the difficulty in getting satisfactory answers to our questions, and the other issues we've turned up in our research. We've decided to turn down your application and keep advertising for another tenant", return their application & check, and leave the place.

You could tell your side of the story to a lawyer or a judge, as well as your concerns that the truth has been misrepresented, and there's clearly no discrimination in that situation. But it still might make for great drama on Judge Judy.

 

[figner]

Many great replies already- I'd trust your instincts. Also want to point out that if you think there'd be problems turning them down now, just wait till they're moved in if there's an issue getting rent or evicting them. It doesn't get any easier once they're tenants!

 

[calmloki]

... if you think there'd be problems turning them down now, just wait till they're moved in if there's an issue getting rent or evicting them. It doesn't get any easier once they're tenants!

True words there...

 

[Urchina]

Also, document what you're telling us here, in their file. Even if you're not going to rent to them, put together a file for them. In it goes all the info they're giving you, and all the info you get about them from someone else, as well as your notes about their lateness to meetings, etc. If you do reject their application, and they push it, you then have a batch of information to back up your claims, instead of just having to wing it. I'd keep it for at least a couple of years.

Also, we aren't landlords, but I've NEVER brought a credit report to a prospective landlord. They've always charged me about $35 and gotten it themselves. I'm assuming because that way they know they're getting the whole (and undoctored) report. Might be worth it for you, if you feel like they're being dodgy.

 

[tryan]

Regarding the $150 ... just refund it with the denial. I used to charge a "holding fee" ($50) which was either applied to the rent OR refunded after the ap was processed.

Also helps to go to the house they're renting. Knock on the door and see how they live. Use the visit to 1) refund the $150 or 2) sign a lease. You can make a binary decision based on what you see.

Foreclosed tenants, month to month lease, renting the owners/landlords house, being late, different check address, is all standard stuff. Welcome to Tenant Screening 101. If you look hard enough you'll get the eebie-geebies about ANYBODY. And you're looking awfully hard.

FWIW I don't pull credit reports; more important to see how they live (that's how they'll treat your property). AND make sure they have 3x the rent coming into the house (one for you, one for utilities and taxes, one for them). Paystubs and bank statements ... not word of mouth. Then call the landlord 2 back for a reference.

 

[Westernskies]

RUN.

As a former landlord, I can tell you that tenanats never look better than the day before they move in. If are getting evasive answers and bad vibes now, it is only going to get worse. MUCH worse.

RUN.

FWIW, I had a good friend who had pretty good luck with rentals. His standard qualifier was to follow them back out to their car- if it was dirty, poorly maintained, ashtrays overflowing, back seat was full of fast-food wrappers, he would politely tell them he would not be able to rent to someone who lived like that; his assumption was that they would treat his house the same way.

 

[Texas Proud]

RUN.


FWIW, I had a good friend who had pretty good luck with rentals. His standard qualifier was to follow them back out to their car- if it was dirty, poorly maintained, ashtrays overflowing, back seat was full of fast-food wrappers, he would politely tell them he would not be able to rent to someone who lived like that; his assumption was that they would treat his house the same way.

First.. to the OP... as others have said... if it smells bad now... it will not get better...

As to Westernskies.... well, I guess I am the exception... my daily commute car is just for me... if there is something I do not need, it gets tossed in the backseat... (I have a two door, so it is on its own back there).... my house (when I was single) was taken care of... there might have been stacks of paper around... and looked cluttered, but it was clean... and I fixed everything that went wrong... with better than I needed... but then again, I have not rented in over 25 years....

 

[Leonidas]

She said they always pay their rent on time and the landlords will back them up on that. She stressed how clean and neat a housekeeper she is.

People that go out of their way to tell you how great they are at something are usually the exact opposite.

 

[HpRyder]

Amethyst:
No where in your post did you indicate they filled out an application. Did they? That should have had all the information you need; legal authorization to run a credit check, verify employment, landlord address & phone number, etc. Missing information is sufficient to cancel an application, as are lies on the application.

As for the 150, next time you meet have them sign a holding agreement. Get one from your local apartment association. You can also get a rental agreement from them. Do NOT use, I repeat, do NOT use the ones you get from Office Depot, Staples or any other generic ones. You will need one specifically legal for your state. If they don't want to sign the holding agreement, return their money canceling their application.

Do not accept any credit report they provide. With todays computers they can all too easily alter one. Make friends with a realtor and after they have signed the application giving you the legal right to run the credit report, have the realtor do it. Even if you have to pay for it yourself. By the way, I charge the applicant the cost of running the credit check. They pay in cash, not check, or it doesn't get done. Never, never accept what the applicant provides at face value. Verify it independently.

Sounds like you could use the info at a real estate investors or landlord association in you are. I recommend you join and get up to speed fast.

Good luck.

 

[Dennis]

I rented my Townhome out for several Yrs.. I treated it as a Object/Property and not My own Residence.. to be use and abused to expect that.. Expect to have to Repaint and Re carpet, etc after every tennant.. (in your Budget) and Have a Lawyer familar with Rentals, etc.. should have had one prior to listing to know what your and their rights are..visitation/inspections, right down the line with details..

 

[Amethyst]

Well, after the third time showing up late (to drop off the papers, which were incomplete) we sent the applicant packing. He blustered and ranted, which only confirmed our decision (and your advice). I must say, the previous landlord gave a good recommendation; but maybe he just has tough skin.
Strange thing about the tenant - he actually does own a home, and drives a car that must've cost 5X what ours cost, and here he is looking to rent...
Oh well, back to square one

 

[freebird5825]

...third time showing up late (to drop off the papers, which were incomplete)
...blustered and ranted, which only confirmed our decision (and your advice).
...strange thing about the tenant - he actually does own a home, and drives a car that must've cost 5X what ours cost, and here he is looking to rent...
Oh well, back to square one

Hmmmmm...are you sure that was his wife with him ?
I have a devious mind in case you hadn't noticed.

I'm sure you made the right decision.

 

[free4now]

Well, after the third time showing up late (to drop off the papers, which were incomplete) we sent the applicant packing. He blustered and ranted, which only confirmed our decision

Congrats. The landlord/tenant relationship should be mutually fulfilling. It's worth dozens or even hundreds of blustering ranting applicants to avoid dealing with a vandalizing blustering ranting deadbeat tenant.

 

[vvsonikvv]

I know you resolved the issue already, but that $150 "deposit"... was that something they initiated or you (your husband) asked for it to "hold their spot" or an "application fee."

slightly off topic question relating to that.

What are prospective renter's rights regarding application fees?

When I was looking to rent with my roommate, we found this spectacular townhouse that in my eyes was 30-40% below market rent price. It was over 2400 sq ft townhome in arlington VA near a metro for $3k. It was huge and very nice. Most other rentals in the area was about $2700 for 1/2 that size. I saw the listing on craigslist and I contacted him within hours. I had to have been the first person to see it. My roommate and I applied that night along with a $50 fee from each of us. The realtor then told us they found another renter and the owner was going with them instead of us. However if we wanted, we could "bid up" on the rental price, otherwise it was going to the other prospective renters.

Is that even legal? I felt like it was some get rich quick scam, by listing a super low price, getting people to "apply" bc it was such a good deal and then denying all of them by saying someone else wants it, you can have bidding war with them, and hope they scare away all prospects and pull in all the "application fees".

 

[tmm99]

I'm not sure if that's legal, but one time, I went to an open house for a rental. They had a few couples there at the same time. I filled out the application on the spot with a $25 check for credit check and left. I emailed them a few days later to ask the status, and they emailed back saying they are probably going with another couple. The house was allowing cats and dogs and I did write on the application form that I owned a cat, and since I knew my FICO score was quite high with good references, I asked them if they decided to go with someone else because I owned a cat. They wrote back saying my application form was fine - someone else offered to pay more than the rent specified in their ad (craigslist). I actually seriously considered for about an hour if I should bid because I really liked the place (bidding for an apartment rental was not that rare here in the bay area in 1997-1999 especially in a good school district), but I decided against it. I was actually pretty shocked that someone offered more money (this was in 2005 and there were plenty of rentals available). A few days later, the landlord emailed me asking if I was still interested. Evidently, when they ran the credit check on this couple, their FICO score was in the gutter and I bet that was the reason this couple offered to pay more... This landlord never asked me to bid against him though. If he did, I probably would have laughed at him.

 

[tmm99]

Congrates Amethyst. I feel people who are habitually late for appointments show no respect for other people's time. (I used to have a friend like that and I told her so... Now she is never late, but even if I am 2 minutes late, I hear a ear-full!) People like that probably have no respect for other people's properties either, so I am glad they were late the 3rd time so you could deny their application (which you said was only partially filled, so that's another reason!)

 

[free4now]

I know you resolved the issue already, but that $150 "deposit"... was that something they initiated or you (your husband) asked for it to "hold their spot" or an "application fee."

slightly off topic question relating to that.

What are prospective renter's rights regarding application fees?

When I was looking to rent with my roommate, we found this spectacular townhouse that in my eyes was 30-40% below market rent price. It was over 2400 sq ft townhome in arlington VA near a metro for $3k. It was huge and very nice. Most other rentals in the area was about $2700 for 1/2 that size. I saw the listing on craigslist and I contacted him within hours. I had to have been the first person to see it. My roommate and I applied that night along with a $50 fee from each of us. The realtor then told us they found another renter and the owner was going with them instead of us. However if we wanted, we could "bid up" on the rental price, otherwise it was going to the other prospective renters.

Is that even legal? I felt like it was some get rich quick scam, by listing a super low price, getting people to "apply" bc it was such a good deal and then denying all of them by saying someone else wants it, you can have bidding war with them, and hope they scare away all prospects and pull in all the "application fees".

When I was a landlord I would collect an application and $30 fee for a credit check via personal check from several interested tenants, choose the one I wanted to go with, and tell the other people I destroyed their personal checks. That seems to be the procedure among the classy landlords when I later was in the market for a rental. But there were a few that seemed to be using application fees as moneymakers, demanding them even before an understanding had been reached.

My current landlord originally requested the application fee in cash which worried me, but it turned out she was just a newbie landlord not a schemer.

 

[tryan]

Not sure what VA laws are ... try asking for the ap fee back. Especially if they want to play games (not what you signed up for!)

 

[vvsonikvv]

It's been almost a year now. I dont remember who that person was etc.

I guess that'll just be a lesson learned. And next time if that happens I'll make sure I get my money back.

Otoh, I got an even better apartment, bc this one is right next to the grocery store. So maybe it was a good thing I didn't get that apt. Just seemed sketchy for all these app fees.