Author Topic: Background/credit check question.  (Read 2270 times)

MsPeacock

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Background/credit check question.
« on: March 27, 2016, 06:00:35 AM »
Just getting started on renting my basement bedroom out. I have a tenant starting in August and had no problem running the checks on her through cozy.co. There is another person who wants to take the short term summer rental while he is in the US studying English just for the summer.  Problem is that cozy uses SSN and he doesn't have one. I am looking for suggestions on a work around, such as other documentation that could be used, other sources of information or verification. He is a young forgiven college student.

Thank you!

Kwill

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Re: Background/credit check question.
« Reply #1 on: March 27, 2016, 06:08:23 AM »
If it's just a short period, could you take the risk of just taking a deposit, getting proof of his enrollment at the local institution where he is studying English, and hoping for the best?

MsPeacock

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Re: Background/credit check question.
« Reply #2 on: March 27, 2016, 07:15:49 PM »
Thank you - that is an excellent suggestion. I've had two prospective tenants who were both young college-age foreign students here to study for the summer. In both cases they wouldn't have a US SSN, driver's license, etc. Verification of enrollment should work just fine, and as you point out, it is a short-term lease.

Also - gosh, these kids on their big adventures! Nice to see their excitement.

bobechs

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Re: Background/credit check question.
« Reply #3 on: March 27, 2016, 07:46:55 PM »
I have an old college acquaintance who set up as a landlord in Santa Cruz, CA -a college town with a shortage of housing-- who as a matter of policy required all tenant applicants to pay $XX for a credit check.

He didn't actually check credit, he just used the fee as free money to him, justifying that it was a screening device; those who would pay for a checkhad decent credit and were suitable tenants, those who wouldn't didn't and weren't.

He and is his ilk are why there will be a shortage of lamposts, come the revolution.

MsPeacock

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Re: Background/credit check question.
« Reply #4 on: March 28, 2016, 07:04:57 AM »
Well, yeah. That stinks. I actually have the checks run through cozy.co and assuming it comes back good I refund the cost on first months rent. It's $35 for my peace of mind.

bobechs

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Re: Background/credit check question.
« Reply #5 on: March 28, 2016, 10:41:13 AM »
Well, yeah. That stinks. I actually have the checks run through cozy.co and assuming it comes back good I refund the cost on first months rent. It's $35 for my peace of mind.

Bear in mind that he did not collect the fee only on the single accepted tenant; everyone who applied got charged in order to be considered, and for a single vacancy that could be several people.

Why throw away good money checking up on people you aren't ever going to have do deal with again, once you shred the application?

Set the rent below market, collect the premium, pick one tenant then go ahead and jack the rent after a few months.

Too bad he wasted all that talent on a handful of shabby rentals in a college town -- he coulda' been somebody on Wall Street.


I'm a red panda

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Re: Background/credit check question.
« Reply #6 on: March 28, 2016, 11:20:04 AM »
I have an old college acquaintance who set up as a landlord in Santa Cruz, CA -a college town with a shortage of housing-- who as a matter of policy required all tenant applicants to pay $XX for a credit check.

He didn't actually check credit, he just used the fee as free money to him, justifying that it was a screening device; those who would pay for a checkhad decent credit and were suitable tenants, those who wouldn't didn't and weren't.


Is this not illegal in CA?  Maybe we went overboard to make sure we meet regulations, but we return the uncashed check for anyone we don't run a credit check on.

Cathy

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Re: Background/credit check question.
« Reply #7 on: March 28, 2016, 12:09:49 PM »
I have an old college acquaintance who set up as a landlord in Santa Cruz, CA -a college town with a shortage of housing-- who as a matter of policy required all tenant applicants to pay $XX for a credit check.

He didn't actually check credit, he just used the fee as free money to him, justifying that it was a screening device; those who would pay for a checkhad decent credit and were suitable tenants, those who wouldn't didn't and weren't.


Is this not illegal in CA? ...

It's generally not illegal, but the amount collected is part of the security deposit and would have to be returned in due course, subject only to withholdings authorised by law. (Note, however, that California law imposes a maximum amount of security. The practice described above might be illegal if the collection of the fee causes the landlord to receive more than the maximum amount of security allowed by law.)

Here is the explanation:

Section 1950.5 of the California Civil Code ("CCC") provides certain rules that apply to security deposits in the case of "a rental agreement for residential property". CCC 1950.5(a).

For the purpose of CCC 1950, the term "security" includes any amount "imposed at the beginning of the tenancy ... used or to be used for any purpose". CCC 1950.5(b) (emphasis added). This is a broad definition. A screening fee is generally part of the security deposit.

At the conclusion of the tenancy, the landlord must return the security to the tenant, subject only to lawful withholdings. CCC 1950.5(g)(1). All security must be refundable and the rental agreement cannot attempt to make any portion of the security nonrefundable. CCC 1950.5(m).

From the above, we see that in California, any application or screening fee is generally part of the security deposit and must be refunded in due course, subject only to lawful withholdings. However, this rule is subject to one exception: "the landlord or his or her agent may charge that applicant an application screening fee", but "[t]he amount of the application screening fee shall not be greater than the actual out-of-pocket costs of gathering information concerning the applicant". CCC 1950.6(a), (b) (emphasis added). In the fact pattern that bobechs posted, no actual screening is being done so there are no out-of-pocket costs, and thus this exception is not relevant, so the amount collected is part of the security deposit.

bobechs

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Re: Background/credit check question.
« Reply #8 on: March 28, 2016, 12:11:44 PM »
How can I say it was legal or not?  Dunno.

It's what he did.

Try renting a place in Santa Cruz, (before Craigslist,) during the dotcom boom, the week before fall term, and see how much leverage you have as a potential tenant.