Background Check Flaws

Can your tenant screening/background check provider catch everything? It turns out that's a dangerous question to ask. The goal of these services is to ensure that property managers are bringing on tenants who have a good history of payment and who won't pose a risk or danger to fellow neighbors. In some cases though, these screening services may see "too much". Such was the case in Moran vs The Screening Pros.

The 9th Circuit ruled that a misdemeanor charge, that was flagged via screening, from May of 2000, where the plaintiff was under the influence of a controlled substance and which was dismissed in March of 2004, was a violation of the Fair Credit Reporting Act. The FCRA prohibits consumer reporting agencies from showing criminal history beyond seven years. The court ruled that the date of entry, when the crime was committed in May of 2000, and not the date of disposition, when the charge was dismissed in March of 2004, was when this mandatory seven year rule applies.

The implications for tenant screening providers is vast. Non-convictions have already proven problematic for automated screening systems like Real Page's, Core Logic's, and Yardi's to spot. The 9th Circuits decision will only make the screening process more difficult.

Given the shortage of available housing across the country, state governments are laying down the law on landlords when it comes to what tenants they can and cannot turn away. In the case of Cook County, it appears a reckoning may soon be on the horizon for apartment owners and the companies that fee manage for them. Combine this reckoning, in places like Oregon, with the 9th Circuit's latest background check ruling, and the complications of screening tenants just got a whole lot more complicated.