Most of us would like to believe that people follow the Golden Rule. However, the truth is that some prospective tenants do create fake landlord references when they fill out an application to rent a home.
In this article, we’ll discuss some common reasons why tenants give fake references, seven tips for spotting fake landlord references, and how to handle a prospective tenant who gives a fake reference.
- Fake landlord references can be given by tenants who know how to work the system.
- Tips for spotting a fake landlord reference include cross-checking the phone number, asking the reference for specific information about the tenant and the property, and checking out the tenant on social media sites.
- A fake landlord reference can be legitimate grounds for rejecting a prospective tenant.
Why do tenants create fake references?
There are two main reasons why tenants create fake references.
In the first case, tenants who are masters of deception when it comes to finding a new home will tell a landlord or property manager whatever they want to hear in order to get a new lease signed. The second reason why tenants create fake references is because they figure that a little “white lie” won’t hurt anyone.
Let’s take a closer look at why some prospective tenants might lie when they apply fill out an application to rent a home:
The Professional Tenant
Some landlords who are new to the real estate investing business may make the mistake of believing that a professional tenant is someone who wears a button down shirt or a suit and tie, and goes to a 9 to 5 job every day.
Unfortunately, the definition of a professional tenant for rental property owners is something completely different. A professional tenant in real estate is someone who knows how to game the system.
They’re masters at manipulating landlord-tenant laws to avoid paying rent. They’ll play games such as claiming a home isn’t habitable to justify withholding the rent. If and when they do get evicted, they’ll drag the process out as they desperately search for their next victim-landlord.
In order to get approved for a new home before they get locked out of their old place, they’ll create fake references, then want to move in ASAP as soon as they’ve been accepted.
The “Innocent” Tenant
In many real estate markets today, the demand for housing is strong and good rental properties are hard to find. Tenants who are desperate to find a new place to live may decide to embellish their rental application with the hope of moving to the head of the pack of other applicants that want to rent the same home.
For example, a tenant who has never rented before may ask a friend to pretend to be a former landlord. There may be innocent reasons for never having rented, such as a Generation Z renter who just graduated from school, or someone who has always rented with roommates and never had their name on a lease.
Even though they may have a good job and a decent credit score, some tenants may decide to lie just a little bit because they figure that they’ll never get caught. The potential issue for a landlord who approves a tenant who is okay not telling all of the truth is that small lies can eventually turn into big lies and a problem tenant.
Seven tips for spotting a fake landlord reference
Renting to a tenant who doesn’t tell the truth can lead to negative cash flow from a costly eviction, or dealing with a renter who doesn’t understand the responsibilities of being a tenant.
Fortunately, there are several quick and easy ways a landlord or property manager can run their due diligence and spot a fake landlord reference:
1. Cross-check phone numbers
The first step to check if a landlord reference is fake is by conducting a reverse phone number lookup. Services such as Spokeo and Whitepages.com can provide phone number owner details, location, alternate contact info, and names of family members. If the information doesn’t match what the prospective tenant said, the odds are that the reference may not be legitimate.
2. Research property tax records
Another quick and easy way to verify a landlord reference is by checking the property tax records to verify ownership. Most county tax assessor websites have property owner information online that can be found by simply entering the property address. However, beware of ‘false negatives’ when researching tax records. Sometimes real estate investors hold rental property under the name of an LLC, or use the name and mailing address of their local property management company.
3. Call the reference’s phone number
Cross-checking a phone number and researching property tax records can quickly and easily be done online. If the landlord reference appears to check out, the next step is to call the reference’s phone number. Some landlords pretend to be looking for a home to rent to verify that the reference is real, while others use an upfront approach and explain exactly why they are calling.
4. Verify tenant details
Ask the landlord reference for details about the tenant, such as the amount of the monthly rent and security deposit, move-in and move-out date, how many people were renting, type of car they drove, and name of the family pet. While some landlords may not keep the best of records, if the reference can’t verify any of these details, that may be a sign that the landlord reference is fake.
5. Ask for specific property information
While a landlord reference may not recall every detail about a tenant, the reference should know specific information about the property they own by heart. Details such as number of bedrooms and baths, square footage, age of the home, parking, and when the property was purchased or refinanced can easily be found online and double-checked against the answers the landlord reference gives.
6. Listen to responses
Sometimes a landlord can learn more about a prospective tenant by reading between the lines. For example, responses such as “That sounds about right” or “I might consider renting to them again” could be a sign that the landlord reference is false or that the current landlord can’t wait for the tenant to leave.
7. Check social media
If everything about the landlord reference checks out, the final step is to research the social media accounts (Facebook, Instagram, LinkedIn, etc.) of both the reference and the applicant. People share a surprising amount of information online, so if the reference and applicant are friends or follow each other, it could be a sign that the relationship is more personal than being a landlord and a tenant. A good additional step would be to Google their name and see what you find.
How to handle fake landlord references
When a tenant provides a fake landlord reference, it can be tempting to simply reject the prospective tenant and move on to the next applicant.
However, the potential problem with choosing this route is that the tenant may claim they were discriminated against, especially if their application appears to be squeaky clean.
Instead, a landlord may explain to the prospective tenant in a non-confrontational manner why a reference given appears to be incorrect. The odds are that the applicant may apologize, then move on and learn from their mistake.
On the other hand, if a declined applicant becomes adversarial, a landlord may remind a tenant that falsifying documents could be illegal. As the legal resource website Nolo.com explains, misrepresentations on a rental application are always legitimate grounds for rejecting a tenant.
Steps for screening new tenants
Apartment List is an online rental listing service where landlords only pay if a lead converts to a move-in. The company’s pay-per-performance model is based on collecting and analyzing renter data to provide better matches to landlords.
According to Apartment List, landlords can follow these steps to screen tenants and find responsible renters:
1. Set standards
The first step in finding a responsible renter is to set minimum standards that are applied to each applicant. Qualifications may be based on:
- Credit history
- Landlord and employment references
- Criminal history (following rules set by state landlord-tenant laws and HUD guidance)
2. Request a tenant application
Every potential tenant should also complete a tenant application, and acknowledge and agree to allow the landlord to run a credit and background check and contact employers, along with current and previous landlords.
A tenant application should include questions regarding:
- Employment status
- Household income
- Financial standing
- Landlord references
- Size of household (how many people will be renting)
- Number and type of pets (if applicable)
- Personal references
3. Run a credit check
Credit checks run by online tenant screening services comply with the Fair Credit Reporting Act (FCRA) and usually allow a landlord to require an applicant to pay for screening. By reviewing an applicant’s credit report, a landlord can better determine whether a larger security deposit is required (up to the maximum allowed by state landlord-tenant laws), or require a cosigner on the rental agreement–both actions that would trigger the need to send an adverse action notice.
4. Run a background check
A landlord may use a background check to help predict a prospective tenant’s behavior. That’s because a background check can reveal past evictions, criminal records, and other information found in various public record databases.
5. Contact landlord references
After cross-checking the reference phone number and reviewing the property tax records to verify ownership, the next step is to call the applicant’s landlord references and ask questions such as:
- Did the tenant pay rent on time?
- Was part or all of the security deposit withheld, and if so, why?
- Would you rent to the tenant again?
6. Interview the tenant
The final step for screening a new tenant is to meet in person. This provides a landlord with the opportunity to verify information on the tenant’s application, and to ask the tenant additional questions such as:
- Do you have pets or roommates?
- Do you smoke?
- Do you frequently have overnight guests?
- What are your typical working hours?
When asking the tenant additional questions, landlords should take care to comply with Federal Fair Housing Laws.
Landlords have a number of responsibilities, and treating a prospective tenant fairly is one of them. Unfortunately, sometimes a tenant tries to take advantage of a landlord by giving a fake reference.
One good way to avoid having to deal with tenants who don’t tell the truth is by hiring a professional property management company. The best local property managers deal with tenants all the time, and understand how to quickly identify a fake landlord reference as part of the routine tenant screening process.