May 19, 2022
Last Updated
In this week’s episode, Podcast Host, Property Manager & Business Owner, Andrew Schultz, chats about using electronic locks for rental properties and which ones are Rent Prep’s top picks.
Can you look up a tenant’s criminal history? You sure can. But, what you can do with the information is a puzzle on its own. Find out more by listening to our latest podcast.
Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlord’s podcast. This is episode number 378, and I’m your host, Andrew Schultz. On today’s episode, we’re gonna be talking about asking tenants about their past felony convictions properties that suddenly have criminal activity and the best locks for rentals from single-family to a thousand doors. We’ll get to all that right after this.
Voice Over: (00:26)
Welcome to the Rent Prep for Landlord’s podcast. Now your host, Andrew Schultz.
Andrew Schultz: (00:31)
If you joined the free Rent Prep for Landlord’s Facebook group, we’re on the push for 13,000 members. If you have a question or a situation you’ve never encountered, or you just need to bounce an idea off a big group of housing providers, this is the place. So if you haven’t checked it out yet, do that today over at facebook.com/groups/rentprep. Don’t forget to mention the podcast when answering the questions. So we know how you found us.
Voice Over: (00:55)
Water cooler wisdom, expert advice from real estate pros.
Andrew Schultz: (01:04)
Our first water-cooler wisdom of the today is a tenant screening question. Let’s go ahead and jump right in here. Can we still ask if a prospective tenant has been convicted of a felony? I use rent prep questions to ask the tenant. I assume they’re talking about like the pre-screening questions and now the wording has been changed to relevant crime. How are you dealing with what questions to ask to avoid being charged with a human rights violation? Uh, we’ll go ahead and answer this one as simply as we can. And the simple answer is that there is no simple answer to this question. Every state has a little bit different laws when it comes to tenant screening. So generally speaking, you’re going to wanna start by looking at what the law is at your state level to determine what you can and cannot look at.
Andrew Schultz: (01:46)
I know that I’ve mentioned this probably several times before here on the podcast, but back in 2019, New York state updated its landlord-tenant laws under HS TPA, um, the housing stability and tenant protection act. And we’ve also seen several legislative changes since then as a result of the COVID 19 pandemic. Prior to that law being passed in 2019, we were allowed to look at eviction data. We could look to see if a tenant had evictions in their past, how many evictions, all that sort of information. Once that law passed eviction data was no longer something we could look at. Essentially New York state decided that we no longer needed access to that data. Obviously, this is a pretty big concern for housing providers as eviction data is a very good indicator as to whether or not someone is going to be evicted. Again, there are some stats out there that show that once a tenant has had one eviction, they’re more likely to have subsequent evictions.
Andrew Schultz: (02:41)
I’m pretty sure that data came from a one of the credit bureaus, but I couldn’t put my fingers on it right away when I was recording this segment. I’ll see if I can get that, uh, down the road here. It’s also a good idea to keep in mind that individual municipalities or counties may have additional tenant screening guidelines that you have to follow. So for instance, going back to HS TPA here in New York, prior to HS TPA, there was no lawful source of income legislation at the state level. Essentially, there was nothing that stated, um, that you had to accept any lawful source of income, like a section eight voucher or whatever the case may be. However, here in Erie county, uh, we did have a lawful source of income law on the books that required us to accept those lawful sources of income, such as section eight.
Andrew Schultz: (03:27)
And it was done because there were so many people that we’re saying, no, we don’t wanna work with section eight that the government essentially had to step in and say, this is a legal form of income. You are required to consider it. Uh, and that’s essentially where that piece of legislation came from. It started here locally, and then it eventually found its way up to the state level. So you really have to understand what the laws are in your area in order to make sure that you aren’t in violation of them. When you’re looking at data and making decision on applications at the federal level, there is guidance published by HUD that discusses the use of criminal records by housing providers, it’s dated April 4th, 2016, and you can find it on HUD’s website, which is hud.gov by searching for use of criminal records in the search box, in the upper right-hand corner.
Andrew Schultz: (04:13)
And it should be the first link you come across. I would encourage you to spend some time reading through this document. It’s about 10 pages in length, and it talks about how housing providers should examine criminal records when it comes to tenant screening. Now I’m not an attorney, so I’m not gonna sit here and try to interpret that piece of documentation that the, that HUD provides. But it’s a good starting point for you to do some research and to start having a conversation with your attorney on coming up with acceptable criteria for screening your tenants. One thing I do wanna mention is that you can literally discriminate without ever having the intention of discriminating and still be in hot water just by having either a bad policy and procedure or no policy and procedure in place when it comes to screening your tenant’s credit and background checks, having a blanket policy of absolutely no criminal background will absolutely wind you up in hot water as well.
Andrew Schultz: (05:04)
So this is not something where you can just stick your head in the sand and say, well, this person’s had, you know, a, a criminal pass. I don’t want anything to do with them. It doesn’t work that way. In 2022, you have to spend some time digging into this and making sure that you have some sort of a policy and procedure in place that is going to protect you from violating fair housing law. Another thing that’s very, very relevant as we’re talking about background checks is that you should only be looking at convictions when you’re looking at background checks, arrests and charges are not the same as a full-on conviction. So in this country, everyone is innocent until proven guilty in a court of law, just because someone has been arrested or charged with something does not mean that that would be a, a disqualifier for housing.
Andrew Schultz: (05:47)
So that’s definitely something to keep in mind as well. I also reached out to Christie, who’s the vice president of operations over at Rent Prep to ask what the reporting agencies look for when they are looking at criminal records. She had sent me over an email and there’s this kind of an excerpt from that email, but I wanted to share it more or less. What exactly is it that a credit reporting agency or a background check agency is looking for when they are making these records or these reports? So from the email, in order for records to be included on Rent Prep reports, the record must fall within the reporting periods. Under the fair credit reporting act. Criminal records are reportable for seven years, unless the record resulted in a conviction. And in that case, the record is reported indefinitely judgments, liens, and evictions are also reportable for seven years.
Andrew Schultz: (06:35)
Bankruptcy records are reportable for 10 years, but there are some states where those reporting limits may vary. Once a determination is made during the screening process that the record falls within the reporting periods, then we require that any records that we input or include in the report have a number of identifiable, exact matches to personal identification of the applicant, exact matches are made from the following identifiers name, date of birth, social security number and or address certain dispositions on records can also determine the reportability of a record. So any record that is sealed expunged dropped or abandoned, um, or a case that’s vacated cannot be included in a screening report. In these cases, we remove those records regardless of how old the record may be records that have missing detail also must be emitted from reports since we are unable to determine if the reportability is accurate if we’re missing key details.
Andrew Schultz: (07:30)
As far as asking if a prospective applicant has been convicted of a felony, I would tread lightly I’d recommend checking with their individual state laws to confirm if they’re able to ask an applicant. That question during the process, we kind of already talked about that. Recently, there have been a number of developments in certain states, cities, and municipalities, which require landlords to qualify an applicant on all other information before they can even perform or request a criminal history search in some states or cities and municipalities. There’s also been legislation sometimes referred to as ban the box due to the checkbox on applications, asking if you’ve been convicted of a crime, which does not allow landlords to inquire about criminal history at all, within their rental screening process. This seems to be a trend happening in our industry. And I haven’t seen it slow down my advice, which is not legal advice of course, would be to ensure as the landlord that you don’t have a blanket policy.
Andrew Schultz: (08:23)
We kind of talked about that as well. Meaning a landlord shouldn’t be denying an applicant if they have just any sort of criminal record, if a landlord plans to deny an applicant based on a criminal record, it should be for good cause such as for safety and security reasons. And the landlord should be able to deny an applicant for criminal records based on their local laws and legislation. So there you have it, thank you Christie, for sharing your knowledge with us and explaining a bit more about what is, and is not reportable when it comes to records on credit and background checks. Our next water cooler wisdom segment is definitely an interesting one. What do you do for your tenants? When the bullets start flying, let’s go ahead and jump. Right in this one came to us via the Rent Prep for Landlord’s Facebook group.
Andrew Schultz: (09:05)
I was prepared for a lot of things in landlording, but this was not one of them. That’s a bullet hole through the front of the house that traveled all the way to the back and broke the sliding glass door. The tenants are pretty rattled and have indicated that they don’t feel safe. They’re currently staying in a hotel. I did make sure that they have insurance. That includes loss of use when they sign the lease and they have filed a claim with their insurance for that they’ve only been in the home for a month. And I’m pretty sure from what they implied, that they will want to leave the property. I’m doubtful that I will receive my may rent. Has anybody been through anything like this? And what advice can you give? So there’s a ton of context missing from this question. Unfortunately, we have no idea where the bullet came from.
Andrew Schultz: (09:44)
Was this some sort of a targeted event towards your new tenants? Was this a drive-by targeted at some random person on the street, was somebody had, did somebody have a gun that didn’t know what they were doing and accidentally fired off a shot? Like there are a lot of things here that we simply don’t know. Uh, and at the end of the day, every tenant has a right to feel safe and secure in their home. Obviously, there are things that happen in life that are outside of your control. I take it that you were probably not the person standing outside the house, firing bullets through it as you’re the housing provider. Uh, but the fact of the matter here is that it did happen. There’s visual proof. You can see the broken windows on both ends of the house, frankly, I’d be concerned if your tenants did not feel rattled about the situation, your tenants have stated that they don’t feel safe in this home.
Andrew Schultz: (10:32)
And they’ve only lived in it in about a month. For this point. These tenants are literally questioning every decision about this entire move into this property. If I was in your shoes, I would just terminate the lease and I would let these tenants move out, give them their deposit back minus any damages, and Rere the unit don’t charge them for the bullet holes. If the bullet holes were not their fault, obviously like this is not something that was a tenant cause thing, at least it doesn’t seem to be a tenant. Cause thing based on the information we have available here, this is a situation where common sense has to reign Supreme. Uh, don’t get me wrong. I love a good lease contract as much as the next property manager, but sometimes common sense just simply has to prevail in a situation like this. If you were to keep that tenant and tell them, no, you have to stay, you signed a one-year lease.
Andrew Schultz: (11:24)
Yeah, you could probably enforce it if you really wanted to. But all you’re doing is creating animosity between you and this tenant. And you’re leaving the tenant in a situation that they don’t feel safe in. Like there’s, there’s no point my recommendation again, would be let these tenants go, go ahead, let them terminate the lease process, their security deposit, the same way that you would any other standard move out and let these tenants move on with their life. And rerent this unit because these tenants are never, ever, ever going to stop thinking about the fact that a bullet went whizzing through their house
Voice Over: (12:05)
Forum quorum, where we scour the internet for ridiculous posts from landlords and tenants.
Andrew Schultz: (12:13)
You probably don’t spend a lot of time thinking about the locks and access control systems for your rental property, but it’s one of those things that as you grow, it becomes more and more cumbersome to deal with. And it’s one of those things that, especially nowadays, there are a lot of different options out there. Should you go with smart technology? Should you go with a standard lock who makes the best stuff? What exactly should you do this? Week’s forum quorum comes to us via the Rent Prep for Landlord’s Facebook group. And it deals with just that. Let’s go ahead and jump right in here. I’m looking at equipping my rentals with these locks. They’re not a smart lock, which is a plus for me, they do allow managing through an app via Bluetooth and I can have up to 50 fingerprints or passcodes wise makes decent quality stuff at a great price.
Andrew Schultz: (12:56)
What are your thoughts? Pros, cons, et cetera. So I’m not familiar with the lock that they specifically mentioned here. Um, let me back up a little bit, I’ll say that there is an absolute ton of smart home technology that’s out there currently. Some of it’s very good and some of it is not. And some of it’s very expensive and some of it is not. And there is absolutely no correlation between the dollar you spend and how good the piece of equipment is. This could easily turn into a whole different conversation about data privacy and things of that nature as well, but obviously, that’s way outside the scope of what we’re here to talk about today. Um, going back to the product, they were mentioning, the product being discussed is the wise lock bolt. And it’s spelled wise w Y Z E it’s essentially N electronic deadbolt with a keypad and a fingerprint reader.
Andrew Schultz: (13:47)
I haven’t used it, so I can’t really review it, but I did wanna bring up a couple of other options that are available out there right now, options that we’ve used or are using in our business currently that you can use and scale with. As you add more doors that also don’t break the bank because a lot of the smart home technology gets very, very expensive. Especially when you start talking about installing it at scale, I will mention the options that I’m discussing today are non-electronic non-smart options, um, which at least at the time of this recording, in my opinion, leads to them being easier to scale up. You can certainly scale up using smart and electronic options, but you have to be cautious with what the requirements are for your system. For instance, if you need wifi and the building won’t have wifi while it’s vacant, your locks might become a whole lot less useful to you.
Andrew Schultz: (14:35)
So just understand what it is that you’re buying and what you need to have in place. Before you commit yourself to a system that you wanna roll out wide scale. Now, as far as non-smart technology goes, I’m talking about standard lock and key stuff here. If you like the quick set products, I recommend the quick set, 816 double keyway deadbolt. We use these things all over our management portfolio. What we do is install the deadbolt along with a passage knob so that there’s no longer a lock on the handle. And that basically prevents tenants from locking themselves out of their units. They have to have their key and they have to engage that deadbolt from the outside. As a result, our lockouts are down to pretty much zero, but what’s more important than that is the fact that these deadbolts have two separate key ways in them.
Andrew Schultz: (15:21)
Essentially, you have one key that uses a KW one, which I guarantee you probably already have a key KW one on your key chain right now, and that’s gonna be the tenant’s key. That’s how the tenant is gonna get in and out of the unit whenever they want. And then you can also rotate the faceplate of the lock to reveal a second key, which uses a different quick set key that only you have as the landlord. And this gives you the ability to have master key access to your entire building while still allowing the tenants to have a completely separate key. Uh, the nice thing is that these locks do use the quickset smart home technology. They can be re-keyed in about 15 seconds with any KW. One key. I like these because we can have one master for each building while still having separate keys for each tenant and for our outside or our common doors, the price.
Andrew Schultz: (16:10)
Point’s also really nice on these, these run about 40 bucks a deadbolt, and you can pick up a passage knob for 10 or 15 bucks at any Home Depot or Lowe’s or wherever prior to switching over to the eight sixteens, the quick set, eight sixteens, we were using a master key system that was built out by landlord locks.com. That was kind of a neat system because it used interchangeable cores, uh, and a system made by Medi. Uh, I really liked that system as well because they used commercial-grade lock hardware, which felt really durable. It felt much, much more strong than a residential product of similar caliber. Like if you were to compare the quick sets to the, to the medical locks, there’s no comparison. It’s a totally different, uh, feel in terms of the finished quality. If you’re working in a large building with a lot of apartments or an apartment complex, something along those lines, this would be the route that I would go for.
Andrew Schultz: (17:02)
Something like that. Um, this system is much better suited to a larger building with multiple apartments or a complex or something like that. And you’ll understand why here in just a second, the couple concerns that we had with this system were that landlord locks basically controlled all of the keys and the cores. So we couldn’t just go to a local locksmith and get a core or get a key cut quickly. And I think if we were to do this again, if we were to do a master key system, we probably would’ve gone to a local locksmith and done this locally just to make our lives a little bit easier in rolling out the system. Alternatively, we could have just held some stock in our office from their website, which would’ve made it easier for us to do what we needed to do. The problem we found with that was that we, again, we master key each individual building, which is mostly duplexes tries and quads, and we don’t necessarily know where the next lock’s gonna go in that system.
Andrew Schultz: (17:53)
So we would be installing cores at random that didn’t fit the rest of that building’s master key system. Um, these were a bit more expensive than the quick sets as I recall, but it’s actually been several years since we’ve used landlord locks and I don’t really have a strong, uh, basis for comparison at this point, but they would be comparable to the quick set, eight sixteens, um, just with much, much more robust access control. So that would be the recommendation that I have for non-smart locking systems that you can use either, you know, in a single-family, a duplex, a try, a quad, and then anything up to thousands of doors. You can take those master key systems up to thousands of doors as you expand and never have to worry about carrying any more than just one master key on your key ring. Should you run a background check on the tenant’s spouse?
Andrew Schultz: (18:38)
The answer may surprise you check out our latest guide on rentprep.com/blog today. For more information that pretty much wraps up this episode of the Rent Prep for Landlord’s podcast. Thank you all so much for listening. We truly do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to real estate, and you can help us to reach our goal. If you heard anything in this week’s episode or any other episode that will help someone, you know, please do us a favor and share it with them. If you’re looking to get in contact with me, I can be reached over at whatsdrewupto.com from there, you’ll find links to everything going on with me over at Own Buffalo, as well as the other projects that we’re working on. Grab a free copy of our deal analysis tool today over at whatsdrewupto.com.
Andrew Schultz: (19:21)
There’s no obligation, and it comes with a companion video showing you how to analyze your real estate deals to make sure that you don’t buy a mistake. If you’re looking for top-tier tenant screening services, head on over to rentprep.com, there are multiple products to choose from including a tenant-paid option. If you’re over 50 doors, ask about enterprise-level programs and pricing. I’ve been an enterprise user of Rent Prep software for years now, and it’s definitely changed the way that we screen our tenants. Check that out today, over at rentprep.com. Again, thank you all so much for listening. We’ll be back in two weeks with an all-new episode you won’t wanna miss until then. I’m Andrew Schultz with ownbuffalo.com for rent prep.com and we’ll talk to you soon.
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