Podcast 79: What to Do When a Tenant Applicant's Last Address Was in a Foreign Country

Frequently, people from other countries choose to live in the United States and need rental housing. However, many landlords are not comfortable in renting to applicants without a thorough background check and an international applicant may present additional challenges. In this episode of Night School, we’ll check out what landlords can do to get a complete and accurate background check on applicants with international ties.

Transcription: When a Tenant Applicant’s Last Address Was in a Foreign Country

Jeff: Welcome to Landlord University night school. I’m Jeff Pearson and I’m here with my co-host Stephen White. How are you doing this evening Stephen?
Stephen: Pretty good, Jeff. I’ve got another topic here that came straight out of the RentPrep vault if you would, the RentPrep office. We deal with a lot of landlords that call in. I’ve been seeing a lot of reviews online, a lot of good reviews about the podcast by the way.
Jeff: That’s always great to hear.
Stephen: Yeah definitely. I see a lot of reviews online that people say, “We like RentPrep because we can call and talk to somebody.” That seems to be a snowballing effect, and we get a lot of landlords calling in. Of course we love it. It always gives us great content and great information and a great idea of what’s happening all over the place with different landlords and different things that they’re coming up against. One of the things that we hear about a lot of tines in dealing with backgrounds checks and screening tenants is what do you do. In this case it was a specific landlord that had called and said, “Hey I got an applicant who is moving here from Brazil and not really sure what to do. I don’t know if they’re going to have a credit report. They obviously don’t have a Social Security number. I don’t really know what to do on the criminal background. They haven’t lived here in the U.S., so what good does a nationwide criminal search do for me?” A lot of very good questions, a lot of valid questions, and again it’s something that we deal with pretty regularly here.
Jeff: I think it’s a pretty simple answer. You have to go to Brazil.
Stephen: You do. Well, yeah, pretty much.
Jeff: Oh darn, I have to go to Brazil.
Stephen: Right, right, yeah. Well, you’ve got a couple of different options on it. It really depends on the situation. I’ll give you the situation from two different scenarios. The first scenario will be the actual real life scenario of this landlord’s situation which was the guy was living in Brazil still and coming to the U.S. So he had no U.S. addresses, no U.S. existence whatsoever at this point. At that point your only option is to run a background check in Brazil – go to Brazil as you said.
Jeff: Right.
Stephen: The problem is you can get background checks in other countries. You can do a criminal background check, and most countries will allow you to do some sort of credit report. The problem is every country deals with this situation differently and they charge what’s called a “country access fee”. Every country is different. It’s an access fee that you pay no matter who you are. You could be Jeff Pearson landlord and contact Brazil, and they’re going to tell you the charge is, let me see, in this case for a personal credit report $135. That’s your charge. We go and do the same thing. We pay the exact same thing because it’s that country that determines what that fee is. Not only do you have to deal with that, the access fees, on top of that you have to deal with the turnaround time. They’re in no hurry to get this information to you.
Jeff: No.
Stephen: No. In Brazil, again I’m giving Brazil as a specific question. I’ve got our data provider up that has a direct connection with Brazil and obtaining these reports. According to Brazil the turnaround time on a personal credit report is 8 to 11 days. Again, not something that landlords are typically used to. We get landlords who complain that a one hour turnaround time sometimes isn’t quick enough, so 8 to 10 or 8 to 11 days is a long, long stretch there to wait. Again, it’s out of anyone’s control. The country ultimately is the one who is setting the different parameters and whatever the policies are going to be. Nothing anybody can do to fight it. You’re just sort of at their mercy.
Another sort of nuance with dealing with international background checks is a lot of times they may ask you for very specific questions and sometimes bizarre questions. In the U.S. in our country or culture even, a lot of times we’re used to identifying people by their mother’s maiden name. A lot of times you ask for banking and things like that or for security purposes you’re asked to give your mother’s maiden name. In a lot of other countries we’re asked to get the father’s name and the father’s father’s name. Yeah, real interesting that that’s sort of their version of the mother’s maiden name. They’re looking at the father’s name. Some countries require a very specific release be signed. It’s nothing that a landlord could ever come up with or do on their own. Your lease or your release or consent to provide information is useless basically. The country wants their own in their language, their words. So we’ll obtain a copy of that that needs to be signed. The landlord then has to get the applicant to sign it and give it back. Right away I’m sure you noticed, Jeff, the first obvious disadvantage is you’ve got to jump through a ton more hoops in these cases.
Jeff: Yes you do.
Stephen: It’s a lot more money in these cases. We get a lot of landlords that ask, “Can I deny them just based on the fact that this is really a pain in the neck?” If you have two people applying and one guy lives down the street and the other one is from Brazil, and it’s going to cost you $30 to screen the guy down the street and it’s going to cost you closer to $300 to screen the guy in Brazil, can you deny them just based on that alone?
Jeff: Yeah, that would be my thought.
Stephen: You can if your screening criteria calls for it in other words. If you’re charging them their screening fee and they don’t want to pay the high screening fee, that would be a reason to disqualify them. They’ve disqualified themselves. They’re not willing to pay the screening fee in this case. Again, check with your state to make sure that there’s no cap limits on what the screening fee is. California is one of those states that has cap limits. It’s in the $40-something range in California right now. But other states specify and say you can’t charge anything more than the cost of the screening. If the cost of the screening is $300 then you’re legally allowed to pass that on to them and say, “This is what it costs.” That’s one way of doing it if they’re not willing to pay the screening fee.
Also if you’re looking for a faster turnaround time, obviously the turnaround time may have a hindrance there, and dealing with the additional information. Sometimes things get lost in transfer. Applicants either get discouraged or find something new in the meantime or look for that path of least resistance. Maybe they’re going to find a landlord that is not going to make them sign that additional consent form specific to their country or not charge them $300 to do a screening or whatever. They may end up going somewhere else once they realize that it’s too much of a hassle. Again, you just…We’re always talking about the discrimination and be careful if you are discriminating. If they don’t fall in your screening criteria or disqualify themselves based on your screening criteria, that’s one thing. It’s another thing to flat out say, “I do not accept people from Brazil” or foreigners or any type of class of people or anything like that. That would be the lesson learned there.
Jeff: Yeah. That again goes back to establishing your criteria for the qualifications for renting your property.
Stephen: Yeah, and if they don’t fall very black and white into that then again that may have disqualified them before you even have to do a background check. The other situation, remember I was telling you the actual situation, but another thing that we run into a lot of times is they were from Brazil a year ago or two years ago. They’re here on work or whatever the reason is. So, they’ve been in the country, the U.S., for a year or a number of years, whatever the situation is. But they’re not coming straight from Brazil. They have a U.S. address. Even if they do not have a Social Security number yet or they’re not going to be getting one, we can still do the background check based on their known existence in the database and especially if we have an address or something else to go on. Criminal records are not housed by Social Security number, so you don’t even need a Social Security number to look for that. The landlords who are looking to do their due diligence, even if you’re dealing with somebody that maybe was from Brazil even in the kind of recent past, you could still do a U.S. based search on them if they have a U.S. address and they’ve been here for any amount of time. We can search just to make sure that they don’t have anything going on here, they’re not getting evicted, they’re not getting arrested, those types of things. You can still do a U.S. based search on those folks.
Jeff: That’s good to know.
Stephen: So there you go. If they’re coming from a different country, especially if you’re in an area that you’re dealing with it a lot, that usually seems to be how it goes. If you’re in a college area where you’ve got a lot of international students or in an area that just hires out and they’ve got a lot of international people coming in, as a landlord you’re probably going to deal with it so be prepared. Make sure that if you’re doing the background checks make sure your background check company has the ability to do international searches if need be. Again like we just said, set your criteria, your screening criteria so that if you do deny somebody there’s no question that it’s not a discrimination issue.
Jeff: That’s good information. Thank you very much, Stephen, and I look forward to talking with you tomorrow evening.
Stephen: All right, thanks Jeff.