Employer Refuses Verification of Employment What Landlords Should Do Next.
When you decide to run a background check on a potential tenant, it’s always a good idea to obtain verification of his or her employment. In some instances, the employer refuses to verify employment due to their company policy.

Example: Employer refuses to verify employment

This happens quite a lot when calling employers for verification of employment. Sometimes the conversations go something like this:
Landlord: “John Smith filled out a rental application to rent my apartment. I need to verify his employment as part of my tenant screening process.”
Employer: Sorry, but I can’t give you any information.”
Landlord: “Well can you point me in the right direction?”
Employer: “No, I’m sorry.”
Other times they will try to charge you a fee of $15-20 and won’t release any information until that is paid.
So what should you do if this happens?

Take Employment Verification into Your Own Hands

If an employer is being uncooperative or they just downright don’t have the answer to what you’re looking for, it’s a good idea to verify your applicant’s employment on your own.

Have Your Tenant Provide Proof of Income

When trying to verify your rental applicant’s employment yourself, it’s a good idea to ask the applicant for the following documents:

  • A copy of their pay stubs (ask for multiple pay stubs for income verification purposes)
  • A copy of an Earning Statement

If they supply you with this information, be sure to look at it carefully and never assume it’s always 100% factual. Look closely to be sure they didn’t use Adobe Photoshop and that it looks authentic.
Believe it or not, tenants lie on rental applications from time to time.
It is also up to you to spot the differences between what the pay stub tells you, and what the applicant has told you. You are no longer relying on the answers of the supervisor or Human Resource Manager. The easiest thing to notice is the number of hours worked. If they say they work full-time, yet are only being paid for 15 hours of work a week, there’s a good chance they are lying to you.

Ask for Bank Statements

When all else fails, you can never go wrong by asking for bank statements. This will obviously depend on the market and whether the property will attract the type of people ready and willing to share this information.
However, regardless of your market, you should never accept this answer: “I don’t have a bank account”.
This is a huge warning sign!
Why? Because everyone has a bank account. Besides, if they don’t how will they pay their rent every month?

Conclusion

Having the bank account information is super helpful, especially if the tenant stops paying you.
Once you receive a judgment for the money they owe you, freezing accounts and garnishments will be that much easier.

2 Comments

  1. My tenant breached the terms of our 1 year lease agreement which was badly prepared by the estate agent who sourced the tenant and we jointly agreed to let the lease expire naturally on the expiry date. A completely new lease was prepared by a lawyer which accurately reflected what was needed by both parties. Therefore the first lease was not renewed or extended. The estate agent claims that the lease he prepared was renewed and therefore he is entitled to receive renewal commission.
    What is your view?

    • James, I hate seeing situations like this because as cut and dry as it may seem, the estate agent may have a case if their agreement with you had terms concerning the renewal. Like any contract or agreement, if the terms or language is broad and non-specific it will certainly cover more ground. For example if the agreement says “upon renewal” and not “upon renewal of this agreement” the agent could claim that his commissions are based on the life-cycle of the tenant and not relative to the actual agreement that is signed. So in other words, regardless of who provided the agreement, his part was to provide a tenant and his commissions are due so long as that tenant continues to lease from you.
      At this point my best advice would be to get the opinion of the attorney who prepared your current agreement and have him review the estate agent’s terms and agreement to see what your obligations are. The fee you pay the attorney might save you money for paying commissions if this turns out to be a long-term tenant. Your story inspired this recent blog article Paying Commissions to a Real Estate Agent for Tenants Thanks for the share and let us all know how it turns out.

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