Are landlords allowed to run background checks on tenants?

Tenant Screening and Background Checks for Landlords in Delaware

As a landlord in Delaware, conducting thorough tenant screening is a critical part of managing rental properties effectively. One of the key components of tenant screening is running background checks, which can help landlords assess the suitability of potential tenants and reduce risks associated with renting.

This guide outlines the important considerations Delaware landlords need to know about running background checks on tenants, including legal requirements, permissible practices, and best practices for ensuring compliance.

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Are Delaware Landlords Allowed to Run Background Checks on Tenants?

Yes. In Delaware, landlords have the right to run background checks on prospective tenants as part of the tenant screening process. This includes obtaining information related to the applicant’s:

• Criminal history
• Credit history
• Eviction records
• Employment verification
• Rental history

Running these checks enables landlords to make informed decisions and helps ensure the safety, security, and financial reliability of tenants.

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Key Legal Considerations for Background Checks in Delaware

When conducting background checks on tenant applicants, Delaware landlords must comply with both federal and state laws governing fair treatment of applicants and disclosure requirements.

Compliance with Federal Laws

• Fair Credit Reporting Act (FCRA): Delaware landlords must comply with the FCRA when using consumer reporting agencies (CRAs) to obtain background or credit reports. This law requires that landlords:

- Obtain the tenant’s written consent prior to accessing their background or credit report. - Provide a clear disclosure form separate from the rental application. - If the landlord chooses to deny tenancy based on information in the report, they must provide a pre-adverse action notice along with a copy of the report. - After final denial, an adverse action notice must be sent to the applicant, including information about the CRA and their right to dispute inaccurate information.

Delaware State Laws

• Delaware does not have additional state-specific restrictions or prohibitions on running tenant background checks. However, Delaware landlords should be mindful of the following:

- Non-Discrimination: Delaware landlords must adhere to fair housing laws under both federal and state statutes, which prohibit discrimination based on protected classes such as race, color, national origin, sex, religion, familial status, disability, age, marital status, sexual orientation, gender identity, and source of income. - Privacy Considerations: While Delaware does not have a tenant privacy law beyond federal provisions, landlords should maintain strict confidentiality and handle tenant information sensitively.

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Permissible Types of Background Checks

Delaware landlords can utilize several types of background checks to assess prospective tenants:

1. Criminal Background Check

• Provides information on past arrests, convictions, and ongoing criminal cases.
• Can help landlords evaluate potential risks to property and other tenants.
• Should be used judiciously to avoid discrimination against applicants with a criminal record unless there is a legitimate business reason.

2. Credit Check

• Reveals financial reliability including credit score, outstanding debts, payment history, and bankruptcies.
• Helps landlords determine the tenant’s ability to pay rent consistently.

3. Rental History Verification

• Confirms previous landlord references and checks for any prior evictions or lease violations.
• Offers insight into the tenant’s rental behavior and responsibility.

4. Employment Verification

• Ensures that the tenant has a steady source of income sufficient to cover rent.
• Typically involves contacting employers to verify income and employment status.

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Best Practices for Running Background Checks in Delaware

To ensure compliance and fairness, Delaware landlords should follow these best practices when screening tenants:

Obtain Written Consent

• Always get written authorization from the prospective tenant before ordering any background or credit check.
• Use a separate disclosure form that clearly explains the purpose of the check.

Use a Reputable Screening Company

• Partner with a consumer reporting agency or tenant screening service that complies with FCRA.
• Make sure the agency provides accurate and up-to-date information.

Apply Screening Criteria Consistently

• Develop and apply fair tenant screening standards equally to all applicants.
• Avoid criteria that could lead to discriminatory practices.

Provide Proper Notices and Documentation

• If adverse action results, provide the required FCRA notices within the appropriate timeframes.
• Keep copies of all disclosures, consents, reports, and correspondence.

Handle Tenant Information Securely

• Store background information in secure locations.
• Limit disclosure only to persons necessary for the rental decision.

Consider the Nature and Recency of Negative Information

• Balance rejection decisions against how recent or relevant a criminal record or financial issue is.
• Consider individual circumstances and potential rehabilitation.

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Conclusion

In Delaware, landlords are authorized to run background checks on prospective tenants as a key part of the tenant screening process. However, these checks must be conducted in accordance with federal laws like the Fair Credit Reporting Act and Delaware’s fair housing rules. By obtaining proper consent, using reputable screening services, and applying policies consistently, Delaware landlords can protect their properties and tenants while maintaining legal compliance.

Effective tenant screening through background checks remains an essential practice for Delaware landlords aiming to build successful and trouble-free landlord-tenant relationships.