Are landlords allowed to run background checks on tenants?

Tenant Screening and Background Checks for Landlords in Illinois

As a landlord in Illinois, conducting thorough tenant screening is a critical step to ensure you select responsible and reliable renters for your rental properties. One important aspect of tenant screening is running background checks on prospective tenants. This process allows landlords to evaluate the applicant’s rental history, criminal background, and creditworthiness, helping to mitigate the risks associated with leasing.

This guide provides a detailed overview of Illinois laws and best practices related to background checks for tenant screening.

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Are Illinois Landlords Allowed to Run Background Checks?

Yes, landlords in Illinois are permitted to run background checks on prospective tenants. Background screening is a common and lawful practice that helps landlords assess the suitability of an applicant. However, there are specific legal requirements and limitations that landlords must follow to remain compliant with state and federal laws.

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Legal Framework Governing Background Checks in Illinois

Fair Credit Reporting Act (FCRA)

Illinois landlords who obtain background reports from third-party consumer reporting agencies must comply with the federal Fair Credit Reporting Act (FCRA). The FCRA sets standards for:

• Disclosing to the applicant that a background check will be performed.
• Obtaining the tenant’s written consent before requesting a consumer report.
• Providing adverse action notices if the landlord denies tenancy based on the report.

Illinois Identification Error Resolution Act (765 ILCS 335/)

This Illinois statute provides applicants protections related to their personal information used in background checks, particularly with respect to errors and inaccuracies.

Illinois Human Rights Act (775 ILCS 5/)

Landlords must be careful not to discriminate against tenants on protected bases such as race, color, religion, sex, national origin, marital status, sexual orientation, age, or disability, including during tenant screening.

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What Background Checks Can Illinois Landlords Run?

Illinois landlords can lawfully perform several types of background checks, provided they follow proper procedures:

• Criminal Background Check:

Reviewing the applicant’s criminal history can reveal felony convictions or recent misdemeanor activity. Under Illinois law, landlords cannot consider arrests or charges that did not result in convictions. Additionally, certain convictions may not be relevant or legally permissible grounds for denial.

• Credit Report:

Checking an applicant’s credit history helps determine financial responsibility and ability to pay rent. Landlords generally look at credit scores, outstanding debts, payment history, and bankruptcy records.

• Eviction History:

Reviewing past eviction filings or orders helps landlords identify tenants with a history of lease violations or nonpayment.

• Employment and Income Verification:

While not part of a formal background check, verifying income and employment status is essential for evaluating tenancy suitability.

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Procedures for Running Background Checks in Illinois

Written Disclosure and Consent

Before conducting a background check through a consumer reporting agency, Illinois landlords must:

• Provide the applicant a clear written disclosure that a background check will be requested.
• Obtain the applicant’s written authorization for the background screening.

Failure to do so could result in legal liability under the FCRA and Illinois laws.

Adverse Action Notice

If a background check leads the landlord to deny the tenant’s application, Illinois law requires the landlord to provide an adverse action notice within a reasonable timeframe. This notice must include:

• The contact information of the consumer reporting agency.
• A statement that the applicant can obtain a copy of the report.
• A statement of the applicant’s right to dispute inaccurate information.

Illinois Consumer Reporting Agencies Act (ICRAA)

Illinois also enforces the ICRAA, which includes additional consumer protections beyond the FCRA, particularly regarding the accuracy and use of consumer information.

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Considerations Regarding Criminal Background Checks

Illinois has specific rules regarding the use of criminal records in tenant screening:

• Ban the Box for Housing:

While Illinois does not have a statewide “ban the box” law that prohibits landlords from asking about criminal convictions on rental applications, certain local jurisdictions may have restrictions.

• Relevance and Time Limits:

Illinois courts have held that landlords should only consider criminal convictions reasonably related to tenancy and that are not too remote in time.

• Human Rights Act Protections:

Landlords must avoid policies or practices that disproportionately exclude applicants from protected classes based on criminal history unless justified by business necessity.

Landlords should evaluate criminal records carefully, considering the nature of the conviction and its relevance to rental responsibilities.

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Best Practices for Illinois Landlords Conducting Background Checks

To maintain compliance and protect against legal risks, Illinois landlords are advised to:

• Use reputable and FCRA-compliant consumer reporting agencies.
• Secure written authorization from applicants before screening.
• Provide clear disclosures about background checks.
• Review background information objectively and fairly.
• Inform applicants promptly if adverse action is taken based on a report.
• Respect applicant privacy and data security throughout the screening process.
• Keep detailed records of disclosures, authorizations, and decisions made.

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Fees and Costs

Under Illinois law, landlords may charge applicants a screening fee to cover the costs associated with running background checks. However, the fee must be reasonable and disclosed upfront. Landlords should be transparent about these fees in rental advertisements or applications to avoid disputes.

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Summary

• Illinois landlords are allowed to run background checks on prospective tenants, including criminal, credit, and eviction history.
• Compliance with the Fair Credit Reporting Act (FCRA) and Illinois laws requires written disclosure and consent prior to the check.
• Landlords must provide an adverse action notice if denying tenancy due to a background report.
• Use of criminal records must be non-discriminatory and relevant to tenancy.
• Charging a reasonable screening fee is allowed, provided it is clearly disclosed.

By carefully following these legal requirements and best practices, Illinois landlords can effectively use background checks to screen tenants while minimizing legal risk and fostering fair housing compliance.

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If you are managing rental properties in Illinois, integrating proper background screening policies will enhance your tenant selection process and protect your investment over the long term.