This article was posted on Wednesday, May 01, 2024
background check

The below article was written by Jonathan Kraut.  Jonathan directs a private investigations and tenant screening agency, is the CEO of a private security firm, is the CFO of an accredited acting conservatory, former college professor and dean, is a published author, and a community activist. His column reflects his own views and not necessarily those of AOA or of other organizations. 

Tenant screening is vital to keeping your tenants safe and minimizes your exposure to being sued or causing a loss of your wealth. 

Why You Should Screen

Multi-million-dollar awards to victims have been levied against landlords and property managers for placing sexual predators, violent criminals, and thieves in the same building as other tenants. A history of financial damage arising from unpaid rents, the destruction of property, and squatting are also key elements of past conduct that may be identified by thorough tenant screening. 

In other words, landlords and property managers are responsible for maintaining a safe environment for their tenants and have the power to minimize financial exposure resulting from screening out potential tenants who should not be trusted.

The expectation by the courts is that anytime a landlord or property manager allows a new renter into a building that is occupied by others, a proper background screening is to be conducted. 

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Especially if there are or could be children (under 18), the elderly (over 55), or anyone who is cognitively impaired in the building, the “Duty of Care” doctrine kicks in, meaning extra care to protect these vulnerable populations by ownership is to be considered. 

Landlords and property managers should at a minimum be evaluating records that provide five criteria:

  1. A history of evictions and unlawful detainer
  2. Credit histories and the ability to pay rent 
  3. Criminal convictions related to violent conduct such as abuse, assault, sexual crimes, and attempted murder
  4. Civil actions such as restraining orders, elder and child abuse, and domestic violence
  5. Convictions related to financial misconduct such as embezzlement, fraud, bad check writing, squatting, and identity theft.  

How Records Are Kept

Recognize that there are five categories of sites of criminal justice and civil records in the U.S. 

First, there are jail, incarceration, and arrest records that are maintained as separate data from County Court records. These reflect arrests and time in prison. While jail and incarceration do not always indicate someone’s guilt or innocence, they point to when and where a County case would be filed. In tenant screening, only convictions may be used to evaluate a potential tenant, but these records are a valuable tool in helping locate where convictions are recorded. 

These indexes, once frequently part of the instant and national search tools, have as of late diminished substantially as most jails have stopped sharing this data. 

Second, criminal records are maintained as separate indexes by local government jurisdictions. Municipal and Superior Court records are kept County by County. There are over 3,800 separate court indexes nationwide. With a few exceptions, court records are maintained apart from each other by a local jurisdiction. Many states, such as California, require an in-person computer search at the courthouse public terminal to locate current and accurate criminal and violent conduct records.

Without someone simultaneously inside each courthouse or on every court website in real-time, a national or instant search will be missing big chunks of vital information as it does not access actual court indexes but rather lists compiled possibly several years ago.  

Third, within the County or Superior Court level there is also a separate set of civil records. These are civil and family law indexes. Criminal records are but half the story. Civil filings include restraining orders, domestic violence, protective orders, stalking, elder abuse, and child abuse.  To my knowledge, no national and instant searches ever include civil misconduct histories.

Fourth, there are State records that include State prison indexes and Sex Offender registries. In some rare cases, State-by-state indexes may consolidate local records. Rather, to locate these state indexes in one unified database, each state must be searched separately and directly through each State government website. To my knowledge, no “national criminal search” or “instant search” accesses any state records in real-time. 

The final level is Federal. These include Federal incarceration data, FBI and terrorism watch lists, the 10 Most Wanted, etc.  There is no one site or repository containing all valuable Federal information. There are at least four separate Federal indexes that need to be searched by a live agent to properly locate relevant Federal records.

Why National Searches and Instant Searches are Losing Value

The bad news – the “national criminal search” and “instant search” options over time are becoming ever irrelevant. While in the past utilizing these methods offered some benefit, they are not meeting the requirement for a “proper background check.”  Let us review why this is. 

A “national criminal search” or “instant search” is like a phonebook of records from various government sources. In the past, counties and states made available to data brokers indexes of criminal records on a monthly, semi-annual basis, or annual basis. This data was purchased by data brokers who sell searches of these indexes as their “national criminal search” or an “instant search.” 

Although somewhat outdated and missing a significant number of counties who do not sell their indexes, I would estimate about 10 years ago these criminal databases were about 60-70% complete. At that time, this cheap, quick, but partially complete type of search was better than nothing. I estimate that this option has recently deteriorated from about 60-70% to less than 10% complete, as most counties have stopped selling their indexes. 

National and instant searches do not generally contain arrest warrants. They are entirely missing civil misconduct records, such as domestic violence, elder abuse, and child abuse. Also,any cases found in an instant database must still be verified directly with the court or government source directly if it is to be used to make decisions regarding tenant or employment screening. 

Bottom line – there is no instant button to access all records in all counties or include all five levels of valuable data. Plus, any results found create extra work and burden on landlords who must still vet the results with the courts and eliminate non-relevant data.

Fair Credit Report Act Requirements

Even if you locate records from a national or instant search, the landlord’s duties are not yet done. The Federal Fair Credit Reporting Act (1998 and often revised), regulates tenant screening, credit checks, and background checks. Every State has created a companion version of the FCRA.   

The FCRA requires the following: 

  1. Any record located through a database must still be confirmed directly with the court or originating government agency.
  2. An arrest record alone or dismissed charges may not be used to consider for tenancy.
  3. Misdemeanor convictions more than 7 years ago and some felonies may not be used to consider for tenancy.
  4. Some convictions not related to violent behavior or financial misconduct, such as being unlicensed driver or DUI, are not relevant to tenancy nor the safety of other residents, and thus should not be considered.
  5. When a negative finding is used to disqualify tenancy, a free copy of the report is to be offered to the applicant. 
  6. When a record is used to disqualify tenancy, the applicant must be provided an “Adverse Action Letter.” 
  7. When a record is used to disqualify tenancy, the applicant must be permitted 5 days to contest the finding and must be offered the information as to how to contest a record with the Credit Reporting Agency preparing the report. In this situation, a landlord or property manager can continue to take other applications.  

Devolving Public Access Policies

In addition to the continued deterioration of the “national criminal search” and “instant search” options, about two years ago, Sacramento County stopped offering date of birth verification related to those adjudicated as guilty of criminal acts. This makes it hard to verify who has a record if more than one person could have the same name. Sacramento County intentionally removed the date of birth verification portion at the court record search terminals to prevent the identification of convicts. This has made background checks in Sacramento County almost impossible to process for those with common names.

Now the same thing has just happened in Los Angeles County. In late February, the Los Angeles County Superior Court record terminals no longer allow you to input the date of birth to confirm the identity of a convicted criminal.  Those with common names with records can no longer be segregated from those with the same name but without records.

The reason for this is simple. Following the intent of the California Clean Slate Initiative enacted on 1 January 2023, policy is now shifting away from knowing the truth. Forgiveness for criminal acts, early release, and now hiding records, prevent allowing landlords and employers from knowing who was convicted of a crime. 

The “Fresh Start” Approach

Our politicians encourage and are embracing a “fresh start approach” as though forgiving past behavior will correct future conduct. However, this puts our landlords and property management firm and the tenants they rent to in peril.

I can understand that in some rare cases if given a chance, a person might be cured of selfish and criminal thinking. But statistics show that serial burglars, abusers, squatters, pedophiles, drug users, and sexual predators, for example, often have impulses and destructive habits that are, in the near future, incurable. Many of these folks should not be released from incarceration, no less living next door.

Having overseen over a million background checks over my 25 years as a private investigator, I never thought this day would come that public records would be withheld from the public. 

These changes in California Counties are expected to expand nationwide.  However, the duty of every employer, landlord, and property manager to keep those in their units or at their work safe remains unchanged.

Removing the date of birth from verifying who has a record now changes how to address screening. Those whose names are not found in indexes can be quickly cleared.  But in a growing number of counties, those who have common names can never be cleared without going to court to get a court order.  This means that, in practical terms, those who might be otherwise exonerated cannot be cleared. Our outrage will have minimal political impact. So how do we pivot from here?

What You Can Do Right Now

First, call the last two landlords and speak with them. Don’t waste time calling personal references- these folks will always say nice things about the rental candidate. Be aware that on average only one in seven criminal acts results in a conviction and that many tenant issues are not found in any court system. A short conversation with a past landlord may reveal what you didn’t know you needed to know.

If your phone calls go well, I recommend using the AOA option of the “Live Agent Search.”  

This search will enable you to be proactive and access a licensed investigations firm that will independently locate resident history, search the 10 plus relevant court and government sites in real time, eliminate non-reportable information, prepare a formal report, and prepare an Adverse Action Letter if needed. Only a “live search,” meaning an investigator or their agent reviewing real-time data indexes and court information, will help overcome the flaws of national criminal and instant searches.  

Acknowledge that proper background screening may take from one hour to two days and often requires an in-person visit by an agent at the court or by gathering and processing private, arrest, and other non-court information.

If you do searches yourself, keep in mind that any information identified must be reviewed and disclosed as per the Fair Credit Report criteria provided above. 

Finally, focus on utilizing a comprehensive approach to gathering data but ignore non-relevant history. Keep in mind that some information does not apply to tenant screening unless it pertains to the ability to pay rent, evictions, violent behavior, or financial misconduct.   

California for example allows for application fees up to $62.02. What our family does with our units is require a $45 rental application fee. We tell our applicants that we always use a licensed investigations firm to conduct a thorough evaluation and this cost is initially borne by the applicant. However, when we disclose to our applicants that we will apply a credit of this fee towards the first month’s rent if the applicant is approved, we find no resistance. 

Charging this nominal fee helps screen out some of those who fear their negative conduct will be exposed and those who are not committed to renting.  Nevertheless, we identify serious concerns in about one in ten applicants.  

Hope is on the Horizon

The good news is that AOA has undertaken the ambitious development of new approaches to tenant and background screening. Their innovations and member-friendly tools will help better address these new obstacles that have hindered quick and accurate tenant screening. 

Please check your email, read the AOA magazine, and look for podcasts with news about an improved and cost-effective remedy to these changes in public policy and addressing the diminishing value of national and instant search options.

In the meantime, please be safe, keep your tenants safe, and look for news about the new ways that AOA is going to offer to support your interests and needs.