The lowdown on tenant databases
Most landlords would have heard of a tenant database. But how much do they actually know about them? What information do they store? Who can access them? When can a tenant be listed?
A tenant database is typically run by a private company and contains details about the problems landlords and property managers have had with tenants. This information is made available to property managers, and licensed agents for a fee, who use the information to assess risk by checking whether an applicant has an unfavourable rental history.
A tenant can only be listed on a database under certain circumstances. Normally it is for a serious breach that has resulted in a lease being terminated, such as unpaid rent, intentional damage or a failure to make payments directed by a court. Generally, the amount of money owed to the landlord has to be greater than than the bond amount recouped.
There are strict rules with regard to submitting any person’s name to a tenant database, mostly around providing full disclosure.
It is also important that, before even signing a lease, applicants are informed that a breach of the lease agreement may result in a listing on a tenant database, normally done on the application form. Please note that the legislation surrounding tenancy databases varies from state to state. Therefore the terms of their use and how informationis recorded needs to be within the guidelines and legislation of that state.
As property managers, we use these databases as part of the process in screening prospective tenants. Whist a very useful source of information, tenancy databases contain limited data and therefore do not replace vigilant reference checking and other criteria in reviewing a tenant’s application.