Need to Know!

Use of Eviction Filings for Tenant Screening – A Growing Dilemma

November 24, 2014 7:33 pm

Eviction records search results are an important part of the tenant screening process – since they are “generally” triggered by the tenant’s failure to fulfill the terms of their rental agreement.

Failure to pay rent (or pay rent on time) is perhaps the most common reason for an eviction filing.  But violating other
provision of the lease may result in an eviction as well.

The majority of evictions are settled (dismissed) by the plaintiff (landlord), however, when the defendant (resident) pays or moves out – since the cost (in time and treasure) associated with pursuing the case to judgment is high and the odds of recovery is low.  But here is the rub.  The court record tells us that a filing was dismissed – but not why it was dismissed.   It is possible, therefore, that the case was thrown out by the judge  due to lack of merit or a failure to perform on the part of the landlord.

Hundtofte v. Encarnacion, filed in Superior Court in the State of Washington, is a case in point.  Hundtofte (the landlord) filed an eviction action against Encarnacion so that he might re-develop the property.  The problem is that Encarnacion had a valid lease and was fulfilling the terms of that lease.  Ultimately, the case was settled and the lawsuit dismissed.  And… of course… everyone lived happily ever after.  Well… not exactly!

The Encarnacion’s began their search for new housing – armed with a positive reference from Hundtofte.  They found a rental home they liked, applied and were screened.  The tenant screening report included the Hundtofte eviction filing (which lacked merit and was dismissed) and their application was denied.  There is more to the Encarnacion saga.  See
Tenant Screening – Efforts to Limit Public Access to Eviction Records.

The question here is do we rely upon filings alone (dismissed cases) to deny tenancy – versus the alternative – which is to use those filings to inform rental verifications.  We favor the latter, for several reasons.  First, the purpose of the tenant screening process is to find and approve good tenants.  While we’ve established that the majority of filings are valid – some are not.  The tenant screening process ought to distinguish between the two.

Secondly, odds are that use of eviction filings has a disparate impact on some protected groups and may form the basis of a fair housing claim.  Business necessity is the only defense against such claims.  But it is hard to argue business necessity without knowing the facts and since there is an alternative that, arguably, returns a superior result – rental verifications.

Finally, we are seeing efforts (at times successful) to limit access to (or reporting of) public records data.  California courts must wait 60 days to post eviction data to the public record – and only post judgments in favor of the landlord.  One might question the value of a California eviction records search, since civil record judgments are also included in the credit report.

A lack of access to eviction filings combined with a failure to perform rental verifications as part of the tenant screening process is like flying an airplane under instrument conditions – without instruments.  Seriously, you haven’t a clue as to what hazards await.  Basing decisions on eviction filings alone raises questions of fairness and may result in denial of a perfectly well qualified applicant or a disparate impact discrimination claim.

The answer involves additional effort – on your part or that of your tenant screening company – and is quite simple.  The answer is… rental verifications.  Do them – do them yourself or outsource them to your tenant screening company.  Just do them! Include undisclosed addresses that appear on the credit report or may be associated with an eviction filing.  See previous post –
Rental References – More Important Than Ever!

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