Need to Know!

WA State Accepts Reusable (Portable) Tenant Screening Reports

April 5, 2016 2:24 pm

Welcome to Washington road sign illustration with distressed ominous backgroundThe Washington State legislature has taken another small but meaningful step to encourage greater transparency in consumer reporting, and to reduce the burden associated with multiple screening fees borne primarily by low income individuals and families.

It was only a few years ago that landlord interests and advocates came together to pass the Fair Tenant Screening Act – modifying RCW 59.18.257 to require (among other things) that landlords notify prospective tenants of what information will be accessed and what factors will result in denial of an application.

Senate Bill 6413, passed unanimously by both chambers and signed by Governor Inslee, is impressive if for no other reason than it is the second time in the last few years when landlords and advocates actually came together (compromised) to make progress on this issue.

What exactly is Senate Bill 6413?

  • Requires landlords to say up front whether they accept  a comprehensive reusable (aka portable) tenant screening report – which is clearly defined in the bill.
  • Extends by seven days (to 21 days) the time landlords have to return deposits.
  • Adds a new section to the Residential Landlord Tenant Act (RCW 59.18.280) – that empowers judges to limit dissemination of unlawful detainer actions if:
    • The plaintiff’s case is sufficiently without merit in fact or in law;
    • The tenancy was reinstated; or
    • Other good cause exists for limiting dissemination of the unlawful detainer action.

Why the sudden spirit of cooperation?  There is something in it for everyone!  If I’m not mistaken, that is how politics is supposed to work. You see…

Landlords win because the bill falls short of a mandate – a requirement that they accept comprehensive re-usable tenant screening reports.  Landlords also win because the bill extends by seven days (to 21 days) the time they have to complete the move-out process and return deposits.

Advocates supported the bill because, going forward, those they represent will know up front whether or not  prospective landlords accept high-quality reusable (portable) tenant screening reports – and whether it makes sense for them to buy such a report.  Advocates have long argued for limits on access to (reporting of) eviction data.  SB 6413 does that – by granting the courts the authority to do so should the action unfairly prejudice the resident.

In practice, the tenant screening provision will apply gentle pressure on landlords to say they accept portable tenant screening reports.  Saying “no” to prospective residents is not great from a marketing standpoint. Plus there is rather little down-side to saying “yes”.  How so:

  1. First of all, there is – as far as we know – only one product that meets the definition of a comprehensive reusable tenant screening report and that is®.  So the odds of actually encountering such a product in the immediate future are relatively small.
  2. Secondly, the traditional approach works well for 80-85% of applicants who are approved or approved conditionally.  The majority of these folks know up front whether they qualify or not and favor the path that is quickest and easiest.

To accept or not accept “comprehensive reusable tenant screening reports,” that is the question?  The answer is… it is entirely up to you and, short term, of limited consequence either way.  Know this:

  1. It is not a fair housing issue – as long as the option is available to all applicants.
  2. The odds of encountering a comprehensive reusable report are relatively low.  Control is not an issue, therefore, since responsibility for processing these reports can be limited to a trusted few.
  3. A willingness to accept these reports may return a modest marketing benefit – particularly among independent rental owners and in that segment of the market that caters to low income applicants.

Bottom Line

Effective June 9, 2016, landlords are required to state whether they will accept comprehensive reusable tenant screening reports.  Those properties that maintain web sites, must also do so on the home page of the property web sites.

Whether or not landlords accept reusable report will have little impact on most – at least short term.

Those who do accept comprehensive reusable reports (as defined by the Washington legislature) can rest easy with regard to product quality – given the definition outlined in statute.  These are very thorough and accurate reports.

Final Thoughts

Comprehensive reusable tenant screening reports are an excellent risk management tool.  The applicant sees their report and can dispute anything they believe is reported in error – before it impacts them.

Applicant initiated consumer reporting will play a greater role going forward – given the inherent transparency.  It may not be fair, but the market is increasingly suspicious of the consumer reporting industry.

Greater transparency will quickly identify those who are not playing by the rules – those who deliver poor quality products or fail to provide an efficient mechanism for handling of disputes – and hold them accountable.  Accountability is good!

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