In July 2023, the Federal Trade Commission (FTC) released important guidance for landlords, property managers, and other housing providers who utilize tenant background checks for making housing decisions. Landlords often require a deeper understanding of their applicants than employers do, requiring in-depth background checks. This guidance aims to ensure clarity and compliance.
It also seeks to clarify adverse actions, and when tenants should be notified of them. The FTC appears to be concerned that tenants are not always receiving the notices they are entitled to by law.
Understanding Tenant Background Checks
When landlords evaluate housing applications or decide on lease renewals, they often use tenant background checks. Such checks can reveal information ranging from rental and eviction history to credit records and criminal backgrounds.
These background checks are, in essence, consumer reports. When landlords use these reports for decision-making, they must adhere to the Fair Credit Reporting Act (FCRA), which the FTC oversees.
Essentials of the Fair Credit Reporting Act
What is a Consumer Report?
Consumer Reporting Agencies (CRAs) compile […]