The blog of real estate
May 6th, 2015
Collecting information through an inquiry
If you own an income generating building, it is absolutely necessary, or at least advisable that you carry out an inquiry on the people who want to live in one of your buildings. In light of the National Housing Act and the resulting occasionally lengthy procedures, it has almost become an obligation for homeowners to gather information about the people who want to live in their homes.
A pre-rental inquiry or verification is generally used as a preventive measure. It contributes to the risk assessment and selection of potential tenants to ensure that they can meet the financial obligations related to the lease.
The process involves confirming and verifying information contained in a lease application. Legal and credit history may also be part of this verification. This inquiry is recommended for all owners or managers of income generation buildings prior to the signing of a lease.
Checking the decisions archive of Quebec
It is possible for you to go and read the decision of Quebec Housing Authority. Did you know that this information is available online? Visit www.jugements.qc.ca EASY! I typed the name and first name of the candidate; if there is a ruling against him or her, it will appear in less than 10 seconds. I would recommend that you always do this check before renting.
Prevention is better than cure
In the event of a rejection of a candidate (or candidates), notify them that you are not satisfied with the pre-rental inquiry and that you are terminating the process. When possible, consult with colleagues who have several apartments. Their advice is very clear: “better safe than sorry”. It will be difficult for you to get rid of a tenant later because of noise and shouting or failure to comply with regulations. You therefore risk losing your current good tenants.
Lesson to be learned: always carry out a pre-rental inquiry.
Before renting out a house, check the solvency of the candidates!
How do you choose your future tenants? It’s simple: give the task of checking their solvency to a specialised company. For your property to be profitable, you need good tenants. It is not always easy to properly assess the financial situation of candidates who come to your offices to rent a home.
Reduce the risk of renting out to a future tenant who has already been convicted by the Quebec Housing Authority by delegating this heavy responsibility. Check the tenants with the Housing authority for past convictions, rent fixing, and withdrawals. This method proves to be effective and has few charges.
- Credit report;
- Checking in our internal database of bad payers;
- Checking with the Quebec Housing Authority;
- Verifying the references and job of the concerned.
Before renting out an apartment
The worst surprise a landlord can have is to notice that a tenant has stopped paying his or her rent. Before renting out an apartment, it is important to do a credit check. You can thus avoid unpleasant surprises by checking the identity of the potential tenant, verifying their job and taking a look at their credit accounts.
Time is your ally when you rent out an apartment. It is better to take your time and give a lease to the right person by verifying all his or her references than to have problems later.
The identity of the potential tenant
The credit check makes it possible to certify that the identity provided by the potential tenant is indeed the correct one. The latter must at least provide his or her full name and date of birth. Credit bureaus will then be able to match their results to your information. It is very important to ask the potential tenant for a photo ID in order to cross-check their information.
The credit check helps to check if the person is working and if so, where. However, many employers do not disclose this information to the various credit bureaus. The best way is to call the employer directly and ask for references on the potential tenant. It only takes five minutes and it makes it possible to for you to verify the profession of the person.
The credit check reveals whether the person who is being investigated has late payments or outstanding accounts. If the person frequently settles their accounts late, they are likely to pay their rent late. If the record indicates that the person has been contacted by debt collection agencies, he may not pay his rent and will appear before a Housing authority judge. The credit check helps to determine the tenant’s payment habits.
How to choose the right tenant
Whether you own an income generating building in Sherbrooke or want to find a tenant for your property that is taking time to sell, you must have a structured verification strategy. Quebec is one of the only places where the security deposit is illegal. So you have to use every possible means to verify your choice.
Questions to ask when the candidate stops by
Here is a list of questions you can ask:
- How many people will live with you and what are their names?
- Do you have any pets?
- Do you smoke?
- Can you give me a written permission to check your credit?
However, an owner cannot ask questions or for information that violate the person’s rights such as the following:
- Do you have children or will have other children?
- What is your ethnic origin, religion or sexual orientation?
- Will your family often pay you a visit?
- What is your social insurance number? If you don’t give it to me, I won’t rent you the apartment.
- Are you married, single or divorced?
Following this interview which takes place during the candidate’s visit, the most obvious option to reduce costs is to use a pre-rental inquiry service which will carry out the following research:
- Visa, MasterCard, and other sources of credit,
- Legal verification (criminal record);
- Bank account checks;
- References of previous owners;
- Employment references;
- Suggestions for other protective measures such as a deposit, employment security letter…
If you are a member of the “Corporation des propriétaires immobiliers du Québec” (CORPIQ), you will benefit from a verification service known as “Proprio Enquête”. We also have the company Oligny & Thibodeau, which carries out this kind of inquiries.
In a nutshell
Before renting out an apartment, you have to do a credit check. This will save you time and money. The credit check helps to verify the identity of the potential tenant, his profession, and credit history.