Everyone knows the drill, you take a rental application and you call the previous landlords to see what this person was like as a renter.  Surprisingly, despite the number of tenants I go through in a year, I rarely get those calls.  When I do, I am happy to tell the caller what I think of that tenant, good or bad.  I will answer their questions.  Do I have any concerns about being sued if I give a bad reference?

****Disclaimer:  I am not an attorney and this is not legal advice, just my opinion*******

Yes and No.

• I have recently had a couple people send me emails (and I had one guy send me something on FaceBook) asking for a referral on a tenant.  I won’t answer those questions in any written format.  I will only discuss tenants verbally.  One less risk point that an email or fax could fall into the wrong hands and it could be used as proof at a trial.
• No, I don’t expect a tenant to sue me for liable.  I am mostly just stating the facts when asked questions.  Facts are facts.  If I evicted them, then that is public info.  No hiding that fact.  If the paid late, they paid late, while not public info, it is a fact.
• I can’t imagine any tenant having the energy, money, or guts to sue.  And for what?  Are they going to sue for $1 million cause I said they always paid late?  If yes, then get in line.
• While I do recommend you give factual information, I would refrain from hearsay and your opinion as much as possible.  I would expect that those opinions are what get you in trouble.
• There was a website going around that was asking for landlords to rate tenants to help each other.  While it sounds like an awesome idea, it will be plagued with issues if it gets widely used.

Using some common sense and taking the conservative road should keep you out of the courtroom.

Here is an example of a recent email exchange that I had with someone interested in my 2 bedroom plus loft, new construction townhouse in Forest Lake, MN. I was using Craig’s List to rent this property. I decided to post the exchange so you can notice the interesting way they are trying to avoid having to complete a rental application and why red flags were going off everywhere [note the grammar and spelling errors are from the original text]:

Prospect:

Hi. Me and my fiance’ are very intrested in your town home. When will it be available for renting? We just had our first child and need the space asap. Let me know, also quick note we would be willing to pay a few months up front if you’d take 1100 a month plus we got a dog. But we like what we saw so please let us know.

Me:
Thanks. It is available on June 1. I can take the dog (depending upon size and type), but I can’t take $1100. I would be willing to go to $1150 if you paid in advance. [rent is advertised as $1175]

Prospect:
OK we could do 1150 a month. Dog is a pointer terrier and about 45 pounds, does that work? Also were not looking to fill out application that why we’d paid a few months up front, does that work for you, you can also call or landlord now, would that work?

Me:
What is in your background that you prefer not to fill out an application?

I am OK with bad credit as long as you have good income (paying in advance will cover that also).
How long have you been at your current apartment?

Prospect:
We were on the market for buying and had our credit run to much, so we perfer to do what our current landlord did and meet us face to face and we liked each other. Wrote the check and have lived here for over a couple of years. It just tough because alot of people scam people so anyone that is interested in the face to face way is what were looking for. And that is why we want to pay a little extra up front to show that the trust can build. So what do you think?

Me:
I would be happy to rent to you, but it is simply my policy to run a credit, criminal, and rental check on every adult in every one of my properties.

A single credit check run for a rental application is going to do nothing to your credit. Even if it was run 10 times, your credit recovers quickly from those type of checks. Plus, unless you are planning to open new credit line in near future, it doesn’t matter anyway.

Attached is a copy of my rental policies for your review.

Prospect:
Yeah see were trying to by pass all that because were trying to not mark anything.

Me:
Thanks for your inquiry, but I can’t lease to you without a full rental application which includes credit, criminal and rental background checks and verifications.

Clearly this person is trying to hide something. Why else would they not want to fill out a rental application for an apartment they claim they are interested in? Plus, why not simply tell me what the problem is (felony, evictions, collections). I will not be renting to this person!