As a landlord, you want to know everything possible about someone who is asking to occupy your valuable investment property, including any negative public records in their files. After all, they are asking for the key to a property worth hundreds of thousands of dollars and you have the right to know if that person has a questionable background. THE ROLE OF PUBLIC RECORDS IN BACKGROUND SCREENING PUBLIC RECORDS DEEP DIVE BANKRUPTCY, LIENS AND CIVIL JUDGMENT REPORTS CAN REVEAL NEGATIVE PUBLIC RECORDS
A prospective tenant’s past financial history, including any unpaid debts, will be exposed by a search of their public records. (Public records are liens, bankruptcies, or civil judgments that have been documented by federal, state or county courts.) A tax lien is the government’s legal claim against a person’s property when they neglect or fail to pay a tax debt. The lien protects the government’s interest in all their property, including real estate, personal property, and financial assets. In some cases, a lien can affect a person’s ability to get a loan or a job. A civil judgment is a legal court decision that decides a dispute between two parties. If a person owes a debt and doesn’t pay it as agreed, the lender may eventually file a lawsuit against them. If the lender wins that suit, a judgment is entered against the debtor, providing the lender with the legal authority to seek liens and garnishments to recoup their money. In the case of rental property, a property management company or landlord may sue a prior tenant for damages that exceed the security
deposit or unpaid rent. These types of cases are not classified as evictions and therefore do not appear on an eviction report. Although bankruptcies still appear on a credit report for up to 10 years, nearly all tax liens and civil judgments have not appeared on credit reports for about seven years. Until 2018, liens and civil judgments were reported on credit reports compiled by TransUnion, Experian and Equifax. They were removed per a provision in the National Consumer Assistance Plan (NCAP), launched in March 2015 in response to a settlement between the nationwide consumer reporting agencies (NCRAs) and over 30 State Attorneys General to remedy alleged Fair Credit Reporting Act violations. It has been shown that the removal of these records from credit reports did not significantly impact a person’s credit score. However, if a person has a judgment issued to them for an unpaid debt, they may have a collection record on their credit report related to the delinquent account. A bankruptcy or collection will significantly affect the credit score for up to seven years.
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