Non-refundable cash payment for credit check?

[Trizzy]

Hi again guys.

I have at least 4 groups/individual tenants interested in the property I recently acquired a few weeks ago. I have 2 interviews scheduled tomorrow, and I have already accomplished 2 previous interviews. I have 1 fully-detailed rental application, and one semi-detailed application. I have written in my terms of the application(which I downloaded and amended to my specifications from Ontario Landlords website) that:

"I/we will make payment to the Landlord of $10.00 as a service expense regarding the requirement of a consumer/credit report, which is to be paid in cash prior to the requested consumer/credit report. This service expense is not refundable."

I included this amendment. Also, I intend to run credit checks on any fully-detailed application submitted to me. Any semi-detailed applications I will not review, and I will refund them their cash.

My question to you all is;

Is it legally(or ethically) wrong to ask for the cash to do these credit checks, but yet still reject their application?

Doing a credit check, I feel, is necessary. However, I don`t feel it necessary to be burdened with the cost of doing my due-diligence for any/every application(s) I receive.

At the end of the day, I can only choose one prospective tenant(s), and I intend on choosing the most ideal for my situation.

Any insight is appeciated.

 

[RebeccaBryan]

I think there are bigger fish to fry. It can be annoying and disappointing when one credit check after another have 5 or 10 things in collections, but at the end of the day, there are more important issues to worry about. Anyway, the more you do, the better the credit checks look with only one thing in collections.

To add to that, sometimes you can save yourself money if the credit check isn`t the first thing you check. Call their landlord first, interview them with questions regarding your expectations. Just by talking to them you may find that it`s not worth pulling their credit. Also, I just simply ask them what is on their credit report, and if they tell me it`s bad, I look for a reason I might be able to rent the property to them anyway, and if not, I move on and don`t even pull it.

 

[Thomas Beyer]

QUOTE (Trizzy @ Jul 10 2010, 08:38 PM) ..

Is it legally(or ethically) wrong to ask for the cash to do these credit checks, but yet still reject their application?

..
Is it ethical: yes.

However it is illegal in most provinces in Canada to do that .. as one could run a scam and process thousands of applicants and then say: sorry !

Know the landlord-tenant act of your province including detailed list of task for evicting people or if rent is late .. or hire a professional firm !

 

[Trizzy]

Ok thanks Thomas for the insight. I will amend my application so a credit check will only be requested after the interview process for the most suitable tentant(s).

 

[housingrental]

Hi Tristan
What rent are you asking for the upper unit?

 

[Trizzy]

Hey Adam.

I have 3 applications for $1750. Works out to be $350/room for 5 tenants. Utilities/Hydro Inclusive.

I should rightfully be charging more, as I wasen`t aware so many student groups were interested. It`s nuts!

I think after my trial and error period for the first year, I will be increasing the asking amount to $450/room, with the same terms. With me living downstairs, this property next year could be bringing in decent cash flow. You are SO RIGHT about renting to students. Changes my perspective completely.

Thank you for enlightening me Adam. It will pay off ten-fold(hopefully!) down the road!

Heres to our sucess!

 

[housingrental]

Good luck!

Don`t get greedy though.

$1750 for your unit is well above market ... (ie if renting as one unit)

And student demand for your location is fickle... but great if you can get willing student renters.


QUOTE (Trizzy @ Jul 11 2010, 05:55 PM) Hey Adam.

I have 3 applications for $1750. Works out to be $350/room for 5 tenants. Utilities/Hydro Inclusive.

I should rightfully be charging more, as I wasen`t aware so many student groups were interested. It`s nuts!

I think after my trial and error period for the first year, I will be increasing the asking amount to $450/room, with the same terms. With me living downstairs, this property next year could be bringing in decent cash flow. You are SO RIGHT about renting to students. Changes my perspective completely.

Thank you for enlightening me Adam. It will pay off ten-fold(hopefully!) down the road!

Heres to our sucess!