Recently I was perusing one of the many property management Facebook groups, and there was a post railing against the poster’s particular screening provider, claiming that their criminal background check was terrible. I won’t name the screening provider, because the reality is that I’ve seen this exact same post from users of every single screening provider there is. Why? Because they’re all dealing with the same problems with criminal records searches. But most property managers have absolutely no idea how criminal background checks work, and I find that most of them just assume that there is some sort of national database to pull records from, similar to pulling up someone’s credit from Equifax. Sadly, tis not the case.
PMAssist Industry Insights is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
There is No Database
First, let’s dispel the notion that there is any sort of national database for criminal records whatsoever. It does not exist. The closest thing that does exist is the FBI’s NCIC (National Crime Information Center). But not only is that database not available to the public at all (even law enforcement officers can’t access all of the information without jumping through hoops), it’s still not even totally complete. The problem is that it’s up to each local jurisdiction to submit their own data, and many of them are slow to submit data, submit incomplete data, or just don’t submit anything at all. Participation is 100% voluntarily.
PlanOmatic is the fastest and easiest way to get professional photography, 3D tours, and floor plans via direct integration with your property management software.
Set up an account with your basic info
Order photos when you have a vacant listing
Images are synced to your PM software once completed
The best part? It takes less than five minutes to get set up, no commitment required.
But again, even if that database was complete and up-to-date, we can’t access it, nor can any of our screening companies. It is literally illegal under federal law for the NCIC to be accessed by anyone but law enforcement and government officials. So your screening company isn’t being negligent when they miss a criminal conviction. They simply didn’t know about it, because it was impossible for them to know about it.
A Cobbled Patchwork
So if there is no national database available for criminal searches, then how are screening companies providing criminal background searches? Simple: they’ve compiled their own proprietary databases by scraping thousands of state and local records on an ongoing basis. When you submit a screening request, they aren’t searching public data, they’re searching their own private database that they’ve put together.
Here are the plethora of problems with this method, and why you will never get a reliable criminal background check:
Different jurisdictions update public records at different rates and provide different information; one jurisdiction may publish arrest records, another may not. One may include personally identifying information such as a date of birth, others may not.
Even for jurisdictions that are pretty good about reporting data publicly, they are still typically pretty slow with it. It could be weeks, even months at a time, before a new conviction shows up in public records. And then the screening company has to catch that update and feed it into their database, which could take more time. If someone was convicted of armed robbery two months ago, and you’re running a search today, they may come up clean despite the conviction.
Many local databases are not setup to be easily “scraped.” That means that the only way to pull data is for a human to go in and pull up the data and then enter it into the screening company’s own database. This is obviously wildly inefficient, and makes it impossible to keep these private databases up to date in any real sense.
Virtually no jurisdictions are reporting out data that can be used to positively match a person to a criminal record. Something totally unique, like a Social Security Number, is almost never included, and when it is, it’s only a partial number, such as the last four digits. With somewhere around 50,000 people in America named John Smith, you can see why this is a problem. Usually all the screening company is able to match on is name and DOB, and sometimes only name. This leads to lots of false positives and false negatives.
Premium Searches
Whether you’re paying for basic screening or premium screening, you are going to have the same basic fundamental problems discussed above. That said, if you are hell bent on making sure you have the most complete criminal search possible, there are premium options to get a more complete picture.
Most of our screening providers are running “instant” checks. These checks look in their private database to match the applicant based on name and DOB only, because that is the only data that is consistently available. But some screening providers offer an “upgrade.” If you opt instead for a premium search instead of just the standard instant search, then they’ll have an actual human being manually dig through the databases of state and local jurisdictions where the applicant has previously lived to make sure the instant database isn’t missing anything. These manual searches many times will also be able to see more data, such as partial SSNs, to help with getting a positive match or ruling out a record that would have been flagged in an instant search based on just name and DOB.
There are, of course, two big problems with premium background searches:
Cost - Typically these premium searches are adding anywhere between $10-$30 onto the cost of screening each applicant. If you’re only charging say $50 for an application fee, you may actually be losing money on screening operations by the time you factor in the cost of your labor on top of the out-of-pocket screening fee from the background provider. And in many markets, if you boost the application fee high enough to cover all costs including a premium screening, then you’ll price yourself right out of the market and have trouble leasing. Or, in some jurisdictions that have now limited application fees, the out-of-pocket cost itself might even exceed the fee you’re allowed to charge.
Time - An instant check is, obviously, instant. Or at least virtually so. But once you get to a premium screening, now it’s going to take manual labor for someone to do in-depth searches in county level databases, so typical turnaround times are 24-72 hours. I don’t know about you, but screening time is a big deal for my business. Many applicants are applying to multiple properties, and if someone else approves my good applicant first just because I’m sitting around for three days waiting on a criminal check, that’s hurting me and my landlord client. Some may argue that it’s worth it to avoid putting a criminal in the property, but we’ll get to that.
There’s good reason that the vast majority of property managers aren’t doing premium searches. The potential benefits are just outweighed by the cost and the time in the judgment of most of us.
To What End?
And that brings me to my big question: what’s all of this for? I can see the argument much more easily in multifamily. You have hundreds of families all living in close proximity to one another. Someone who engaged in armed robbery or assault and battery in recent years probably isn’t someone you want in apartment 1A when 1B is a family with small kids. The liability risk is too great, and while there are ethical concerns on both sides of the debate, I think the side wanting to protect the family with small kids probably comes out on top there.
But the vast majority of readers of this publication are engaged in management of scattered site SFR rentals. Most of you probably don’t even have two houses in your portfolio that are within a quarter mile of each other. We don’t have the same legal or ethical questions at play that multifamily PMs do when it comes to criminal searches. In fact, my research has turned up not a single court ruling that has ever held that an SFR landlord or PM has an obligation to screen for criminals to ensure that surrounding houses and communities are safe. This is only an obligation that courts have found for multifamily communities, based on the idea that tenants in multifamily communities have a reasonable expectation of communal safety. By contrast, courts generally see SFR rentals as having no communal safety obligations because there is no shared space between your tenants and their neighbors.
So what this really comes down to is this question: do you really want to double the cost of your applicant screening and make it take days longer than necessary and potentially lose good applicants in the process just to feel good about denying an ex-con maybe one out of every few hundred screenings? Because that’s really what this comes down to. Even if the applicant was convicted of armed robbery five years ago, does that really impact whether he’s going to be a good tenant in your single family rental today? If everything else on his application looks good, then probably not. People with 750 credit scores, even if they have a criminal conviction, aren’t likely to get evicted or tear up your house. That credit score is far more predictive of tenant behavior than their criminal record is. There’s a reason that your mortgage company didn’t have you get fingerprinted before approving your loan, but they damned sure dug deep into your credit report. Remember, we aren’t cops or judges. It isn’t our role to punish people for past criminal behavior. Our job is to be a fiduciary for the landlord. What is in their best financial interest? I just don’t think that expensive and days-long manual criminal background checks are it. Your client needs her house rented out to someone who is going to pay and take care of it. That’s it. That’s your responsibility. Make your screening decisions on that basis.
The Grass Isn’t Greener
Ultimately, whether you agree with me or not that criminal background checks just aren’t that important in SFR management, we still come back to the same situation: not a single method exists to positively verify that an applicant isn’t a criminal. There is no national database, and even premium background checks are just marginally better than instant ones. So my advice to you is to remember that the grass is rarely greener on the other side like you think it is. Jumping from one background screening provider to another just because your current one missed a criminal conviction is a fool’s errand, because even if the new screening provider would have caught this one, they’re going to miss a different one. None of them are any different. They’re all working within the same flawed system and cobbling together their own private patchwork of records. You’ll go through all of that effort and hassle to switch screening providers just to find that they all have exactly the same problem. Unless you want to pay a private investigator hundreds of dollars to do a true deep dive into an individual’s background, then all of these systems are imperfect. Accept the imperfections of the one you’ve got and make it work. In reality, it will likely never have any real impact on you or your landlord clients. It’s just not that big of a deal.
We’re Hiring!
My property management company is looking for another BDM! If you have PM experience, and you either live in Atlanta or are willing to move here, please send me a resume. The position offers a combination of salary and per-door commission (with a heavy emphasis on commission), so we’re looking for go-getters who will put in the work to close leads. You would start off with 40+ leads from day one, so plenty of opportunity. Georgia real estate license required, or must be willing to get it prior to starting. If interested, email me a copy of your resume to toddo@revolutionrm.com
Open to Work
Are you an experienced PM industry employee looking for work? Or are you a PM company or vendor seeking the best talent? Send me your info and I’ll feature it here! And look forward to future editions where we’ll be featuring some of the best RTMs available!
We always have some available ad slots open for industry vendors, and we offer discounts if a slot is still open within the next four weeks. Sign up for a full-size ad or ad package here. Pricing and ad details can also be found at that link.
Debate Me
Disagree with my take here? Have a different perspective? There’s nothing I love more than a good debate or even just an intelligent conversation. If you’d like to jump on a podcast recording with me to discuss this topic, please let me know!
The views expressed in this publication are the views of the author only and not any advertisers, sponsors, partners, affiliates, or organizations that the author may be a member of.
PMAssist Industry Insights is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
