Landlords and property owners want good tenants. Tenants who maintain the property they rent, coexist with neighbors, pay their rent on time and have the financial means to fulfill their contractual obligations, and are not involved in any untoward or criminal activities. But how do you ensure you have safe tenants and mitigate risk to your property’s value? Screening prospective tenants by running background and credit checks is an excellent way to determine the best tenants for your property.
A background check helps establish whether a tenant has a criminal record, prior eviction notices, or even previous cases of fraudulent behavior. A credit check, on the other hand, helps assess the tenant’s ability to pay their bills and fulfill their contractual obligations. Here are seven important checks to take into account when screening future tenants.
In 2014, the Central Bank of the UAE created Al Etihad Credit Bureau (AECB). The bureau collects and aggregates credit information from multiple utility companies, financial institutions, and government sources, creating a credit score rating for individuals and businesses in the UAE. The bureau generates four types of credit-related reports and scores:
Once a prospective tenant consents to a credit check, landlords can use the reports from the credit bureau to assess open and closed credit cards, payments, late payments, and gauge monetary patterns. The amount of information can be overwhelming, particularly for landlords not used to the system. So we advise focusing on the following:
Obtaining a Certificate of Good Conduct is an easy process with Dubai Police, so you should ask your tenant for this before deciding whether they are fit to lease your property. Although not mandatory by law, you could make it a criterion for your screening process. This will ensure you mitigate the risk of leasing your property to someone with a criminal past.
If you don’t want your apartment being put under quarantine as a result of infectious diseases, request medical test results. This may come as an outrageous request but it may help avert disastrous tidings. Ensure they get the medical report from a government-approved medical center. Fortunately, most expats in Dubai already have a medical report completed as a requirement of their visas. So, most won't have a problem providing it to a potential new landlord.
Sometimes, a local good conduct certificate might not provide enough history, particularly if your tenant is a young expat who has recently moved to Dubai. In such cases, it might be prudent to request a background check or Certificate of Good Conduct from the tenant’s home country. Some of these reports might still be sent by registered mail, so account for delivery times.
Social media is a powerful tool to do your own background check on your prospective tenants. Check out their public profiles to ensure their history and information shared on forms is accurate. This includes previous and current employment, address, etc.
Just like references on a résumé, a great way to learn about your prospective tenant is to speak to their previous landlords. Their behavior will usually be carried over from their previous residence. However, remember to take everything with a grain of salt. The previous landlord may stretch the truth and give a stellar review, just because they are looking to get rid of a bad tenant. While speaking to them, ask the following questions:
Last, but not least, is verifying a prospective tenants’ income. You could call their employer and speak to the Human Resource manager to verify such information. When conversing with the employer, try to find out the following:
A tenant credit check and background check is the forecast of troublesome tenant behavior. When renting a property through Airbnb, or a similar service, it is not certain that tenants are screened at all. Make sure you know who is staying in your space. At Blueground, we take care of the tenant screening for you. Acting as the landlords ourselves, we ensure that all tenants have been vetted. Through careful tenant screening, you can easily avoid many issues.
More than 60% of landlords in Dubai strongly believe that background checks are as important as credit checks. Background checks act as a safety measure, while credit reports establish financial capability. Both are important and should never be skipped.
Especially in a dynamic city like Dubai, with a constantly moving population, tenant background and credit checks are worth the hassle to avoid any potential hazards and ensure you are renting out your apartment to the best possible tenant.