This question can be answered by asking another question. Can property management risk having destruction of property, default on rent, criminal activities on the property, and so on? The answer is definitely no, and therefore you cannot gamble with tenant screening, since the losses can be much more than having a few vacancies. It is always better to have standout tenants and some vacancies, rather than fill the property with mainly solid people but while mixing in some troublesome characters.
That is a recipe for disaster. The good people will soon move out and after a few months you will be running a prison. Scary thought right?
It is usually tempting for property managers to skimp on tenant screening when a unit is lying vacant for a long time. However, the repercussions of insufficient screening procedures can be disastrous. Here are some of the major risks that property management will be exposing the property to, when proper tenant screening procedures are not followed.
Loss of Reputation
When people read ads that suggest lack of screening procedures, they at once form a low opinion of the property. They will also not feel secure, since they know that there are genuine chances of their neighbor being a criminal or of an unsavory disposition. Secondly, failure to adopt proper screening procedures could also deter current tenants from renewing their leases because of the same fears. All this can mean loss of reputation, and it can take property management many years to build up credibility after the damage is done.
Possibility of Lawsuits
When prior applicants had to undergo screening procedures and if certain applications were rejected, based on the screening results, then those applicants have a strong case against the property, if they file a lawsuit. According to Fair Housing Laws all applicants regardless of their religion, creed, color, or ethnicity, should be screened in the same way. When property management suddenly decides to scrap the screening procedure, they are answerable to applicants who were rejected in the past, and to future applicants who might be denied tenancy based on certain factors.
Extensive Damage to Property
Screening checks help to weed out unreliable tenants, as their history on previous properties will become known. Lengthy background checks will make such applicants uneasy, and they will move on to properties that are more lax. Secondly, implementing a security deposit as part of your orientation process is also a marvelous deterrent, as tenants become aware that you take the matter of property damage seriously.
Tenants automatically start taking more care of the property when they feel responsible for the condition of the unit. Hence, not taking a security deposit is a lousy publicity stunt that can backfire. The fact that you are not taking any deposits conveys the idea that you are not serious about property damage, and even quality tenants will begin to neglect their units. This is a bad precedent to set, and it can take this property a while to gain back its reputation that it is bound to lose.