Finding the perfect tenant is crucial for landlords in Ontario, as it ensures a steady rental income and safeguards their property. One of the best ways to evaluate a potential tenant’s financial responsibility and trustworthiness is by conducting a credit check. In Ontario, there are specific rules and regulations to follow when performing a credit check on a tenant. This article aims to provide a step-by-step guide on how to carry out a credit check and highlight the key points every landlord in Ontario should know.
1. **How to do a credit check on a tenant in Ontario?**
Performing a credit check on a tenant in Ontario involves several steps:
Step 1: Obtain written consent from the tenant, as it is legally required.
Step 2: Use a reputable credit reporting agency to collect the tenant’s credit report.
Step 3: Review the credit report to assess the tenant’s financial history, including previous debts, payment patterns, and any bankruptcies or collections.
2. What information should I collect from the tenant?
When requesting a credit check, landlords should gather the following information from the tenant: their full name, current address, date of birth, and consent to obtain their credit report.
3. Can I charge the tenant for the credit check?
Yes, under the Residential Tenancies Act of Ontario, landlords can charge tenants for the cost of performing a credit check.
4. How much can I charge the tenant for a credit check?
Landlords can only charge tenants the actual cost of obtaining the credit report, typically ranging from $15 to $30.
5. Can I deny a tenant based on a bad credit history?
While a bad credit history may raise concerns, it is important to consider other factors as well. Denying a tenant solely based on their credit history may contravene the Ontario Human Rights Code, which prohibits discrimination based on financial status.
6. Are there any restrictions on using a credit check for screening tenants?
Yes, landlords can only use a credit check to assess a tenant’s financial responsibility, not as a means of personal judgment or discrimination based on other protected grounds, such as race, religion, or disability.
7. Can I use a credit check from a previous landlord?
While a credit check from a previous landlord can provide valuable insights, it may not cover the entire credit history. It is recommended to perform a separate credit check using a reputable credit reporting agency.
8. How long does a credit check take?
The time it takes to receive a credit check report varies depending on the credit reporting agency. It could take anywhere from a few hours to a few days.
9. What if the tenant refuses to consent to a credit check?
If a tenant refuses to provide written consent for a credit check, landlords may consider it a red flag and can choose not to proceed with their rental application.
10. Can I ask for a credit report if the tenant has no credit history?
Yes, even if a tenant has no credit history, landlords can still request a credit report to confirm their financial responsibility.
11. Are there any alternative methods to assess a tenant’s financial responsibility?
Apart from credit checks, landlords can also request references from previous landlords, ask for employment and income proof, or ask for a guarantor if the tenant has no credit history.
12. How long should I retain the tenant’s credit check information?
According to the Office of the Privacy Commissioner of Canada, landlords should retain credit check information for as long as it is necessary for the purpose it was collected. However, it is important to comply with applicable privacy laws and ensure the secure storage and disposal of such sensitive information.
By following these steps and understanding the legal obligations, landlords in Ontario can effectively perform credit checks on tenants to make informed decisions when selecting reliable and financially responsible tenants for their rental properties. Remember to prioritize the tenant’s privacy and comply with all relevant regulations while conducting credit checks.