How much does tenant screening cost?

Credit checks cost $10-30 through commercial services. Phone calls to references are free. You cannot charge these costs to the tenant; they are a business expense for the landlord.

What if the applicant has no rental history?

First-time renters will not have landlord references. Place greater emphasis on employment verification, credit checks, and personal references. You might consider requesting a guarantor, asking for advance rent (up to 2 weeks is permitted under the RTA), or requesting proof of savings to demonstrate financial stability. Note that bond is capped at 4 weeks' rent regardless of circumstances.

Can I reject a tenant based on credit score alone?

Yes, poor credit history is a lawful reason to decline an applicant. However, consider the full picture; a single old default may have a reasonable explanation. Document your reasons for the decision.

How long should I keep tenant screening records?

Keep records for the duration of the tenancy plus a reasonable period after (typically 6-7 years for tax and legal purposes). For unsuccessful applicants, retain records long enough to respond to any complaints, then securely dispose of them.

Tenant Screening Checklist NZ

Thorough tenant screening is your best protection against rent arrears, property damage, and tenancy disputes. This checklist covers everything you should verify before accepting a tenant, while staying within legal boundaries.

A comprehensive screening process takes time, but the investment is worth it. One bad tenant can cost thousands of dollars and months of stress. A good screening process dramatically reduces that risk.

Identity Verification

The foundation of tenant screening is confirming that applicants are who they claim to be. Identity fraud does occur in rental applications, and verifying identity early prevents problems later.

Identity Verification Checklist:

☐ Photo ID (passport, driver licence, or 18+ card)
☐ Check the photo matches the person
☐ Verify the ID has not expired
☐ Cross-check name and date of birth across all documents
☐ For overseas applicants, check visa status and work rights

Take a copy of the ID for your records, but ensure you store it securely in compliance with the Privacy Act. You should only retain personal information for as long as necessary.

Rental History Verification

Past behaviour is the best predictor of future behaviour. How an applicant treated their previous rental is likely how they will treat yours.

Contacting Previous Landlords

Always phone previous landlords directly. Written references can be fabricated, but a conversation reveals much more. Use the contact details provided but verify independently if possible; search for the property address to confirm the reference is from the actual owner or manager.

Questions for Previous Landlords:

How long did the tenant live at the property?
Was rent always paid on time?
Were there any issues with property maintenance or cleanliness?
Did the tenant give proper notice before leaving?
Was the full bond returned, and if not, why?
Were there any complaints from neighbours?
Would you rent to this tenant again?

Pay attention to hesitation or vague answers. A landlord who would happily rent to someone again will say so enthusiastically. Lukewarm responses often indicate underlying issues.

Tenancy Tribunal Checks

The Tenancy Tribunal publishes its decisions online. Search for the applicant's name to see if they have been involved in any disputes. While not all disputes indicate a bad tenant, patterns of non-payment or repeated issues are red flags.

Employment and Income Verification

The tenant needs to be able to afford the rent. Verifying employment and income ensures they have the financial capacity to meet their obligations.

Income Verification Checklist:

☐ Recent payslips (last 2-4 weeks)
☐ Employment letter confirming position and salary
☐ Contact employer to verify (with tenant consent)
☐ For self-employed: accountant letter or recent tax return
☐ For beneficiaries: WINZ confirmation letter

A common guideline is that rent should not exceed 30-35% of gross income. If the rent is significantly higher than this proportion, the tenant may struggle to pay consistently, especially if their circumstances change.

Credit Checks

Credit checks provide insight into an applicant's financial history and reliability. They reveal defaults, judgments, bankruptcies, and payment patterns.

Obtaining Consent

Under the Privacy Act, you must have written consent before conducting a credit check. Include consent in your tenancy application form, clearly explaining what the check involves and how the information will be used.

Interpreting Credit Reports

Credit reports show payment history, defaults, court judgments, and bankruptcy. Look for patterns rather than isolated incidents. A single default from years ago may have a reasonable explanation; multiple recent defaults suggest ongoing financial issues.

Red Flags in Credit Reports:

Multiple defaults or arrears
Current or recent bankruptcy
Unpaid utility bills
Court judgments for debt collection
Pattern of short-term loans or payday lending

Credit check services for landlords are available from companies like Centrix, Equifax, and illion. Costs are typically $10-30 per check.

Personal References

Personal references complement landlord and employment references but are the least reliable form of verification. Friends and family will almost always provide positive references.

If you do contact personal references, focus on questions about the applicant's reliability, lifestyle, and any concerns they might have about the person as a tenant. Listen for hesitation or qualified responses.

Meeting the Applicant

Meeting applicants in person provides information that documents cannot. How they present themselves, their communication style, and their questions about the property all provide insight.

Observations During Viewings:

Did they arrive on time?
How did they present themselves?
What questions did they ask about the property?
Did they seem genuinely interested and engaged?
How do they communicate?

Documentation and Record Keeping

Document your screening process and the reasons for your decisions. If an unsuccessful applicant claims discrimination, you need to demonstrate that your decision was based on legitimate tenancy factors.

Keep records of reference check notes, credit check results, and the criteria you used to make your decision. Apply the same screening process consistently to all applicants.

Legal Considerations

You cannot discriminate against applicants based on protected characteristics including race, ethnicity, national origin, sex, marital status, religious belief, disability, age, political opinion, employment status, or family status.

Lawful reasons to decline an applicant include poor rental history, insufficient income to afford the rent, poor credit history, inability to provide references, or having pets when the property is not suitable. Document these reasons clearly.

The Complete Screening Checklist

Pre-Tenancy Verification Checklist:

☐ Photo ID verified and copied
☐ Visa status checked (if applicable)
☐ Previous landlord contacted and reference confirmed
☐ Second previous landlord contacted (if available)
☐ Tenancy Tribunal records searched
☐ Employment verified
☐ Income verified (rent is less than 35% of gross income)
☐ Credit check completed (with written consent)
☐ Personal references checked (optional)
☐ In-person meeting completed
☐ Decision documented with reasons

The Bottom Line

Comprehensive tenant screening protects your investment and sets the foundation for a successful tenancy. Take the time to verify information, contact references directly, and trust your judgment. The effort invested now will save significant time, money, and stress in the future.