As a landlord you need to think about how to store tenants personal information you have collected.
Congratulations that you have successfully found a tenant!
But in the hustle and excitement of settling in your new tenant you’ve got to find something to do with all that paperwork you’ve accumulated.
As a landlord, you have access to a large amount of personal information— information that could cause a lot of damage if it landed in the wrong hands.
Federal law (FACT Act) requires you handle any paperwork with credit information or personal and financial information very carefully— this includes tenant screening reports, rental applications, and any notes you might have taken during the interview process regarding a potential tenant’s secure information.
1. Keep all tenant applications, background checks and employee files in a locked cabinet. The only people who need access to this cabinet are you and your office or property manager (if you have one).
2. Determine a shelf life for all paperwork. You don’t need to keep every tenant screening report you’ve ever done. And if you have information from past tenants who have not occupied your unit in over a 2 ½ years you need to get rid of it.
3. Create a purging system and stick to it. Pick a date bi-annually or once a quarter and purge all files you no longer need. Waiting around or haphazardly purging files could get you in legal trouble or just leaves you more exposed.
4. Be effective during your purge periods. Federal law requires you to be reasonable in regards to destroying documents. This means if you are a rental property owner with 2 properties you’ll be capable of purging records with a simple home office shredder. If you own 25 properties you need to consider hiring a shredding service. DON’T just rip the paper in half or quarters and assume the information has been disposed of properly.
5. Don’t forget about your digital files. PDFs, emails, spreadsheets, text files— delete it all when you no longer need it. And be sure to store it on a private computer or drive. When you are ready to purge the files purchase a program that not only delete the file directory but also the text.
The Federal Trade Commission and its state counterparts will impose heavy fines if they find someone has knowingly disregarded the FACT Act. Protect your tenants and past applicants from a security breach. And better yet, protect yourself from a costly lawsuit.