Property managers and other real estate professionals should follow these steps to stay in compliance with federal and state consumer data regulations.
CHICAGO – Property managers and other real estate professionals routinely conduct background and credit checks in the course of business.
Be vigilant, however: You could be sued for not adhering to federal and state regulations when gathering and sharing sensitive consumer data.
The National Association of Realtors®’ (NAR) latest “Window to the Law” video details a property manager’s duty to comply with the Fair Credit Reporting Act when handling this data, including a consumer’s credit and rental history, as well as other personal data.
Aside from the federal law, state consumer data laws vary widely, says NAR staff attorney Mike Rohde. “Regardless of jurisdiction, consumer reports must only be used for a permissible purpose, which includes evaluations connected with credit, employment, insurance and rental housing,” he says.
To prevent liability, Rohde suggests asking for written consent before ordering background or credit checks. If these reports could lead to a negative outcome, such as the denial of employment or rental housing, provide the person with notice and an opportunity to review a copy of the information, he says.
Also, have a system in place to properly dispose of collected background and credit reports. A document retention policy should detail how you’ll handle it.
Source: National Association of Realtors® (NAR)
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