Learn How a Prospective Tenant Becomes an Actual Tenant (2024)

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Learn How a Prospective Tenant Becomes an Actual Tenant

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A prospective tenant is an individual who could possibly move into a vacancy at your rental property. He or she has begun the initial steps of the tenant screening process. He or she may have called about your property, may have come to view your property or may have even filled out an application to rent your property.

There are several steps involved before a prospective tenant becomes an actual tenant. The individual must go through yourcomplete screening process,must sign a lease agreement, and must pay their first month’s rent and security deposit before they are considered an actual tenant. Until that point, there are still referred to as prospective, or potential, tenants.

Differences Between Prospective Tenant and Actual Tenant

Prospective Tenant:

8 Steps to Become an Actual Tenant

1. Inquire About Viewing the Property

The potential tenant will contact the landlord about the vacancy at the property. The landlord may pre-screen the tenant over the phone to determine if the individual will continue tothe next step of the process. Here are10 Questions to Ask Prospective Tenants.

At every point in the screening process, the landlord must treat all prospective tenants equally. This can be done by having the samequalifying standardsfor all potential tenants. In addition, you must follow theFair Housing Act.This act prevents you from discriminating against tenants based on factors such as race, religion or five other classes.

2. View the Property

The next step is for the prospective tenant to schedule an appointment and actually view the property.

3. Fill Out Rental Application

If the tenant likes what he or she sees during the viewing of the rental, he or she can fill out a rental application. This application will include basic information about the tenant, such as:

Full Name
Yearly Income
Employment History
Number of People That Will Be Living in the Apartment
Current and Previous Addresses

4. Consent to Background and Credit Check

The rental application will often include an area where the tenant agrees to having a background orcredit checkconducted.

5. Pass Background and Credit Check

The information on the tenant's rental application will be verified. If anyred flagsare discovered during this screening process, the landlord can discuss the issues with the applicant. Examples of issues that could come up are poor credit score, a history of evictions or a criminal record.

6. Sign Lease Agreement With Landlord

If everything checks out to the landlord's satisfaction, then the tenant has the option of signing aleaseto rent the property. The lease term can vary from a weekly lease, a monthly lease or a yearly lease and will be agreed on by both landlord and tenant.

7. Pay Security Deposit and First Month's Rent

Before moving into the rental, the tenant must pay the security deposit, as well as the first month's rent. The maximum amount of the security deposit may be set by astatewide limit.

8. Move Into Rental

Finally, the applicant can move into the rental. The individual goes from being a prospective tenant to being an actual tenant.

Author: ERIN EBERLIN

Submitted 02 Jul 18 / Views 1980

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I have a solid understanding of property management and tenant processes. To explain the concepts detailed in the article you provided:

Prospective Tenant vs. Actual Tenant: The distinction lies in the stage of the tenant screening process. A prospective tenant is someone who has shown interest, viewed the property, and possibly filled out an application. An actual tenant, however, has passed the screening, signed the lease, paid the necessary fees, and is currently residing in the rental property.
Steps from Prospective to Actual Tenant: a. Inquiry and Viewing: The initial step involves a potential tenant contacting the landlord, followed by scheduling and conducting a property viewing. b. Rental Application: Interested individuals fill out an application, providing personal and background information. c. Consent to Checks: Applicants often agree to background and credit checks as part of the application process. d. Screening: The landlord verifies the information provided, looking for any red flags such as poor credit, eviction history, or criminal records. e. Lease Agreement: If all checks out, the tenant can sign a lease agreement with the landlord, agreeing on the lease term. f. Payment: Before moving in, the tenant pays the security deposit and the first month's rent. g. Occupancy: Once all formalities are complete, the individual transitions from being a prospective tenant to an actual tenant by moving into the rental property.
Fair Housing Act and Equal Treatment: Landlords must adhere to the Fair Housing Act, preventing discrimination based on race, religion, or other protected classes. They should maintain consistent qualifying standards for all potential tenants.
Landlord's Responsibility: Throughout this process, landlords must treat all prospective tenants equally, maintaining fair and consistent practices. They must also comply with legal requirements and ensure transparency in the screening process.

Understanding these steps and legal obligations is crucial for property managers to effectively handle prospective tenants and maintain ethical practices in tenant selection.