Every so often it is suggested that landlords begin compiling a list of bad tenants to share with one another.  This topic often arises after a landlord has been “burned” by a bad tenant that skipped out on a lease owing rent, caused severe damage to the landlord’s rental property, or any number of other breaches of their rental agreement.  It is argued that such a list could prevent other landlords from renting to the same “bad” tenant and hopefully avoid being burned as well.  While this seems like a great idea on its face, blacklising tenants is full of legal ramifications.

This issue came up last week on the “AASEW Listserv”  (a Yahoo groups community that includes 800+ landlords and property managers primarily located in the SE Wisconsin area that discuss all things rental).  The list serv is expertly moderated by Tim Ballering.  If you are not a member of this list serv (and you are invovled in the rental property industry) then you should definitely join by sending an email to ApartmentAssoc-subscribe@yahoogroups.com

Below is the question posed by a landlord and the moderator’s response.

QUESTION: 

Does our group have a policy about sharing names of problem tenants?  I am sure some landlords would love to know who is a problem and others may feel differently about that.

ANSWER: 

Short Version:   We do not permit it.

Long Version (why we do not permit something that would be a great tool for all of us):

Posting deadbeats names to a list violates the Federal Fair Debt Collection Practices Act (FDCPA).

“Blacklists” are quite illegal and potentially costly to those involved with maintaining the list or those sharing the names that end up on the list.  If you keep a list of who has been naughtly or nice, that list must contain both good and bad information about the tenant.  Additionally, those named tenants must have the ability to review and challenge the validity of their inclusion.  Finally, all provisions of the Fair Credit Reporting Act must be complied with that any other credit bureau must adhere to. 

Fines can be as large as $50,000 per offense plus the poosibility of being sued civilly.

The pertinent rules under the FDCPA are:

§ 805. Communication in connection with debt collection 
 
. . .
 
(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.
 
§ 806. Harassment or abuse 
 
 A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
 
. . .
 
(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3)
 
  
__________________________
 
So as helpful as a listing of bad tenants might appear on its face, it is illegal.  The best way to avoid renting to problem tenants legally is to properly screen all rental applicants – to read more about this please see my April 17th post and refer to these helpful internet sites.
 
 

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