Possible Relocation Delays Ahead for Transferees Planning to Rent

April 25, 2013 10:12:00 AM EDT | By: Michelle Dopps

By Guest Contributors
Cara Pescho and Kelly Cockrell

expect delays sign small 041713Supply and demand – it’s the oldest of concepts that is currently impacting the corporate rental market and subjecting corporate transferees to a non-typical background check as part of the current tenant screening process. Relocation companies may need to warn clients of possible delays.

With so much demand and limited supply, property owners can be very particular in their selection of potential tenants. Background practice and U.S. Fair Housing laws require corporate transferees to be subject to the same screening as all other applicants.

This new standard is causing a stir among global mobility managers and the transferee population as this unfamiliar practice becomes mainstream. To prevent frustration, transferees need to be aware of these additional steps and increase their lead time when applying to rental properties.

Foreign nationals entering the rental market need not be worried. They may be asked to provide a copy of their visa and/or passport, but because they cannot be background checked, the location has not violated fair housing laws because they have not “treated them differently.” 

 In some cases, it may only require an additional 24 hours to complete the back ground check once the assignee has filled out the application.  In other cases, it can take longer, especially if there is anything derogatory that would require additional information or follow up. 

What is a background check?
Typically, a background check, otherwise known as a “Tenant Screening Process” involves information surrounding the rental history, employment history, credit score, and criminal background status of a prospective resident. 

As trends in the corporate housing and rental market point to continued growth in the renter populations, an increase in the use of background checks is predicted to also climb. Low supply and high demand afford landlords the opportunity to be choosy with prospective tenants. The ability to pick the very best tenant is extremely important to property managers as good tenants add value to a property and help create an improved atmosphere within a rental community.

The U.S. Housing Trend

  • 1.5 million households moved into rental housing over the year ending March 2012 

  • This is a 4% increase in one year

  • U.S. vacancy rates are at the lowest level since 2002

  • 41 million renter households in 2012 with reduced turnover

  • New apartment construction held at bay which creates a tighter rental market where occupancy is high and vacancies are low resulting in higher rental rates

  • U.S. rents were 6% higher in May 2012 from the previous May

  • U.S. homeownership is at 65% which is a 15 year low

Trends by Regiongrown in rentals

rental vacancy rates

Corporate Housing Trends

  • Corporate housing industry reported 62,204 apartments available in 2011 and is expected to exceed 64,000 in 2012

  • Occupancy averaged 88.6% in 2011

  • Average length of stay is up from 83 to 86 nights

Top Destinations for Transferees:

  • Midwest 37%

  • Northeast 31%

  • South 28%

  • West 20%

*Information provided by the 2011 ERC Transfer Volume & Cost Survey, US News, REIS Inc, Trulia, US Census,  and Inc.

Topics: corporate housing, employee relocation, renters background checks, relocation companies, transferees, corporate rentals

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