Why Should I Screen My Commercial Tenants?
The answer to this question might be obvious to some, but if not, let’s look at answering this question. Fundamentally speaking, there isn’t much difference in tenant screening for residential or commercial purposes. If you’re under the impression that commercial tenants are less susceptible to cause problems and are more reliable, then you could be badly mistaken. With commercial tenants, there is typically more on the line. They are in a more valuable space, they pay more rent, and they are way more visible to the public eye. So, why not take a look under the hood before you hand over the keys to your space? Screening is a simple and affordable way to ensure you’re not taking too much risk with your commercial space.
When you lease a commercial space, you want the tenant to occupy that space for a long time. To minimize your risk, you could pull a business credit report on the tenant applying for the space. This will give you a good look at their financial background and stability. You will be able to see if they have any prior experiences with bankruptcy or liens, and probably the most important part, verify the legitimacy of this business. If it’s a very small or very new business, then they may not have an available credit report. In this case, it’s always possible to pull a credit report on the principal of that business and see how creditworthy they are. If they have a long history of not paying their bills or have even been sent to a collection agency, then you may want to pump the brakes on letting them occupy your space.
One good thing to note is that background checks aren’t just for individuals applying for a job. Have you ever heard of a business being involved in illegal activities or have bad press out there? Yeah, me too. You can be the judge in what the tolerance level for risk is in your commercial space, but the most important thing is simply knowing who your tenants are. It is possible they have been placed on certain federal watch lists that would prohibit you from doing business with them. For example, if you are caught involved with a business or individual that has found themselves on the OFAC list, then you could be facing some heavy fines.
To sum up, why you should be screening your commercial tenants, I would say it’s all about confirming the known and revealing the unknown. You can think you know everything you need to know about a business or individual, but until you vet them yourself, then you will never be for sure. It will be a good feeling to know that you did your due diligence in screening your tenants and that you have quality people in your space. And if, or when, you do come across a bad egg, you will be glad you screened them.
Blake Browder | Account Executive, CIC Screening | 327 Caldwell Dr. Suite 100 Goodlettsville, TN 37072 | email: firstname.lastname@example.org cell: