Halloween is certainly the time of year for nightmares, but your commercial tenants don’t have to contribute to the seasonal fright. As a commercial real estate owner or property management company, you are bound to be confronted with unqualified applicants. But if you want to avoid leasing to unreliable commercial tenants who have misrepresented themselves on their documents, is important to incorporate certain methodologies into your commercial leasing application process.
Continue reading for some tips that can help you avoid nightmare commercial tenants, plus where to find Central Indiana tenant improvement construction services that will improve your business’s overall success.
Watch Out for Commercial Tenant Fraud
Unfortunately, commercial tenant fraud is all too common. Commercial tenants who commit tenant fraud misrepresent their qualifications or forge documents to present themselves as a qualified applicant for space, such as a retail store, office, or studio. After being approved for the lease, fraudulent commercial tenants often skip out on rent, damage the property, misuse the commercial space, or pose a plethora of tenant challenges and commercial landlord nightmares.
In order to deter commercial tenant fraud and application falsifications, you need to learn how to detect such fraud early on in the leasing and application process. Here are some tips that can help you avoid leasing to a nightmare commercial tenant, while keeping your commercial rental property business profitable:
Do Not Offer Online Application
It is not recommended to use an online application process for commercial leasing, even if you use a third-party platform. Many business application management websites say they will bring in all sorts of qualified commercial tenant applications, but their algorithms are basic and not comprehensive enough to weed out intentional fraud. When it comes to commercial leasing, it is best to always incorporate an in-person application and interview process to ensure that you are leasing to the right tenant.
Do Not Accept Incomplete Applications
There is not much to be said here. If you receive any commercial lease applications that are not filled out completely, shred them without giving them a second thought. An incomplete application is often a telltale sign of commercial tenant fraud. In most cases, applicants fail to complete the application because they are intentionally omitting information to avoid being investigated or denied tenancy.
Always Perform Credit and Reference Checks
Your commercial building or multi-housing property is an important investment that should only be entrusted to those who are dependable and qualified. For this reason, it is important to always perform credit checks and reference checks on all commercial tenant applications. It is common for commercial property owners to ignore references, but this is not a mistake you want to make. References are often more telling than a credit or income check, so be sure you do not skip this step during the commercial tenant screening process.
Advertise Background Checking
It is important to let all of your commercial applicants know that there will be a comprehensive background check during the application process. Advertise this information in the literature that advertises your commercial space openings. This way, tenants know they cannot hide anything or present themselves in a misleading way.
Advertise a Fraud Warning and Declaration
Along with advertising that a background check will be performed on each applicant, it is also important to advertise a fraud warning. A fraud warning will let potential applicants know that there are serious legal penalties and consequences for cheating or misleading their qualifications on their commercial leasing application. This is a great way to thwart commercial tenant fraud. Along with the fraud warning, it is important to include a declaration on the application. A declaration is a statement placed above the signatures of the applicants confirming that all information is accurate to their knowledge.
Require Supplemental Documentation
When you are getting proof of a commercial tenant’s income, it is important to also require supplemental documentation. Ask for more than one type of documentation to prove income when screening a potential commercial tenant.
Verify Identity With a Valid Photo ID
As a commercial building owner or property management company, you want to be sure that you are leasing to the person who is actually filling out the application. It is important to verify a person’s identity by checking their photo ID, or any other authorized identification documents, such as United States passport or military ID. Online applications present all sorts of opportunities for tenants to fraudulently upload their identity or use another person’s identity.
Are you looking for a qualified construction company to perform tenant improvement work to your commercial property? Contact BAF Corporation at 317-253-0531 for professional tenant improvements and remodels in Indianapolis, Indiana. We serve all corporate, commercial, and industrial industries in Central Indiana.