By the time the resident’s balance had reached several thousand dollars, the management team had no choice but to start eviction proceedings. That was in April 2011, after the resident had already lived in the Dallas community for several months.
Over the next 120 days or so, on-site personnel watched in dismay as the resident came and went in her car, a sleek, late-model Jaguar, with little apparent concern that her crystal, fine china, and urbane furnishings would end up on the street. Perhaps her carefree attitude came from a well-developed knowledge of eviction proceedings.
When the property’s lawyers filed the eviction, the resident immediately countered with a pauper’s affidavit, buying time to keep living in the unit as her case wended its way through the courts. As the case proceeded, lawyers discovered that the resident had employed similar tactics at past residences. Even when the community won permission to proceed with the writ and reclaim its property—in August, four months after starting eviction proceedings—the resident was unfazed.
“She knew the system better than most attorneys,” says Linda Willey, a director at Houston-based Camden Property Trust, the community’s owner. “Every time our lawyers would file a form, she’d answer it in a day. When we finally got the writ approved, she intimidated the constable so much he almost halted the process right there.”
Camden’s experience in Dallas is a scenario that plays itself out at communities across the country with unsettling frequency.
For sure, not all residents who end up in eviction proceedings do so with a calculated strategy. Some simply become victims of circumstance, as a job suddenly ends, or unexpected medical bills pile up. But for a subset of renters known as “serial skippers,” the above sequence of events is simply a means to an end, a way to live in relative comfort without having to pay for it.
“A serial skipper is someone who continuously leaves apartments owing money, or skips without notice, breaking a lease, and then gets into another apartment before the owner can find out they owe money at another apartment,” says Chris Jenkins, vice president of financial planning at Chicago-based Equity Residential, who, like most experienced multifamily pros, has seen the premeditated moves of skippers all too often. “It definitely still happens all the time.”
Fortunately for Willey and Jenkins, increasingly robust software tools for the multifamily industry are providing up-to-the-minute rental histories on potential residents and are helping block serial skippers from getting through the door. What’s more, these tools are making it easier to collect on outstanding debt when skippers try to rent down the road, since they have to clear what they owe before the new community will take them.
“It’s hard to say how big of a problem it was before, because there really wasn’t any way to track it,” says Jenkins, who uses rental-history data from Costa Mesa, Calif.–based Experian RentBureau to screen potential residents. “But now that we can, it makes a huge difference.”
One of multifamily’s most stubborn problems has been that evictions don’t show up on an individual’s credit report until the proceedings are final. During the multimonth period it usually takes to force someone to leave an apartment, that individual may appear squeaky clean to the next manager evaluating them. Even outstanding rent might not show up as a black mark until a property manager turns the account over to collections after trying to recoup it internally. That usually takes 30 to 45 days, more than long enough for the person to move on.
“It’s completely different from the way the financial services industry does things,” says Brannan Johnston, vice president and managing director at Experian RentBureau, which provides rental-history data to rental screening companies in the multifamily industry. “If you’re late on a credit card, it permeates as soon as the credit card company reports it to the credit bureaus. Since everyone is pulling credit pretty much constantly to monitor new applications as well as their existing client base, that information gets disseminated very quickly.”
Experian RentBureau automatically pulls up-to-the-minute rental-history data on 8 million residents daily by integrating into the property management systems at communities across the country. If a skipper shows up at someone else’s property that’s also on the system the next day, they will already have been flagged.
The firm doesn’t provide resident screening services, per se. Instead, it provides rental-payment data to other screening services, such as Santa Barbara, Calif.–based Yardi RentGrow Screening; Campbell, Calif.–based On-site.com; Houston-based AmRent; and even Experian competitor TransUnion, based in Chicago. Rental history is becoming part of other tracking tools, too. RealPage’s LeasingDesk resident-screening program, for example, pulls rental-payment data from the Carrollton, Texas–based firm’s OneSite Property Management tool.
Managers say having access to that payment history is critical to making leasing decisions, because it shows what residents do, instead of just a credit score that indicates what they might do. But bad rental-payment flags could soon start hitting credit reports, too. Experian was the first credit agency to list on-time rent payments as a part of consumer credit reports and now plans to start listing negative rent-payment history on credit checks. And Minneapolis-based Fair Isaac Corp., which produces FICO scores, has teamed up with Santa Ana, Calif.–based CoreLogic, maker of CoreLogic SafeRent Screening software, to incorporate leasing history, as well as evictions or collections notices, into a numerical score.
All of that should help operators avoid the nightmare scenario of letting serial skippers into a community in the first place and then trying to collect from them after their charade is up. With such effective targeting technologies now available, multifamily may finally be getting a leg up on serial skippers.
Contributing editor Joe Bousquin is based in Sacramento, Calif.