Tenant Screening Guide South Africa

Complete guide to tenant background checks for landlords and letting agents. Learn how to verify tenant identity, check credit history, confirm employment, and ensure FICA compliance for property rentals.

Screen Tenants Now FICA for Estate Agents

87%

Bad Tenant Risk Reduction

30%

Max Rent-to-Income

5 Years

FICA Record Retention

24-48h

Full Screening Time

1. Why Screen Tenants?

Thorough tenant screening is essential for protecting your property investment and ensuring a successful rental relationship. In South Africa, the eviction process can take 3-6 months and cost thousands in legal fees and lost rent.

Benefits of Screening

Reduce risk of non-payment
Prevent property damage
Avoid costly evictions
Ensure FICA compliance
Protect other tenants

Risks Without Screening

Rental arrears (average R20k+)
Property damage costs
6+ month eviction process
Legal fees (R15k-R50k+)
FICA non-compliance penalties

2. The Screening Process

A comprehensive tenant screening should cover all aspects of the applicant's identity, financial situation, and rental history.

ID Verification

ESSENTIAL

Verify the applicant's identity against official records to prevent identity fraud.

Steps:

Collect copy of South African ID or passport
Verify against Home Affairs database
Compare photo to applicant (in-person or selfie)
Confirm name spelling and ID number
For foreigners: verify work/residence permit

Red Flags:

ID document appears altered
Photo doesn't match applicant
ID number fails verification
Deceased status flagged

Credit Check

ESSENTIAL

Review credit history and payment behaviour to assess financial reliability.

Steps:

Obtain written consent from applicant
Request report from TransUnion, Experian, or XDS
Review credit score and payment history
Check for judgments, defaults, and debt review
Verify debt-to-income ratio

Red Flags:

Multiple recent judgments
Currently under debt review
Fraudulent activity alerts
High outstanding debt relative to income
Frequent late payments

Employment Verification

ESSENTIAL

Confirm employment status and income to ensure affordability.

Steps:

Collect recent payslips (3 months)
Verify employer contact details independently
Contact HR/payroll to confirm employment
Confirm job title and duration
Request salary confirmation letter

Red Flags:

Employer contact doesn't verify
Payslips appear fraudulent
Very recent employment start
Income insufficient for rent

Rental History

HIGH

Contact previous landlords to assess tenant behaviour and payment history.

Steps:

Request previous landlord references
Verify landlord identity (not a friend)
Ask about payment consistency
Ask about property condition upon departure
Ask about any lease violations

Red Flags:

Unable to provide references
Previous eviction history
Property damage claims
Frequent late payments
Lease violations

Affordability Assessment

ESSENTIAL

Ensure the applicant can comfortably afford the rental amount.

Steps:

Calculate gross monthly income
Apply 30% affordability rule (rent ≤ 30% of income)
Consider existing debt obligations
Verify income stability
Assess additional costs (utilities, parking)

Red Flags:

Rent exceeds 40% of income
High existing debt payments
Irregular income patterns
Multiple income sources unverified

Criminal Record Check

RECOMMENDED

Screen for relevant criminal history with applicant consent.

Steps:

Obtain explicit written consent
Request police clearance certificate
Or use authorized screening provider
Focus on relevant offences only
Document check and findings

Red Flags:

Fraud or theft convictions
Property-related crimes
Violent offences
Outstanding warrants

3. Documents Required

Tenant Application Checklist

Completed application form

Certified copy of ID/passport

Proof of residence (utility bill)

Latest 3 months payslips

Bank statements (3 months)

Employment confirmation letter

Previous landlord reference

Consent for credit check

Marriage certificate (if applicable)

Work permit (foreign nationals)

Company documents (if business tenant)

* Required documents

4. FICA Compliance for Estate Agents

Estate agents are Schedule 1 accountable institutions under FICA and must comply with customer due diligence requirements for all property transactions, including rentals.

When FICA Applies

FICA compliance is required when you act as an intermediary in property transactions. This includes sales, rentals, and lease renewals. You must verify both the tenant AND landlord's identity.

Customer Identification

Section 21

Collect and record prescribed information from all parties.

Full names of tenant and landlord
Date of birth and ID number
Residential address
Contact information
For companies: registration details, directors

Identity Verification

Section 21

Verify identity using reliable, independent sources.

Verify ID against Home Affairs
For companies: verify CIPC registration
Document verification method
Keep copies of ID documents

Record Keeping

Sections 22-23

Maintain records for at least 5 years.

Keep copies of all identification documents
Maintain transaction records
Document verification steps
Store records securely
Ensure easy retrieval

Suspicious Activity Reporting

Section 29

Report suspicious transactions to FIC.

Train staff to recognise red flags
Report cash payments >R24,999.99
File STRs within 15 days of suspicion
Maintain confidentiality (no tipping off)

5. POPIA Considerations

When collecting personal information from tenants, you must comply with the Protection of Personal Information Act (POPIA).

POPIA Requirements for Tenant Screening

Consent: Obtain written consent for credit checks and reference verification
Purpose: Only collect information necessary for tenant assessment
Security: Store personal information securely
Retention: Keep records only as long as necessary (FICA requires 5 years)
Access: Allow applicants to access and correct their information

6. Red Flags to Watch For

Identity Concerns

ID doesn't match applicant
Documents appear tampered
Reluctance to provide ID
Inconsistent information

Financial Concerns

Income too good to be true
Can't verify employment
Wants to pay cash upfront
Excessive urgency to move in

Reference Concerns

No previous landlord references
References can't be verified
Vague answers from referees
Gap in rental history

Behavioural Concerns

Avoids viewing property
Pressures for quick decision
Won't sign consent forms
Stories don't add up

7. Making the Decision

Scoring Matrix

Factor	Weight	Ideal Score
ID Verification	Pass/Fail	Must pass
Credit Score	25%	>650
Affordability (rent-to-income)	25%	≤30%
Employment Stability	20%	>12 months
Rental History	20%	Positive references
Criminal Record	10%	Clear

8. Rejecting Applicants Legally

When rejecting a tenant application, you must act fairly and avoid discrimination based on protected characteristics.

You Cannot Reject Based On:

Race, gender, or ethnicity
Religion or political beliefs
Pregnancy or family status
Sexual orientation
Disability (unless property is genuinely unsuitable)

You CAN Reject Based On:

Failed ID verification
Poor credit history
Insufficient income/affordability
Negative landlord references
Previous evictions
Relevant criminal history
Fraudulent information

Best Practices When Rejecting

Apply criteria consistently to all applicants
Document your reasons
Notify applicant promptly
If credit-based, inform them of right to dispute
Return application documents

9. Frequently Asked Questions

What checks should I do on a tenant in South Africa?

A comprehensive tenant screening should include: ID verification against Home Affairs, credit check with major bureaus, employment verification, previous landlord references, affordability assessment (rent should be ≤30% of income), and criminal record check (with consent). Estate agents must also comply with FICA requirements.

Do estate agents need to comply with FICA for rentals?

Yes, estate agents are Schedule 1 accountable institutions under FICA and must conduct customer due diligence (CDD) on all parties to rental transactions. This includes verifying tenant and landlord identities, keeping records for 5 years, and filing suspicious transaction reports if necessary.

Can I reject a tenant based on a credit check?

Yes, you can decline a tenant based on a poor credit record, but you must apply criteria consistently to avoid discrimination. If you reject someone based on credit information, you should inform them and give them the opportunity to dispute incorrect information with the credit bureau.

What credit score should a tenant have?

There's no universal minimum score, but generally a score above 650 is considered acceptable for most rentals. More important than the score is the payment history, existing debt obligations, and affordability (rent should ideally be 25-30% of gross monthly income).

How long does tenant screening take?

With automated verification tools, basic ID and credit checks can be completed within minutes. Full screening including employment verification and landlord references typically takes 24-48 hours. Manual processes can take 3-5 business days.

Related Resources

ID Verification

FICA Guide

POPIA Guide

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