Tenant Screening as a Compliance Tool
One of the reasons why tenant screening needs to be carried out by landlords is to minimize the potential of landlord liability as in cases of infringement of Intellectual Property Rights in Indonesia.
Article 10 of the Copyright Law states that Managers of business premises are prohibited from allowing the sale and/or reproduction of goods resulting from Copyrights and/or Related Rights infringements in the location under their management.
Should a tenant in a mall is reported by the owner/copyright holder for violating Copyright Law, the owner or manager of the mall can be held accountable as they violated the Article 10 and can be subject to Article 114, which states:
Every Person managing business premises in all its forms who deliberately and knowingly allows the sale and/or duplication of goods resulting from infringement of Copyright and/or Related Rights in the premises that they manage as referred to in Article 10 shall be sentenced with a maximum fine of Rp100,000,000.00 (one hundred million rupiahs).
Tenant Screening Necessary
One way to avoid potential violations of Article 10 is to conduct tenant screening. Tenant screening is an important process in property rental that needs to be carried out by the landlords. Tenant screening ensures that potential tenants are eligible to inhabit the property.
Tenant screening can be carried out by both individual property landlords (boarding houses, apartment, and rented houses) and business property landlords (office spaces, shops, warehouses, etc.). There are at least five things that you need to check, which can be tailored as desired:
- Criminal check. This examination is carried out to ensure that prospective tenants have no criminal records.
- Examination of company deeds
- Interview with the previous landlords to determine the track record, reputation and behavior of potential tenants.
- Credit score to reduce the risk of having tenants with financial issues.
Minimize The Risk
Based on the results of the screening, you as a property owner can detect if your prospective tenant’s business is involved in illegal activities. Working with the wrong tenant is costly.
Make sure you do screening. Integrity Indonesia has a comprehensive system in place to assist you in screening and conducting background checks on your potential tenants.