Cyber Rentals

What Landlords Can Ask For

State and federal statutes relating to residential agreements often restrict what a landlord might request from a potential tenant. Due to the fact that such information is generally uniform and limited in scope, residential applications easily adapt to Internet forms.

Internet residential-rental applications have all the elements of traditional residential-rental applications, in particular:

• The identification of the property of interest;
• The rental cost of that property;
• When occupancy is contemplated; and
• The applicant's name, address, date of birth, Social Security number and driver's license number.

Typically, the applicant is required to list every place he or she has lived for at least the last 3 years, as well as employment information and other revenue sources. The applicant is also required to list all vehicles that may be parked at or near the property.

The renter must also disclose whether he or she:

• Has renter's insurance;
• Has ever been evicted from a property or declared bankruptcy; and
• Has ever been convicted of a felony.

The application also usually asks for personal references, credit and banking information.

Like a traditional rental application, an Internet application will request confirmation that the information is true, correct and complete. The application will also request authorization to verify the information provided, including permission to conduct a credit report.

Traditional rental applications and Internet applications typically require a processing fee that must be paid in advance. Both normally come with notices that the applicant agrees to execute the lease or rental agreement if approved, that the property will be occupied only by the person named in the application and that the application fee is neither a deposit nor rent, and will not be applied to future amounts due or refunded, even if the application is declined. Each type of application also usually contains a notice that the applicant understands that the landlord may terminate any rental agreement entered into for any misrepresentation, no matter when the misrepresentation is discovered. They also contain general notices required by law, such as that the property owner strictly adheres to all fair housing laws, gross income must be approximately three times the rent amount; the application fee is non-refundable; etc.

Completing the Deal

While the content of Internet and traditional residential agreements is similar, their execution, fee payment and validation are not. Traditional applications are executed with a traditional signature. Internet applications take advantage of the Electronic Signatures in Global and National Commerce Act (e-Signature Act) and are executed with a digital signature.

The e-Signature Act is a broad and general statement that contracts cannot be invalidated simply because they are in a digital form. The act states that an electronic contract, signature or record is legally equivalent to a hard-copy contract, signature or record. But the act does not detail the technical requirements of an electronic or digital signature, and does not recommend implementation models. This allows landlords a range of options for obtaining electronic signatures.

Electronic signatures use a variety of methods and are created using different technologies. The Internet can communicate only digitalized data, so ultimately all electronic signatures must be reduced to that form.

Two of the most common ways of electronically signing a residential application are:

• By signing the paper in pen, then scanning the paper for attachment and transmission; and
• By placing on the application, where it would normally be signed, a symbol composed of numbers or letters ' or both ' between two forward slashes.

The U.S. Patent and Trademark Office has accepted the second method. For more details concerning information on signature requirements, see, Trademark Rules 2.119(e); 2.193(c); Patent and Trademark Rule 10.18; Fed. R. Civ. P. 11; and TBMP ”106.02, 203.03, 309.02, 311.01, 502.04, 527.02, 1202.03.

Please note, though, that the second method requires proper notice to the potential tenant. Failure to provide such tenant-notice provisions in an appropriate form and location may result in an unenforceable application. Ideally, the notice should detail the significance of the transaction and be proximate to the location of the part of the Internet form that requests the electronic signature.

Payment Methods Vary

Traditional application fees are paid by check submitted with the application. Internet applications are normally paid by credit card. To ensure proper payment, Internet applications normally require the credit card number, the expiration date, and the 3- or 4-digit security code appearing on the back or front of the credit card.

Caution should be used, because the request for credit-card information may make the landlord vulnerable to legal difficulties associated with negligence, unless certain technical precautions are taken. While no standard of action is dictated by statute, the industry recognizes that Internet applications involving credit-card information should use secure sockets layer (SSL) technology, which encrypts credit-card data while it is being transferred. The use of SSL ensures that credit card number-related information is scrambled and locked with a mathematical key during transfer.

Traditional applications are validated by hand, meaning that a representative of the prospective landlord, or the landlord him- or herself, reviews the application. Internet applications, on the other hand, normally take advantage of electronic validation, a type of validation that varies by software application, but that normally includes an electronic confirmation that an entry has been made for all mandatory fields and specific items ' such as phone numbers, ZIP codes and drivers' license numbers ' are the proper length.

Internet verification normally involves the communication and maintenance of personal information that may be used for Internet identity theft. That means that, as in the case of the landlord's communication and maintenance of credit-card data, electronically verified applications must be handled so as to reduce or eliminate negligence-related legal difficulties.

The non-technical and technical worlds may reflect each other, but they're different realms, with different realities, regulations, potential pitfalls and preventive measures that should be taken to ensure that all parties concerned are protected and their rights are preserved.

The Internet has profoundly changed the way real-estate rental transactions are executed, mostly for the better. Besides putting significant amounts of rental information into the hands of potential tenants and allowing virtual tours of available rental properties, the Internet allows prospective renters and landlords to submit rental applications and negotiate contracts online. Properly executed, an Internet real-estate rental application may save time and money for the potential tenant and landlord. Improperly executed, such an application may result in legal difficulties, including unenforceable contracts and negligence claims.

Internet real-estate rental applications, like traditional applications, are either commercial or residential in nature. Residential and commercial property transactions normally are initiated by an application and result in an agreement to create a contractual relationship between the tenant and the landlord, providing space in exchange for consideration. The terms of a residential transaction, however, are normally subject to more governmental regulation than a commercial agreement typically is.

Residential agreements are largely regulated by statute. That being the case, relatively few terms are negotiable. A commercial agreement, however, generally is not limited by governmental regulations, and parties may negotiate all terms. Consequently, in a commercial lease, the tenant may be responsible for maintaining the building, grounds, heat and electricity, and paying for insurance and real estate taxes. The landlord's relationship with the tenant in that instance is limited to receiving the rent.

What Landlords Can Ask For

State and federal statutes relating to residential agreements often restrict what a landlord might request from a potential tenant. Due to the fact that such information is generally uniform and limited in scope, residential applications easily adapt to Internet forms.

Internet residential-rental applications have all the elements of traditional residential-rental applications, in particular:

• The identification of the property of interest;
• The rental cost of that property;
• When occupancy is contemplated; and
• The applicant's name, address, date of birth, Social Security number and driver's license number.

Typically, the applicant is required to list every place he or she has lived for at least the last 3 years, as well as employment information and other revenue sources. The applicant is also required to list all vehicles that may be parked at or near the property.

The renter must also disclose whether he or she:

• Has renter's insurance;
• Has ever been evicted from a property or declared bankruptcy; and
• Has ever been convicted of a felony.

The application also usually asks for personal references, credit and banking information.

Like a traditional rental application, an Internet application will request confirmation that the information is true, correct and complete. The application will also request authorization to verify the information provided, including permission to conduct a credit report.

Traditional rental applications and Internet applications typically require a processing fee that must be paid in advance. Both normally come with notices that the applicant agrees to execute the lease or rental agreement if approved, that the property will be occupied only by the person named in the application and that the application fee is neither a deposit nor rent, and will not be applied to future amounts due or refunded, even if the application is declined. Each type of application also usually contains a notice that the applicant understands that the landlord may terminate any rental agreement entered into for any misrepresentation, no matter when the misrepresentation is discovered. They also contain general notices required by law, such as that the property owner strictly adheres to all fair housing laws, gross income must be approximately three times the rent amount; the application fee is non-refundable; etc.

Completing the Deal

While the content of Internet and traditional residential agreements is similar, their execution, fee payment and validation are not. Traditional applications are executed with a traditional signature. Internet applications take advantage of the Electronic Signatures in Global and National Commerce Act (e-Signature Act) and are executed with a digital signature.

The e-Signature Act is a broad and general statement that contracts cannot be invalidated simply because they are in a digital form. The act states that an electronic contract, signature or record is legally equivalent to a hard-copy contract, signature or record. But the act does not detail the technical requirements of an electronic or digital signature, and does not recommend implementation models. This allows landlords a range of options for obtaining electronic signatures.

Electronic signatures use a variety of methods and are created using different technologies. The Internet can communicate only digitalized data, so ultimately all electronic signatures must be reduced to that form.

Two of the most common ways of electronically signing a residential application are:

• By signing the paper in pen, then scanning the paper for attachment and transmission; and
• By placing on the application, where it would normally be signed, a symbol composed of numbers or letters ' or both ' between two forward slashes.

The U.S. Patent and Trademark Office has accepted the second method. For more details concerning information on signature requirements, see, Trademark Rules 2.119(e); 2.193(c); Patent and Trademark Rule 10.18; Fed. R. Civ. P. 11; and TBMP ”106.02, 203.03, 309.02, 311.01, 502.04, 527.02, 1202.03.

Please note, though, that the second method requires proper notice to the potential tenant. Failure to provide such tenant-notice provisions in an appropriate form and location may result in an unenforceable application. Ideally, the notice should detail the significance of the transaction and be proximate to the location of the part of the Internet form that requests the electronic signature.

Payment Methods Vary

Traditional application fees are paid by check submitted with the application. Internet applications are normally paid by credit card. To ensure proper payment, Internet applications normally require the credit card number, the expiration date, and the 3- or 4-digit security code appearing on the back or front of the credit card.

Caution should be used, because the request for credit-card information may make the landlord vulnerable to legal difficulties associated with negligence, unless certain technical precautions are taken. While no standard of action is dictated by statute, the industry recognizes that Internet applications involving credit-card information should use secure sockets layer (SSL) technology, which encrypts credit-card data while it is being transferred. The use of SSL ensures that credit card number-related information is scrambled and locked with a mathematical key during transfer.

Traditional applications are validated by hand, meaning that a representative of the prospective landlord, or the landlord him- or herself, reviews the application. Internet applications, on the other hand, normally take advantage of electronic validation, a type of validation that varies by software application, but that normally includes an electronic confirmation that an entry has been made for all mandatory fields and specific items ' such as phone numbers, ZIP codes and drivers' license numbers ' are the proper length.

Internet verification normally involves the communication and maintenance of personal information that may be used for Internet identity theft. That means that, as in the case of the landlord's communication and maintenance of credit-card data, electronically verified applications must be handled so as to reduce or eliminate negligence-related legal difficulties.

The non-technical and technical worlds may reflect each other, but they're different realms, with different realities, regulations, potential pitfalls and preventive measures that should be taken to ensure that all parties concerned are protected and their rights are preserved.