Pre-Leasing Investigation: Essential for Rental Property Owners' Peace of Mind

According to the Canada Mortgage and Housing Corporation (CMHC), nearly 28% of Canadian landlords report having suffered financial losses due to problematic tenants. Among those who perform no checks, this rate rises to over 50%!​

At Némésis, we receive calls every week from rental property owners living a real nightmare. The story is always the same: unpaid rents and/or a tenant abruptly leaving behind thousands of dollars in repairs. This leads to investigation fees to track down the faulty tenant in order to serve a demand letter or, later in the process, to locate them to execute the obtained judgment and recover the owed amounts.​

In the majority of these cases, a pre-leasing investigation could have prevented this kind of problem.

Choosing a Tenant: More Than Signing a Lease

Selecting a tenant is not just about signing a lease form. It means allowing a person into your most precious investment. A mistake can be costly—very costly—in time, stress, and money. That is why the pre-leasing investigation is not only a precaution measure but a true financial management tool that is simple, legal, and highly profitable.​

In this article, the components of a pre-leasing investigation are explained, along with why every savvy property owner should have one conducted before handing over the keys to a new occupant.

What Is a Pre-Leasing Investigation?

A pre-leasing investigation is a thorough analysis process aimed at verifying the identity, financial reliability, and behavioral history of a prospective tenant. It allows the landlord to obtain an objective and verifiable profile of the person who might occupy the unit.​

Unlike superficial checks done by some landlords (brief interview, call to the current landlord, and copy of ID), a pre-leasing investigation conducted by a private investigation agency offers professional rigor and deeper analysis, all in compliance with privacy laws and personal information protection.​

Specifically, the pre-leasing investigation combines several components:

• Identity confirmation.

• Credit report verification.

• References from current and previous landlords.

• Employment and income verification.

• Criminal records.

• Administrative Housing Tribunal records.

• Online behavior verification.

The goal is never to "trap" the tenant but to give the landlord the ability to make an informed decision based on facts.

Identity Confirmation: The Foundation of Every Investigation

This may seem obvious, but confirming that the candidate is truly who they claim to be is a crucial step.

Why? Because some individuals with a history of non-payment, eviction, or judicial records might try to hide their real identity or provide falsified documents.

An Equifax study reveals that 15% of rental applications contain at least one falsified piece of data.​

A simple verification allows:

• Confirmation of ID validity.

• Verification of provided information accuracy.

• Elimination of fraud or identity theft risks.

A landlord cannot afford to base a financial decision on unreliable information. This step eliminates that risk from the start.

Credit Report Verification: Financial Reliability at a Glance

The credit report is one of the most reliable indicators for predicting whether a candidate will pay rent on time and consistently.

A full credit analysis includes:

• Credit score.

• Outstanding debts.

• Payment delays.

• Delinquent accounts.

• Bankruptcies.

• Collections.

• Overall financial stability.

Contrary to common belief, it's not just the score that matters. A professional investigator interprets the report to understand the context, as poor credit can sometimes be explained, while an excellent score might hide other issues.​

According to a TransUnion study, individuals with debt exceeding 40% of their income are three times more likely to accumulate rent payment delays in the following 18 months.​

An unstable tenant poses risks:

• Recurrent payment delays.

• Hard-to-recover arrears.

• Lengthy and costly legal procedures.

• Significant financial losses.

A pre-leasing investigation allows the landlord to avoid being in a position of "hoping" the tenant will meet their obligations.

References from Current and Previous Landlords

Many landlords settle for calling the candidate's current landlord. The problem? If the tenant is problematic, the current landlord might be eager to get rid of them... and thus enthusiastically recommend them to you. Another issue: the tenant providing a friend's phone number to pose as their landlord and give an excellent reference.

That is why we validate:

• Land registry to identify the true landlord.

• Accuracy of previous addresses.

• References from prior landlords—those with nothing to lose!

• Duration of previous tenancies.

• General behavior (rule compliance, noise, neighbor relations).

• Condition of the unit upon tenant departure.

• Payment delays or defaults.

• Special agreements (partial payments, legal actions, eviction notices).

This step is often revealing. A tenant may have a flawless pitch and acceptable credit but display problematic housing behavior. A pre-leasing investigation ensures the person will respect your building and other tenants.​

Employment and Income Verification

Whether the tenant is an employee, self-employed, or seasonal worker, they must demonstrate the means to pay the rent for the desired unit.

The verification by an investigator includes:

• Confirmation of current employment.

• Employment status (permanent, temporary, full-time or part-time).

• Length of employment.

• Estimated income.

• Compatibility between income and rent cost.

• Consistency of provided information.

A simple rule: a tenant must have solid and steady financial capacity. Unstable or hard-to-verify income can become a risk, especially if rent represents too large a share of their monthly finances.​

Judicial Records: An Element Not to Overlook

While anyone can go through tough times, certain judicial records can pose a real risk to the building or neighbors' peace.

Verifications focus notably on:

• Criminal and penal records.

• Violence or sex crime offenses.

• Economic crimes or fraud-related.

• Offenses compromising safety.

The goal is not to judge a candidate but to protect your investment, health, reputation, and other tenants.​

Administrative Housing Tribunal Verification

This is one of the most valuable elements for a landlord. A search at the Administrative Housing Tribunal (TAL) will reveal, if applicable:

• Decisions for non-payment.

• Eviction notices.

• Repeated disputes.

• Disruptive behaviors.

• Major unit damages.

• Building rule violations.

A tenant with multiple unfavorable decisions represents a very high risk. An investigator can spot these files even when the candidate tries to minimize or omit them voluntarily.​

Other Relevant Verifications

Depending on the candidate's profile, other elements may be checked:

• Residential stability.

• Validity of provided information.

• Online reputation.

• Verification of suspicious or altered documents.

• Detection of inconsistencies or contradictions.

Each file is unique. The investigator's role is to adapt the analysis depth to the potential risk level.

How Much Does a Pre-Leasing Investigation Cost?

A pre-leasing investigation typically costs between $40 and $85 per candidate, depending on the extent of verifications.

At Némésis, three types of pre-leasing investigations are offered, from basic credit check to full investigation of the potential tenant(s), including all previously listed verifications.​

Pre-Leasing Investigation: A Wise Investment

Some landlords still hesitate to pay for a pre-leasing investigation, thinking they save a few tens of dollars. Ironically, these are often the same ones who later pay thousands in financial losses.

According to the Quebec Landlords Association (APQ), a defaulting tenant costs on average $3,500 to $7,000 per file. A professional pre-leasing investigation costs... a tiny fraction of that!​

Avoid Unpaid Rents

A single month of lost rent far exceeds the cost of a pre-leasing investigation. But often, a defaulting tenant accumulates several months of unpaid rents, generating procedure fees, court trips, stress, and endless delays.

Each year at the AHT, nearly 70% of applications concern rent non-payments. Most involve tenants already known for prior delays. A quality investigation helps select a tenant who will actually pay.​

Protect Your Building's Condition

A unit left in poor condition can cost hundreds or thousands of dollars: painting, cleaning, floors, repairs, appliance replacements, wall damage, etc.

By verifying a future tenant's reliability, these risks are significantly reduced.

Reduce Tenant Turnover

A good tenant often stays longer. Each tenant change involves:

• Revenue losses while the unit is vacant.

• Time for ads, visits, and selection.

• Cleaning and repair fees.

The investigation helps choose a stable, respectful, and long-term tenant.

Save Time and Energy

Time spent managing a problematic tenant is lost time.

A pre-leasing investigation frees you from future worries and lets you manage your building as an investment—not a stress source.

Conclusion: The Pre-Leasing Investigation Is Your Best Insurance

Owning a rental property is profitable... provided you choose the right tenants. A pre-leasing investigation enables an informed, objective, and professional decision based on verified data.

Signing a lease means entrusting your assets to a stranger. For a few tens of dollars, substantial financial losses can be avoided. The question is not "Can I afford a pre-leasing investigation?" but "Can I afford not to?"

Némésis offers criminal profiling services, polygraph testing, investigation, and investigative analysis to Quebec police forces, legal professionals, as well as any entity or citizen requiring specialized expertise in private investigation.