The Fair Housing Act makes it illegal to refuse to rent based on an applicant’s race, color, national origin, religion, sex, family status, or disability. In addition, many states have laws that include other statuses, such as sexual orientation and marital status. The key to avoiding Fair Housing Act issues is to have a clear policy that is fairly and consistently applied. Set minimum qualifications criteria and apply the criteria equally to all applicants.
How to Qualify and Deny Rental Applicants
As an independent landlord, it’s essential to make the right tenant decision before signing a rental agreement. Before advertising your rental property create a document listing your qualifications requirements. Give printed copies to applicants when showing the property.
Typical criteria include the following…
- Healthy Credit History
- Clean background check.
- Clean Eviction History
- Stable Employment History
- Sufficient Income
- Positive Landlord and Employer Reference Checks. …
- Poor credit check
When notifying an applicant of any denial or other action concerning their application, you should be sure to follow all relevant laws. Check with an attorney if you’re unsure of how to handle declining an applicant.
Choose a Fair Method of Selection
When multiple applicants meet the criteria, choose them fairly. Make sure you pick one selection method to use consistently when you’re faced with multiple qualified tenants. That way, your documentation is consistent and it doesn’t look like you made unfair exceptions for specific tenants. Also, send a letter to the tenants who applied for but did not get the rental property. If they failed to get the property due to their credit score, you must let them know because of The Fair Credit Reporting Act. If they were denied for other reasons, explain those reasons in your letter and clearly state the criteria used to make your decision.
The following options are both good practices…
- First Come, First Served – The first applicant that meets the landlord’s chosen criteria gets the first choice to rent the apartment. While the method is the simplest, it may mean the most qualified applicant doesn’t get the rental.
- Sort Based On Application Strength and Accept the First That Is Verified – In general, landlords are looking for tenants who will be able to pay rent consistently, who will treat their units with care, and who will be trouble-free neighbors. When two applicants qualify you may prefer one qualified applicant if he or she exceeds the minimum requirement. For example, one may have an outstanding rental history and a higher income than the other. In that situation, you may offer a lease to that applicant. Just make sure you document your file for the reason he or she was more qualified than the other.
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