When you are in the business of renting properties, there naturally comes a time when you must reject an applicant. There can be a number of reasons why you might reject a rental application. Perhaps there are concerns from the applicant's background or credit check. Maybe the number of people listed on their application exceeds the unit's maximum occupancy. Or, maybe they have a pet when you have a strict no-pet policy. Whatever the case may be, when you need to reject a rental applicant, you need to know how to do it without opening yourself up to liability.
No one ever wants to hear the word no. Unfortunately, when you are a landlord and you tell a tenant no, unless you are able to demonstrate that you have followed fair housing laws, that no could result in fines and litigation. In order to maintain your business, you need to know how to protect yourself. Following the tips below can help to guide you in this matter. These tips should not be construed as legal advice. You should always consult with your attorney for legal advice on rejecting a rental application.
First and foremost, it is important that you be upfront and honest regarding the reason for issuing the rejection. There is sometimes a tendency to try to ease a rejection by beating around the bush. Although it is commendable that you might not want to hurt an applicant's feelings, for your own protection, you need to provide them with the real reason for the rejection. Not only will this protect you, but it will also help them to understand the situation so they can make improvements when applying for other rentals in the future.
Dealing with Credit Reports
One of the most common reasons for rejecting a rental application relates to issues with credit reports. When this is the case, you are legally bound to inform the applicant of this. Not only must you tell them that their credit was the problem, but you must also provide them with the name of the credit reporting agency that gave you the relevant information. This will allow the applicant to dispute the relevant credit report, if they wish to do so. Keep in mind that in order to protect yourself, you must use the same credit guidelines for all applicants. Do not make exceptions.
Documentation is King
Before you even consider issuing a rejection, make certain that the applicant in question has signed the necessary authorization for you to complete a background check. This should include providing permission for a credit check to be performed and for references listed on the application to be contacted.
Make certain that you keep documentation of any and all contact you have with the applicant in question. This is an excellent way to prove that you did not violate the law in any way when you must issue a rejection.
Rejecting an applicant is never pleasant or easy. It is; however, part of the job. Understanding how to do it without leaving yourself liable for legal action is critical.
Disclaimer: The common sense tips in this blog entry should not be construed as legal advice. These are guidelines that will help you as a landlord, property manager, or tenant screening provider. Local laws and regulations may differ in your area. Be sure to consult with an attorney before rejecting an applicant and ensure you are following fair housing laws.