When you manage rental property, there will come a time when you have to reject a potential renter. Of course there are several valid reasons to turn down a renter, but discrimination is not among them. Be sure to follow all Fair Housing laws when corresponding to prospects and renters alike.

A landlord can lawfully reject an applicant for the following reasons:

• Lying on the credit application
• A criminal background check that revealed past records
• Poor credit history that falls below the landlord’s qualifications
• Insufficient income to pay the rent
• Past evictions
• Unable to meet terms set by the landlord such as a pet policy or occupancy standards

In order to deny renting to someone with one or more of these issues you will need to document that it exists. This will help prove your case should you need to in a court of law.

When informing a prospective renter of the application’s denial, you should provide a written rejection letter along with a verbal explanation. Although informing them verbally is not required, these applicants will need to look for another place to live so, it is courteous to inform them quickly. Landlords need to be concise and direct when explaining why the renter was denied. Being vague and trying to not sound mean can lead to trouble and discrimination claims.

Landlords should keep copies of denied applications and rejection letters for at least 5 years. You should always be prepared if a former applicant chooses to file a claim against you stating discrimination took place. Good record keeping will keep you from getting into “he said, she said” arguments and help you easily explain the situation to a judge. If a renter is denied based on the credit application / score, he or she is entitled to an explanation and copy of their report from the credit bureau. Your tenant screening solution should provide you with the necessary information to pass on.

It is best practice to make sure that a tenant’s application is completely approved and the written lease signed before handing over the keys to your apartment. If the application is denied after possession has taken place, you will have little recourse and may be forced to face eviction. Landlords may encounter renters who are looking to moving in very quickly, but this is often a red flag. Take the time to properly approve and accept your tenant’s application and rental agreement. The little extra time could save you many headaches and lots of money down the road.

Photo by: Thomas Hawk