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As a landlord, the more interested parties there are for your property the better. A bigger pool of applicants will afford you a greater chance at finding the ideal tenant for your home. In a previous post, we discussed the best ways to attract more applicants to your property. Once you have this large pool to choose from, you will need to begin the tenant screening process. During the process of screening, you will run into an array of applicants who are not right for your property. When this happens, you will need to learn the art of saying “no” and you will need to ensure you are following all laws and regulations surrounding tenant rejection.
Do you know what valid reasons there are for rejecting tenants? Read on to learn more about the reasons why you might reject an applicant and how to best handle the process of rejection.
It All Begins With Applications & Screening
In order to know what applicants you should accept and what applicants you should reject, you have to first compile the necessary information to make that decision. Start by brushing up on Fair Housing Laws. Remember, the following are all federally protected classes and you cannot reject an applicant based on any of these classes:
- National origin
- Familial status
Beyond these classes, your state and city might also include other protected classes, such as sexual orientation, marital status, and more. Be sure you know the local law before you start rejecting and accepting applicants. Keep in mind that during the screening process you need to stick to the same set of criteria and process no matter who is applying to your property. The better organized you keep yourself and the clearer your criteria is the better you will be able to protect yourself from claims of discrimination.
During the application process, your goal should be to garner as much relevant information as possible. Finding out things like income, previous renting history, and credit scores can all go a long way in helping you determine if someone is the right fit for your property. You can also use the application to find out if the applicant has pets, smokes, and other important factors.
Reasons You Might Reject An Applicant
While it is very important to follow the regulations of the Fair Housing Act, you still have the right as a landlord to reject an applicant for a myriad of other reasons. By deciding a lot of the criteria up front, you will take out the guesswork when the time comes to reject or accept applicants. The following are items to create your criteria around and to use as a basis for rejection.
- Income Requirements
- Determine how much money you will require an applicant to make in order to qualify for your property. Many landlords require 3x the monthly rent. Whatever your income requirement, be sure you stick to it and if someone does not make enough to meet your income requirements, this is a valid reason to reject them.
- Credit Score
- An important part of the tenant screening process is pulling a credit report. Decide what criteria for credit scores you will have for your property. Most of the time landlords look for a score of 620 or higher. If an applicant has a low credit score and a credit report filled with derogatory items such as missed payments, you can use this as a reason for rejection. Be sure you follow the guidelines laid out by the Federal Trade Commission when rejecting an applicant due to credit.
- Eviction History
- Another important item to include during the tenant screening process is an eviction history report. This will let you know whether or not the applicant has a history of being evicted. If evictions show up on this report, it is probably a good idea to use this as a reason for rejecting an applicant.
- Before accepting applications, decide whether or not your property will be pet-friendly. While you cannot discriminate based on service animals, you can decide to have a no-pet policy and reject applicants who own pets. If you have a pet-friendly rental, you might also have a limit on the number of pets you will allow. Be sure when you are rejecting someone on the basis of having an animal that the animal does not qualify as a service animal.
- Another decision you will need to make prior to accepting applicants is whether or not you will allow smoking at your property.
How To Handle Rejecting Applicants
If you decide that an applicant isn’t a good fit for your property, you will now be faced with the process of letting the applicant know they have been rejected. While it isn’t a fun part of being a landlord, it is a necessary part. The best tips for handling an applicant rejection is to communicate clearly and in a timely manner. Don’t leave applicants waiting on your answer for too long. Once you know someone is disqualified, let them know. If you are rejecting them based on a credit score, follow the notification guidelines as outlined by the Federal Trade Commission.
If you are rejecting them for any other reason, you are not required to explain yourself in detail. Simply letting them know that they have not been accepted is enough. By having a set criteria for applicants, sticking to that criteria, and documenting for yourself why applicants were rejected, you can best protect yourself from claims of discrimination.
Remember, even if you do not enjoy the process of rejecting applicants, you have to learn the power of the word “no” as a landlord. If you simply accept whatever applicant comes your way without properly vetting them, you can wind up in a difficult scenario and you can subject yourself to large amounts of money lost. Rejecting applicants is an important part in the process of finding a responsible tenant for your property.
Take Your Tenant Verification Online
The good news for landlords is that our online services make screening tenants easy and free. You can direct tenants to an online rental application with customizable questions. Then you can screen potential tenants through the same integrated system, all at zero cost to the landlord. With our online tenant screening, you can gain important information such as criminal backgrounds, credit reports, and eviction histories. Our tenant screening report will provide you with a lot of the valuable information you need to determine who you will accept and who you will reject for your rental property.