Do you what are the proper and legal reasons to deny tenant applications? Learn how to reject tenant applications correctly today.
Poor Credit - You can reject a prospective tenant due to low credit scores and poor credit history. An applicant's credit report is an important indicator of whether he or she will be likely to pay you rent on time. For more details, Click here to learn how to run tenant credit checks online.
False Application Information - If a potential tenant knowingly supplies you with false data or hides any negative information on purpose, then you have an ample reason to deny him or her. That is also why you should ask all applicants to fill up a rental application form during the screening and interview process.
Number of Occupants - You can decline tenant application to avoid overcrowding. As a general rule of thumb, you should stick to HUD's recommendation of "two person per bedroom plus one additional occupant". So if you are renting out a two bedroom apartment, it's acceptable for you to reject a family of six or larger from becoming your tenant.
Pet in Rental Properties - In most cases, the landlord has the right to refuse tenants with pets. There are certain exceptions though - Disabled and elderly tenants may have able to keep pets and you cannot reject them due to this reason.
Criminal or Eviction History - As we have mentioned before, running a tenant background check from a reputable tenant screening site such as E-Renter is essential for filtering out potential troublemakers.
In general, tenants with a criminal or eviction background are bad news. However, you may want to overlook minor violations such parking tickets or traffic offenses.
If you deny tenant application (partially or entirely) based on the person's credit report, then you are required by law to send an adverse action letter to inform the person that his or her application was rejected in part (or in whole) due to the information obtained from their credit report.
This adverse action letter will have to contain the name, address and phone number of the credit reporting agency that provided the credit report. The applicant will also be given the right to obtain his or her own free credit report within 60 days.
For other reasons, you're not required to given the applicants a written notice but you must be careful not to run afoul of tenant discrimination laws.
You don't have to reject any prospective tenants outright or cite reasons for doing so. Be careful if you choose to give reasons for denying tenant applications (we don't recommend doing it at all) - Never quote illegal reasons such as race, color, religion, sex and nationality.
Don't lie to your potential tenants for any reason - that includes white lies such as telling someone that you have already found a renter (as a reason to reject tenant applications). Instead just inform the applicant that you will review the application and contact him or her if chosen.