Homeowner · Rio Rancho, NM · Member since 2013 · 40 posts · 6 votes
Is it necessary to send rejection letters to anyone who completes an application or only applicants who have submitted an application fee or background check fee?
Sean Brennan You only need to get challenged by one of our liberal Judges once.
When you rejected a potential Tenant:
What were your standards?
Did you charge for the Application/Credit check?
You are required to notify anyone who is rejected due to credit issues, while you may reject someone for another reason, because there are requirements for you to notify applicants about rejections you need to notify them as to the reason. A short, fill in the blank form letter is a good idea. :)
Tommy B. You may want to check with your credit bureau/AG/Realtor Association.
In Mass you can't reject someone for credit unless you're licensed/certificate to review/interpret credit reports. So we leave that up to the Credit Bureau.
Tommy, like Bill Gulley said, you need to send anyone you reject based in whole or in part on information from their credit file a rejection letter (i.e. adverse action letter). It's optional to send a letter to applicants you reject for other reasons.
Tommy B. You may want to check with your credit bureau/AG/Realtor Association.
In Mass you can't reject someone for credit unless you're licensed/certificate to review/interpret credit reports. So we leave that up to the Credit Bureau.
Mike Hurney I didn't know that. Can you point to the regs that state this? Thanks.
Tommy B. You may want to check with your credit bureau/AG/Realtor Association.
In Mass you can't reject someone for credit unless you're licensed/certificate to review/interpret credit reports. So we leave that up to the Credit Bureau.
Mike Hurney I didn't know that. Can you point to the regs that state this? Thanks.
Sean Brennan I don't think what Mike Hurney posted is accurate. At least, I couldn't find any source for such a requirement. And the credit bureaus certainly aren't going to review and interpret the applicant's credit report for you. They merely provide the information. It's the landlords job to review/interpret it.
Here are a few of the sources that I checked on the matter:
Massachusetts Office of Consumer Affairs & Business Regulation:
http://www.mass.gov/ocabr/consumer/housing/tenant-and-landlord/landlord-rights.html
(They actually suggest you ALWAYS run a credit check on any potential tenants.)
Massachusetts Office of the Attorney General's Guide to Landlord/Tenant Rights:
http://www.mass.gov/ago/docs/consumer/landlordtenant073007.pdf
Mike Hurney, we have a lot of landlords in our Black Diamond group, and I've never heard of that requirement either. Brian Lucier, head of the NWCLA just gave a presentation on screening and his presentation conflicts with your post. If this is true, lots of us are doing it wrong, and we'd appreciate your filling us in and giving us the reference....I'll then discuss it at our next event.
Agreed, sounds like a lender type requirement, can't expect every mom and pop to be certified to rent out the upstairs apt.
BTW, I believe I could make the argument that whatever reason you decline an applicant, it could boil down to declining them credit, depends on what you collect up front. At some point they can be in a property owing you rents in arrears, a contract agreeing to pay money in the future for a benefit received is a credit issue. When you are qualifying someone, that is an underwriting issue. You're also entrusting them with the safekeeping of a rather expensive asset, so again, credit worthyness is an issue if damages come into play. So, if the icome is rocky, that is still a credit extention concern. :)
I rented apartments for commission in Boston for a year. I pulled credit on them all and made the judgement myself; so, I would be surprised if there was something wrong with that.
Sean Brennan You only need to get challenged by one of our liberal Judges once.
When you rejected a potential Tenant:
What were your standards?
Did you charge for the Application/Credit check?
Ann Bellamy, Kyle J.
You guys have any rejection letters we can see as an example?
"When you rejected a potential Tenant:
What were your standards?
Did you charge for the Application/Credit check?"
Between MCAD and the Fair Housing testers this is a big deal in Massachusetts.
Mike Hurney, I just use the standard form letter provided by my tenant screening/credit check service. I notify everyone whether or not they're application was approved, but I only send letters to the ones who were not approved based in whole or in part because of information I obtained from their credit check (which is what is required). The rest get notified over the phone.
And I charge everyone an application fee, which just covers my cost to run their credit. It's non-refundable because once I've run their credit the charge has already been incurred on my end.
Understanding that I lend in MA, and have lots of people in my network who are MA landlords, that's why I wanted to know your legal reference for the following:
"In Mass you can't reject someone for credit unless you're licensed/certificate to review/interpret credit reports. So we leave that up to the Credit Bureau."
I do not own property in MA, only in NH, so this was not for me, this was for everyone reading this, plus all the Black Diamond attendees.
I don't reject for credit, I reject for income and landlord references, as well as inappropriate pets, etc. If someone qualifies for the income and landlord reference portions, I have a program for bad credit applications that allows me to rent to them. I do not have an application fee, but I do require that they pay for the credit report.
I been told to write all your reasons for rejection on your renter rating sheet and store it, along with any results for credit checks etc. for the past two years. Does anyone else do this? I certainly did'nt in the past...
I have been working in property management firms for the last 4 years. They were some of the nationwide PM companies. When I worked there - we send a letter to each individual who was rejected due to credit. But what I wanted to bring up is the application fees. While working for a PM company - we charged them.
I am a private landlord as well (Massachusetts) and I have to tell you that I did a lot of research regarding collecting app fees. I would like to share with you a booklet that was designed for TENANTS in MA.
Tenant Screening Companies - this has info about credit checks - it is a bit long and I don't want to copy the entire thing.
Page 12
1. Illegal Fees
"When landlords rent apartments to new tenants, they ofter try to get more money then just the rent. They may try to tack on extra fees such as "holding deposits", "rental fees", "pet fees", or "application fees." These extra charges are illegal. (ref: Under G.L. 186 15B(1)(b), the law is clear that a landlord can charge only first month's rent, last month's rent, a security deposit and the cost of a new lock)
After reading that "little" booklet - I stopped charging app fees. Regarding my previous W2 job - I am incline to think that they may be different regulations for nationwide PM groups vs private landlords.
I am not a lawyer - so please consult your lawyer before you make a decision.
Just wanted to make all of you aware that resources like that exist out there for TENATS and none of us would like to be sued for the $40 app fee
In Portland there is a lot of concern about discrimination so we are advised to have a criteria that is sent to the applicant. It would be clear if they don't qualify. If they do it is first come, first serve.
@Marta M. Your are right to avoid charging an application fee as a landlord. In Dolben Co. v. Friedmann, 2008 Mass. App. Div. 1,2008 WL 81549, at *4 (Jan. 2, 2008) the court held that it was a violation of the statute to charge a $35 application fee “once [the tenant] agreed to lease the unit.”.
If you have serious money to burn for us, you could go to court and get the definition of “potential tenant,” as opposed to “tenants or prospective tenants” sorted out for us since Dolben did state that a landlord may pass some reasonable costs of processing applications and other expenses incidental to the review of "potential tenants" but not to "tenants or prospective tenants" since case after case after case (Mellor v. Berman, 390 Mass. 275, 279 (1983), Cote v. Sylvia, 2008 Mass. App. Div. 27,9 2008 WL 217396, Hermida et al. v. Archstone) call section 15B is unambiguous in that you may only charge first, last, security and key change.
Now can a property management firm or real estate agent charge and application or credit check fee? This I do not know. Would they be agents of the landlord and fall under the same rules. My bet would be yes, but I am not an attorney and have no case law knowledge on the subject. My guess is that will be the next defense someone tries in court after the recent Herminda case.
Can you please explain what certification requirements you speak of that are mass specific, in order to be able to review credit checks?
Is this the credentialing requirements that each credit agency has that include site visits, before they allow you to directly pull credit reports(as apposed to smart move that operates a different way) or some other kind of cerftificaiton?
As for rejection letters, if you pull credit, you must provide one. Another issue is what is actually included in the letter to be in compliance with the Fair Credit Reporting Act. Most people include the contact info for whatever credit bureau they used but the Act specifies that you have to provide the actual physical address as opposed to a p.o. box.