Can I deny a Rental Applicant based on perceived lying?

Member since 2020 · 983 posts · 1k+ votes

4y

We purchased a separate Samsung J2 cell phone for $59, install Boldbeast recorder on it for $9.99 for life and we record applicants' and existing tenants' conversations and we transfer all text messages and pictures to a hard drive to have every communication documented.

We get a load of applicants who call us on the phone and they are obnoxious, ride, demanding and they make many rude comments in regards to their race and I think it a good reason to refuse to rent to any tenant who doesn't make it clear in regards to who and the number of persons moving into your rental unit. You have the right to refuse to rent to people who you refuse to make their intentions clear, or refuse to people who change their story.

We've had several situations exactly like the one you described where a restaurant owner rented an apartment for employees and we've have a few where massage parlor owners were using our apartments for prostitution and we had serious problems every time.

I would not go as far as taking the rental off the market, but you may feel better documenting every conversation, text message and picture. I can't find the software I use because it disappeared from my computer's file, but it cost about $29 and it downloads all the phone calls, text messages and pictures in one minute and then I backup my entire computer to hard drives no less than 1 to 2 times every week.

Block your applicant's phone number and if he gets through to you tell him you have several other applicants you are considering and keep blowing him off. You have the right to take as long as you want to review applicants and I would blow the house up if our great socialist government tried to force me to rent to someone I don't trust.

5 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

4y

Do you have other applicants? Also check your insurance as there is often a limit as to how many unrelated individuals can live in the home. For my insurance, that number is a max of 3.

4 Reply

Wesley W.

Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes

4y

Liars are not a protected class (yet) - so I would absolutely pass on this guy and his funny business. One of the landlord tenets is that it's better to have a vacant unit than one containing a bad tenant. I would keep marketing it - you would be denying yourself business revenue by trying to "hide" from this tenant. Go through the motions with him and allow him to apply, then deny him because either you found someone better in the meantime, or tell him you are continuing to collect applications before making a decision. I would not ever give him specifics as to why you have not chosen to rent to him - that just opens yourself up to having to explain, justify and defend your decision. Not worth it. You are not legally obligated to explain your decision to him. As long as it's not discrimination against a protected class, it's your prerogative. This is a business relationship you should be comfortable with. If he's raising your antennae, move in.

It's your property and your choice. Keep looking and screen diligently. It will be worth the wait.

11 Reply

Dorys Prentice

OP

Member since 2019 · 36 posts · 23 votes

4y

Thank you for the replies. My hackles are definitely up with the idea that he's going to fill the house with employees that have no skin in the game. He gave me the name and phone of his store manager as being one of the tenants so I plan to call her and have her come over to preview the house. That may stop the process in it's tracks.

@Theresa Harris - we have a ton of inquiries, but when I send my basic 3 questions, ie 3x's income, credit score and criminal/credit check for everyone over 18+ I get cricketts back. My rent is a bit high but I did that on purpose.

2 Reply

Nathan GesnerBusiness Member

Moderator

Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

4y

Yes, you can deny an applicant based no false information. You could also deny them by stating your property is a single-family residence and not a boarding house for employers.

I've rented to businesses before and it can be very lucrative because I charge much more. I currently have a house that would ordinarily rent for $1,800 but I'm renting it to a company for $3,600. I also charged them a double deposit ($7,200) and a non-refundable cleaning fee of $800. They're happy to pay because it's a helluva lot cheaper than putting guys up in a hotel. Easy money when it's done right.

The DIY Landlord Book4.7248 Reviews

Website View Page

22 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

@Dorys Prentice You can do anything you want, you don't have to rent to anyone that makes you uncomfortable. Tell them you are taking a 30 period to accept and evaluate applications. Wait,wait, wait.... as was said - no tenant is far better than a bad tenant....much cheaper in the long run.

4 Reply

Dorys Prentice

OP

Member since 2019 · 36 posts · 23 votes

4y

@Nathan Gesner - now you've got my gears turning. I may have to re-think this whole endeavor. May I PM you later today and pick your brain on how I set this up and still protect my investment?

3 Reply

Marcus Auerbach

Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes

4y

You are clearly not descriminating against race, your concerns are different. Fair housing laws are important, but they are also very clearly defined.

Look up federal, and very important local (municipal) protected classes. For example Wisconsin Sate law additionally protects the source of income, so you can't reject someone because you don't like how they make a living (or receive welfare). The city of Milwaukee adds homelessnes and section 8 to the list - so make sure you understand local law! (see also www.fairhousingwisconsin.com)

There is a great book about landlording written by an ex-cop: Mike Butler. He has good answers to these types of situations drawing from his cop experiences. In this case: don't reject the application, just keep doing "research", delay and don't call them back, and if they call you ask more questions, request more information and then say you have to do more reserach, call references etc - he'll start looking for something else.

Another tip: the application form that we use clearly states if filled out incomplete of with untrue information that alone is grounds for rejection.

5 Reply

Scott Mac

Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes

4y

That's the ticket: https://www.youtube.com/watch?v=pkYNBwCEeH4

2 Reply

Gail K.

Augusta, GA · Member since 2014 · 1k+ posts · 1k+ votes

4y

Hey; at least the guy was honest. He wants to turn your rental into a boarding house; perhaps for his employees, perhaps for relatives, perhaps for anyone he can drag off the street and rent a room too.

If you would prefer that your rental not be used for the above then don't even bother sending an application to this guy.

It's always a good idea to have a lease where the actual tenants are specifically listed by name and a clause that prohibits subletting rooms.

5 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

4y

Why do you believe he is lying? Nothing in your narrative seems to back that idea.

[email protected]301-893-4635 Podcast Guest on Show #192

District Invest Group546 Reviews

Website View Page

4 Reply

Mary M.

Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes

4y

If you have your rent high you will have problems renting it as all the good tenants will go to rentals that are priced fairly. You might consider pricing at market price.

Renting to a (verified) business can be lucrative, but that is generally very different than a regular rental.....

5 Reply

Luciano A.

Developer · Houston TX · Member since 2018 · 423 posts · 400 votes

4y

@Dorys Prentice

Sounds like he learned renting by the room can be lucrative. Look at it strictly as business and not emotional. Spending two years and working hard will have you emotionally attached to the property. But treat like a business and not your baby, use guidelines that are spelled out on what qualifications are required and what will be denied. Have a list of what you are looking for and attach it to the application. If this is your first rental don't use gut feeling to weed out prospects. Regardless if he rents out rooms to staff or family etc it will be on him. The same would apply if you rent to a family. The person signing the lease has to meet all your qualifications like income, credit, etc. As others suggested you can double the security deposit and maybe do a quarterly check of the interior. Have him get an insurance policy that will protect you and your property. Use documents like pay stubs, bank accounts, tax returns, rental verification, background checks to qualify or disqualify a prospect. Using gut feeling will get you into bad situations real quick.

Another thing to consider when a prospect shows up to view the property they and possibly the kids will be on their best behavior. It's like a job interview. The real truth is in the documents. Don't stress out or wait on anyone who hasn't submitted all the documents you require. Keep showing the place and tell everyone those who submit all documents get reviewed. Right now this guy is kicking the tire and is not serious.

Best of luck

4 Reply

Dorys Prentice

OP

Member since 2019 · 36 posts · 23 votes

4y

I appreciate your comments. It's helpful to see what others think.

I just spoke with with my attorney, (who happens to be my father) and he advised that I use a commercial lease signed by his company. However, he also advised that the commercial lease could trigger zoning and insurance issues. Aside from this, I have to take into consideration possible neighbor complaints. With this in mind, I will contact the applicant and just let him know that we are not in the position to do a commercial lease at this time. I firmly believe in being courteous to everyone and blowing him off is not an option in my opinion.

1 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

Pass on this guy and get a traditional tenant for your first go. This will be headaches for you....

2 Reply

Dorys Prentice

OP

Member since 2019 · 36 posts · 23 votes

4y

@Russell Brazil - When I asked him if he and his wife and kids were moving in he said no, it would be for 4-5 employees. When I told him that all of them need to do a credit/background check, and after some argument as to why I require that, he then said it would just be him and and his store manager. I guess I forgot to add the initial question of "are you and your wife and kids are moving in?" to the initial post. So maybe, he didn't lie, but he sure changed who was going to move in quickly.

1 Reply

James Wise

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

4y

Originally posted by @Dorys Prentice:

I have a SFR that I just put on the rental market after two years of remodeling. The place is brand new from the studs in.

I have had a myriad of unqualified people inquire. I did get a request from a person who is insistent on renting the property. I told him that he needs to come over and tour the property first. When he came to tour and interview with myself and my husband, he stated he owns a local retail shop in town and plans to put 4-5 people in the house. When I told him that every adult needs to fill out a credit application and go through a background check, he said he would be responsible for everyone. I told him we can't accept that and everyone still needs to fill out the application. He then said, OK, then just send me and my store manager the application for now. We took his info and the store manager's info and said we'd send out the invitation to apply (through apartments.com credit/background check) later in the day. We also told him we are showing the property the rest of the weekend.

Quite frankly, my gut feeling tells me that he is lying to me about how many people will eventually end up in the house and then removing them will be a nightmare, let alone what they'll do to the house having no skin in the game. However, being that he is Asian, I need to avoid any discrimination lawsuits.

At this time we do not have any other qualified candidates I can't use the line the we accepted another candidate.

I'm worried enough about this situation that we are considering taking the house of the rental market until January just to avoid this situation and hope he finds something else. What is one more month or two off the market after 2 yrs!

You can deny an applicant for any reason except those prohibited by fair housing. So yes, you can and absolutely should deny an applicant whom you think is lying.

3 Reply

Bud Gaffney

Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes

4y

@Dorys Prentice Yes

1 Reply

Karla Simmons

Vacaville, CA · Member since 2019 · 218 posts · 140 votes

4y

@Dorys Prentice

If the little hairs on the back of your neck are standing up, do whatever you need to do to protect yourself. Gut feelings are huge. Taking it off market until January isn’t a bad idea if you cannot think of a legitimate reason to refuse him.

1 Reply

Scott M.

Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes

4y

Lying or not doesn't matter. He refused to have everyone fill out an app. Pass. Also, he seems to be doing more of a corporate housing situation and you don't have to be open to that.

2 Reply

Matt Greer

Real Estate Agent · Mesa, AZ · Member since 2017 · 230 posts · 169 votes

4y

First things first. Never and I mean never bring up race as a landlord. Even if you think it could play a factor it's not allowed to play a factor. If this prospect decides to take action against you this is posted online and you never know what a jury will think and you just brought race into the picture. In my eyes every prospect is an indistinct humanoid to me.

Now as far as lying to you that's suspect and I wouldn't trust it, but you can decline them by saying you don't want to rent out to a business to board it's employees which is totally logical. Just make sure if another business ever applies you deny them for the same reason.

The easiest way to stay out of trouble is to set up guidelines on who you will and won't rent to. Always write them down and if you can record them as an attachment to you LLC's operating agreement at the county courthouse (assuming you have an LLC or corp.) do it.

7 Reply

Daniel SmythPro Member

Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes

4y

@Dorys Prentice

You can deny a rental application for any reason!

Just understand that if you say a reason is one of those protected reasons, you will find yourself in hot water.

You can deny without explanation at all!

Many never figure this out.

Politely say No thank you and refuse to say more. No legal statue provides that you must declare why you refuse!

Prove me wrong!

It's so simple. Just say no thanks and look at the next application!

You have the right to rent to anyone, the same as to rent to anyone. You just need to know when to shut that mouth! It's your prooerty.

Direct and right! That's me!

[email protected]

5 Reply

Deanna O.

Rental Property Investor · San Diego, CA · Member since 2010 · 366 posts · 314 votes

4y

Know your local laws ---Oregon, for instance, has a "first qualified" clause with the idea that it will reduce discrimination. A policy of dealing with only with principle occupant (ie renter themselves) isn't unreasonable. This guy has given you two different stories. He's not going to take you to court, because no way does he want law enforcement to notice him and start poking around, asking questions. POSSIBLY he's just a great business owner who has decided to try to solve staffing issues by providing housing for his workers,however he's also behaving exactly like he would need to in order to house illegal/trafficked workers too. (After you've rented out the place, maybe anonymous tip to the appropriate local authorities?). For what it's worth, I don't even give out an application until I've done a pre-screening that involves some basic verification of the initial conversation with the applicant during which I took notes on a basic list of items (when are you moving, why are you moving, who will be residing in the property, income, employment, animals, evictions, etc). They lie on any of those and they are out. I also do a quick check online to see if any of the occupant names pop up in the local court records. You might consider corporate rentals or insurance-provided housing, since those are generally more profitable but of course that depends on the caliber of the property/neighborhood.

2 Reply

Deanna O.

Rental Property Investor · San Diego, CA · Member since 2010 · 366 posts · 314 votes

4y

That he is insistent and pushy is also an automatic no in my book. If you want to never hear from him ever again, tell him that both your lawyer and a "friend" who works for Police/ICE have warned you about liability and human trafficking situations, and thus the insistence on background checks for every occupant.
Since he's changed his story already, you still have an easy and legal no. Call him a liar, just don't return his calls - - your choice.

2 Reply

Mary M.

Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes

4y

I find this thread interesting. Businesses DO rent apartment/homes for employees. I know as I used to rent them for a business I worked for. Depending on the city the employees would stay as needed as they traveled or the owner would stay as needed. Its not unusual. Now, you need to see what business is doing the renting.... In my case it was a software company..... this is easy to find out - just ask.

In the cases where I rented our for businesses the employees were not on the lease. The business was (or the owner) .... There is actually a very lucrative sector of rentals that do this... so I would be open minded and at least check it out.

Also please do NOT make a list of the people you want to rent your place - this is just asking to get sued for discrimination. The best policy is the accept the first qualified individual. dont pick and choose. By picking and choosing you open yourself up to discrimination lawsuits.

Also learn the local landlord/tenant laws so you know the rules of the game you are playing.

2 Reply

Can I deny a Rental Applicant based on perceived lying?

Can I deny a Rental Applicant based on perceived lying?

Most Popular Reply

74 Replies