Can I deny a Rental Applicant based on perceived lying?

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Can I deny a Rental Applicant based on perceived lying?

Dorys Prentice
Member since 2019 · 36 posts · 23 votes
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!
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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.

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Originally posted by @Mary M.:

    The best policy is the accept the first qualified individual. 

    Better policy is to accept the first qualified applicant that you feel good about. Lots of people can meet the income/credit score stuff, but are entitled A-holes....

    4Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    4y
    Originally posted by @Bruce Woodruff:
    Originally posted by @Mary M.:

    The best policy is the accept the first qualified individual. 

    Better policy is to accept the first qualified applicant that you feel good about. Lots of people can meet the income/credit score stuff, but are entitled A-holes....

    I have always accepted the first qualified tenant...this is what the local Multi Fam Owner Orgs say is best practices and it is now law in my state.  But even before it was law it is how I do things. It makes it super easy - and I know I am not inadvertently being discriminatory .....   I have great tenants so it works for me. 

    1Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Originally posted by @Mary M.:
    Originally posted by @Bruce Woodruff:
    Originally posted by @Mary M.:

    The best policy is the accept the first qualified individual. 

    Better policy is to accept the first qualified applicant that you feel good about. Lots of people can meet the income/credit score stuff, but are entitled A-holes....

    I have always accepted the first qualified tenant...this is what the local Multi Fam Owner Orgs say is best practices and it is now law in my state.  But even before it was law it is how I do things. It makes it super easy - and I know I am not inadvertently being discriminatory .....   I have great tenants so it works for me. 

     Glad it works for you. Not the smartest way to do business IMHO.

    2Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    4y
    Originally posted by @Bruce Woodruff:


     Glad it works for you. Not the smartest way to do business IMHO.


    it works for every landlord in Oregon.  >shrug< 

    1Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    4y

    Our policy is that every occupant over 18 must fill out an application and each must meet the income and credit requirements. ie, we don't allow unmarried applicants to combine income. So this may be a way out of your concerning situation if you have that policy.

    2Reply
  • DongHui Patel
    Member since 2021 · 95 posts · 30 votes
    4y

    @Dorys Prentice

    Trust your gut. Hold off and find the right tenant.

    2Reply
  • Marian Smith
    Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
    4y

    @Dorys Prentice With roommates it is smart to require each person to qualify for the entire rent. Boyfriend/girlfriend break up, etc. In your case, big fight or someone gets fired, etc. This policy allows you to turn them down. Adopt it.

    Also, does your city have restrictions on # of unrelated people living in one house? Single family zoned for "families"? You could get a citation.

    2Reply
  • Dorys Prentice
    OP
    Member since 2019 · 36 posts · 23 votes
    4y

    @Marian Smith - best advice yet.  All non-related applicants must qualify individually.  I've had other applicants that only one qualified but they refused to send me bank statements or tax returns as they were self employed so they moved on.  

    As for zoning, the city ordinance only identifies boarding houses as homes with 3 or more non-related individuals with separate lease agreements.  Since all would be on one agreement, I don't think this qualifies.  I need to also check my insurance.  

    0Reply
  • Terrell Garren
    Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
    4y
    Originally posted by @Bruce Woodruff:
    Originally posted by @Mary M.:

    The best policy is the accept the first qualified individual. 

    Better policy is to accept the first qualified applicant that you feel good about.


    Exactly. Small scale property owners don't have many advantages over the big hedge fund guys.  This is one of them. If you need an explanation, you've not been in the business long enough. 

    4Reply
  • Brandon States
    Rental Property Investor · Cleveland, OH · Member since 2018 · 60 posts · 49 votes
    4y

    @Dorys Prentice I always follow my gut when interviewing tenants. They have to also meet my requirements of a renter. If not then I wish them luck and I continue the search. I look at having the time invested in finding a good tenant will pay off in the future.

    3Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Originally posted by @Mary M.:

    So 'every' landlord in Oregon takes the first applicant that meets their qualifications? Not a single one uses their intuition and street smarts to help select the best tenant? Right.

    1Reply
  • Curt Smith
    Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
    4y

    @Dorys Prentice hi dory and others, my screening criteria that has highest predictor of good tenant is not fico, but bank balance. Ie send screen shot of your bank app showing your name, date and balance, to proceed with screening. I do this up front.

    All NY recs are at the bottom of my long ad. 1sr is must be long term tenant, typical is multi years. I have ave around 6-7 yrs

    2Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    4y

    @Terrell Garren and @Bruce Woodruff - it is the law in Portland that a LL must accept the first qualified applicant. It has been for a few years. Even before this this was my policy as it is what I was taught by the Rental owners Organizations as best practices.     I dont think there is any law against not showing or providing applications to every person. For example I am sure no LL in Portland that uses zillow allows folks to apply before meeting them or dialoging in some way.   But yes, you must accept the first qualified applicant.  (we also have a bunch of other weird rules too) 

    FWIW, this law was pushed by the LL orgs as best practices.  Also I am no hedge fund :)

    here is Apartments.com recommending the practice https://www.apartments.com/ren...

    0Reply
  • Account Closed
    Member since 2020 · 983 posts · 1k+ votes
    4y
    Originally posted by @Mary M.:

    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. 

     I would never rent to the first applicant because they qualify since there may be many more applicants who are more-qualified.

    Other than the necessity for an applicant to have a history of having adequate cash on-hand to cover their rent and other expenses, some of the most-important factors I consider are the things that tell me whether or not the applicant will keep the place clean, be free of mentally aggravating issues, etc..

    Here is an example. On December 1, 2020 (11 months ago) my wife was signing a lease with an applicant. I told my wife more than 10 times before she signed the lease that the husband and wife were ignorant, liars and they looked like pigs who would keep the place filthy. Well...I was 100% correct on the first two and they ended up being very clean.

    But...as far as my first two opinions, I was 100% correct. Starting with the day these tenants moved in they have been a nightmare to deal with. Their $400 cleaning deposit check bounced and they never paid the $400 in the past 11 months. They have been late of their rent every month, never paid a late charge, threatened to sue us several times because we asked for the $400 cleaning deposit and late charges and swore at my wife several times with the F... word. Two days ago, I sent them an eviction notice.

    I don't care what the laws state. They are my rental units and I will not rent to people when I think they are liars, pigs, or will cause mental anguish. The scumbag I am evicting actually pays his rent and I can take the $400 from his security deposit, but I would rather lose the possible $6,000 to $9,000 I will lose by evicting him and the reason I want to evict him is so my wife and I never ever need to allow him to get us upset for one minute. If our great socialist government wants to force me to rent to people I don't like then the government should pay me for my losses. But, never take money from our government because there is always a catch.

    4Reply
  • Terrell Garren
    Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
    4y
    Originally posted by @Mary M.:

    @Terrell Garren and @Bruce Woodruff - it is the law in Portland that a LL must accept the first qualified applicant. It has been for a few years. Even before this this was my policy as it is what I was taught by the Rental owners Organizations as best practices.     I dont think there is any law against not showing or providing applications to every person. For example I am sure no LL in Portland that uses zillow allows folks to apply before meeting them or dialoging in some way.   But yes, you must accept the first qualified applicant.  (we also have a bunch of other weird rules too) 

    FWIW, this law was pushed by the LL orgs as best practices.  Also I am no hedge fund :)

    here is Apartments.com recommending the practice https://www.apartments.com/ren...

    So how do you handle face tattoos, impolite communications, late to showing, aggressive demeanor, spends 5 minutes looking at house, trashy interior of vehicle, allows kids to roam unsupervised, attempts to negotiate deposit / rent, asks about parking Harley on porch, etc. Many more but you get the point.

    3Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    @Mary M. I don't care what the Govt wants me to do. It's my property.

    Do you blindly follow all laws? What if a couple that was obvious KKK, White Supremist types showed up and had  excellent credit and great income? Would you rent to them?

    0Reply
  • Bill Crow
    Investor · Lewisville, TX · Member since 2012 · 106 posts · 103 votes
    4y

    @Dorys Prentice

    If you don’t lease to non-occupants, you can end the discussion here. Why would you accept the risk of renting to someone who won’t live there, with occupants who have no interest in maintaining your property and no financial repercussions? Don’t go there.

    1Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    4y

    @Account Closed   why yes, I do try to follow the law, especially if not following it would possibly get me sued.....   But you guys can say you would never do this or that and that is fine.....  you dont live and work here and honestly its not that hard of as law to maneuver....  good strong criteria, a good class of RE, writing ads that draw the right people, and finally talking to folks before you even show the unit.   The law is that we must accept the first "qualified applicant". This means the person needs to fill out an application and pass all my screening.....   I dont do open houses, I dont allow anyone to apply to a unit unless I send them a link....    Are some of the laws here silly and end up costing tenants more money? why yes - but that is a debate for another thread....  to play the game I gotta follow the rules.... >shrug<  

    1Reply
  • Erica Downing
    Rental Property Investor · Member since 2021 · 2 posts · 2 votes
    4y

    @Dorys Prentice lost money is the answer to that question? Have you thought of working with a property manager to maintain and find occupants for the property and relieve you of some of this stress.

    1Reply
  • Terrell Garren
    Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
    4y
    Originally posted by @Mary M.:

    @Account Closed   why yes, I do try to follow the law, especially if not following it would possibly get me sued.....   But you guys can say you would never do this or that and that is fine.....  you dont live and work here and honestly its not that hard of as law to maneuver....  good strong criteria, a good class of RE, writing ads that draw the right people, and finally talking to folks before you even show the unit.   The law is that we must accept the first "qualified applicant". This means the person needs to fill out an application and pass all my screening.....   I dont do open houses, I dont allow anyone to apply to a unit unless I send them a link....    Are some of the laws here silly and end up costing tenants more money? why yes - but that is a debate for another thread....  to play the game I gotta follow the rules.... >shrug<  

    So you simply screen out the people you don't prefer before the application process. Same thing I do.  We both know we are potentially screening out qualified applicants.  I am no attorney, but I doubt you are complying with the intent of the law. I would not either. 

    2Reply
  • Account Closed
    Member since 2020 · 983 posts · 1k+ votes
    4y
    Originally posted by @Mary M.:

    @Account Closed, @Bruce Woodruff, @Terrell Garren   why yes, I do try to follow the law, especially if not following it would possibly get me sued.....   But you guys can say you would never do this or that and that is fine.....  you dont live and work here and honestly its not that hard of as law to maneuver....  good strong criteria, a good class of RE, writing ads that draw the right people, and finally talking to folks before you even show the unit.   The law is that we must accept the first "qualified applicant". This means the person needs to fill out an application and pass all my screening.....   I dont do open houses, I dont allow anyone to apply to a unit unless I send them a link....    Are some of the laws here silly and end up costing tenants more money? why yes - but that is a debate for another thread....  to play the game I gotta follow the rules.... >shrug<  

    Sorry! I briefly read a post stating that Oregon landlords have to accept the first qualified applicant. As a landlord, I seriously feel like the government is trying to squeeze us out of business. I was looking on the internet for information about having to rent to the first qualified applicant and did not find any information. Perhaps, you can post a link.

    I think many landlords have all their applicants calls go to voicemail and the landlords have as little personal contact as possible. Everyone knows that voicemails are recorded. Then, put Boldbeast recorder on a cell phone and tell everyone the call is being recorded if you are required to in your state. While you would think most applicants are polite on the phone I find that a high percent make statements that disqualify them.

    I think whether or not you expose yourself to being sues revolves around whether or not you have a precise set of rules you use that you apply when reviewing each applicant. It used to be, before our country change to socialism, that as long as we applied the same rules to every applicant and documented every applicant's application we could still get sued, but had a better chance of winning in a court.

    It is super easy today to document every phone call, text message, applications and pictures so we have a better chance of winning in court. I've had Boldbeast recorder on my phone for several years and I love it. To get it record the callers' phone numbers do not download the software from Play Store or whatever you call it. To get it to record phone numbers download it onto your phone directly from a Goolgle or Chrome Boldbeast recorder website and it costs only $9.99 for life.

    Just last week, one of my employees told me something on the phone about a job and I was super angry and about to fire him. Then, he told me he did not tell me on the phone what I thought I heard. So, I played the call back to him and I was correct. Sometimes, I am wrong and that can be weird when I can't even remember what I said. Every few months I plug the phone into my computer and transfer all the phone calls, text messages and pictures to a hard drive.

    I was the most horrible business person when it came to saving emails and I never kept important emails. Now, I switched to Gmail and purchased a software for about $29 from a company called Gmail Backup Wizard by Recovery Tools and it transfers all my emails to my computer and will delete them from Gmail at the same time if you want to delete them. I find it much easier to find past emails on my computer than on Gmail.

    1Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    4y

    So, just to reassure, 

    1)no business owner, legit type or not, looking for cheap housing for his employees is going to file any kind of lawsuit

    2) lots of (good) talk about taking first qualified applicants etc, but remember YOU make the qualifications. If you are worried make sure you have written criteria that includes demeanor in person, quality of communication during the application process, completeness and accuracy of provided information.

    1Reply
  • Corina Eufinger
    Rental Property Investor · Oconomowoc, WI · Member since 2016 · 996 posts · 431 votes
    4y

    You believing that in the future he will have more people living there than he states on his application isn't lying. It's your projection of what will happen. I've had applicants where I could reasonably believe there likely would be other people living there but that's my assumption until it's proven otherwise after they move in. 

    Your decision to deny or accept cannot be rooted in this matter. You need to have other reasons as to why you either denied this person or went with a different candidate. I.e. another candidate had a better credit score or their income ratio was better, etc.

    1Reply
  • Dorys Prentice
    OP
    Member since 2019 · 36 posts · 23 votes
    4y

    There is always great conversation on these posts, some relevant, some not, but all informational.  

    Just to update my situation, apparently he is planning on living in the place himself. It wasn't clear when I met him and maybe my fault that I didn't ask the right questions.  I feel so intrusive when I ask questions but I need to get over that quickly. Yes, he does plan on having non-related people move in so I'm still checking with local ordinances and my insurance about how many non-related people will be covered. 

    0Reply
  • Linda S.
    Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
    4y

    @Dorys Prentice,

    I have a general rule-- Regardless of everything else-- if I don't like working with someone during the application process, I don't rent to them.  If I don't like working with you now, I won't like you in the future.     I self-manage, so communication and respect is #1.  It sounds like you're telling them the rules-- all 18+ adults need a background check, and he's saying.. nope, you just get mine.     That's kind of the middle finger, and I would immediately throw it out.    It sets the tone for the entire relationship, no thanks.

    If you're asking for other needed paperwork, and they tell you no, or don't send it-- that's not your fault it's an incomplete application.  Know your state laws,  but you don't have to rent to everyone who wants your house.    I don't understand the stress, unless you or the tenant is making it about race?   Again-- know your state laws.  

    If you want more applicants, drop the rent and get a new influx of applicants! 

    4Reply
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