Rejecting tenant on gut feeling?

27 Replies

Hi all, I've been a while researching and learning about renting my first investment property and I finally posted my rental ad this afternoon. Our market is pretty good in Edmonton and I've received a phone call and 6 emails so far about the house. 

To pre-screen I've used the following minimum requirements on my reply emails/phone conversation.

-Salary must be equal to or greater than 3x rent

-No previous evictions

-Good references from all previous landlords

-Credit/Background check will be performed at applicants expense

I'm left with 3 viewings scheduled for this week. Hooray! After I get over the excitement of possibly getting a renter I start to think about some of the information I got on the phone call. 

The lady asked if the minimum salary was for an individual or household. I say household. She says "Ok, we'll be fine then....between myself, my boyfriend, his brother and his cousin we meet that". This gives me pause but I couldn't think of anything else to say/question so I went ahead and scheduled the viewing.

Now, I don't have anything concrete and the application will give me more to work off of but I'm getting a gut feeling that this won't be the best set of tenants. 

I guess my question is this, can you decline an applicant based on a feeling as long as it's not based on race, religion, age, etc. I get a bit of conflicting information when reading tenant screening blogs. For example saying to look at a tenants car condition for an indication of cleanliness but later saying that you should clearly let an applicant know why they were rejected (would you tell them it's because their car was dirty)?

Thanks for any help to this nervous newbie. 

Some localities allow you to consider household for a single family unit, married with one stay-at-home parent, for example; or individually if not a single family unit.  Others will not allow that, same policy must exist married or not.  Where you have to have the same policy, I require each individual over 18 to qualify separately, but will allow legal dependents like spouse, children, to be listed as additional occupants with proof from tax return showing listed dependents.  This is how the apartment complex did it for us when we moved there temporarily, and I thought it worked well.   If your locality allows the difference, explain you misunderstood and consider "household" to be a single family unit, not separate roommates. If not allowed to do that, I'd probably still act like I misunderstood and let them know that to you, "household," means you'll consider adding additional co-tenants who may not meet the 3 x requirement individually only if one of them actually qualifies at 3 x the rent, depending on clean credit and background checks for all over 18.  Then, just change your policy to clarify in the future.  If it's your first investment property, you're probably covered under exceptions clauses if you don't use management, so look it up and see and you might breathe a bit easier.  I'm not a lawyer, so no legal advice.  

First and foremost - KNOW YOUR LOCAL RENTAL LAW INCLUDING STATE/COUNTRY LAWS.  I do not practice law in CA or even understand the laws up north.

If you hold all applicants to the same standard then you should have no problems.  It would be wise to investigate everyone that is renting from you.  This may cost more money but it may also save you $$$ to avoid problems.  

Your gut is always a great indicator when looking for how to proceed in RE.  There are some great podcasts about vetting potential renters.  Most say talk up front about your process and what will be completed on each person and many challenging renters don't turn in an application.

Renters are like kids.  communicate the boundaries and follow those boundaries - for both your sakes.

In California, you have to consider the total income of the occupants who are applying - can't require each individual adult to qualify alone.

Obviously, if you can require that - and you always do - that's your way out.

But, I always trusted my "hinky" feelings.  And these guys will fail to meet at least one of your requirements that have nothing to do with race, etc.  

You just need one of them to not fill out the application completely, or to put wrong address info (this is one that most tenants actually do - they don't give you all of their prior addresses that you've asked for), they won't have verifiable income for the last year, or references from non-relatives (no references allowed by relatives they lived with), one of them at least, won't have good credit.

And then, when they try and regroup or find another roommate, you can just say, I am sorry, but I don't rent to groups of people who are wishy washy about who will be living in the house, and keep changing their minds.

So, IF you have to allow them to rent as a "unit," just start processing their separate applications thoroughly.  One of them, at least, won't meet your criteria.  People who need 5 people to combine income to qualify - won't have good credit, verifiable references, etc.  So, you'll be fine to move on to the next applicant.

Congrats on your rental!

Thanks for all the great comments. I'll be attending a municipal course for landlords on Thursday so I should be able to clarify the laws then. The application formalities are a great point to use for disqualification.

mhmm i know i love my RED STATES lol i also remember taking a criminal justice course and spending half the semester on intent and long story short is if you have a book bag full of drugs and you can prove you did not know they were there you CAN BEAT THE CASE... never actually happened as far as i know but basically if you grabbed your roommates bag by accident and they came in took the charge and explained it but i don't know anyone who has a room mate that is that nice lol 

MY POINT IS WHO CARES... not legal advice but if you accepted 2 applications at an open house at the same time and they both say they think they want to move in but are not sure... than you get positive reports for both perspective tenants and they both email you at the same time saying yea they are 100% sure they want it and will have a deposit the next day.... NOW YOU NEED TO CHOOSE weather or not you have a bias or discriminatory attitude toward one tenant or the other (you may not even realize you do) YOU NEED TO PICK ONE for the one apartment you have available... WHAT HAPPENS THAN???????

i hope i don't offend anyone and i personally don't discriminate against anyone or anything like that but i tend to be very conservative and i always wonder where the crazy rules come from because i had no idea that prosecutors and cops can read minds... i have been called a racist simply because I'm white and they didn't know i actually witnessed him  and his brother commit a petty theft in the past and i wasn't calling them crooked thieves for no reason.....

good point also...

Originally posted by @Sue K. :

In California, you have to consider the total income of the occupants who are applying - can't require each individual adult to qualify alone.

Obviously, if you can require that - and you always do - that's your way out.

But, I always trusted my "hinky" feelings.  And these guys will fail to meet at least one of your requirements that have nothing to do with race, etc.  

You just need one of them to not fill out the application completely, or to put wrong address info (this is one that most tenants actually do - they don't give you all of their prior addresses that you've asked for), they won't have verifiable income for the last year, or references from non-relatives (no references allowed by relatives they lived with), one of them at least, won't have good credit.

And then, when they try and regroup or find another roommate, you can just say, I am sorry, but I don't rent to groups of people who are wishy washy about who will be living in the house, and keep changing their minds.

So, IF you have to allow them to rent as a "unit," just start processing their separate applications thoroughly.  One of them, at least, won't meet your criteria.  People who need 5 people to combine income to qualify - won't have good credit, verifiable references, etc.  So, you'll be fine to move on to the next applicant.

Congrats on your rental!

As long as you make sure that you can prove none of the applicants you approved made any of the slip-ups that you gave as a reason for disqualifying the applicant you rejected you'll never  have to worry about a Fair Housing Discrimination lawsuit.

That goes for gut feelings too.

Yes, makes sense. 

This is why rigorous screening is so important. Just based on experience, I would guess that if you do a rigorous application check you will find plenty of facts that confirm your gut feeling. However if you check all four applicants and all four have stellar rental references, excellent pay history, always leave the place clean, and pass all your other requirements, etc, then your gut feeling may be wrong. I'd be thorough and probing and ask open ended questions when speaking with other landlords.
When all applicants seem equal, it would be good to have a point ranking system and deadline to apply so that you are not trapped taking the first applicant. If you have a ranking system, then you have a better gauge for tenant selection.
But again, if you are rigorous in screening, and they come out shining, why not rent to them.

Good advice from these folks.  All you need is a single reason, or an additional applicant(s) that are better qualified. 

Also, thats 4 people in a single unit. Some areas have occupancy limits attached to square footage (or meters for you Edmonton folk). 

Go with your gut for sure, but find and document your 'out'. IF they do, in fact, show up as 4 people with stellar credit, no UD's/evictions, real jobs, and no criminal backgrounds, perhaps you should rent to them, and go get your 'gut-radar' checked, but I doubt thats the case.

As a tip, always charge a fee per applicant, or per married couple. for four people, that would be $100-200 in most areas of the US. Enough ching to scare off BS'ers who aren't committed and sure about their positions. Just be up front about your STRINGENT qualifications and for everyones sake, don't mark up application prices.

2 pennies and an opinion.

@greg ewanchuck

You have to be careful reading advice on this board as the vast majority of it concerns the US, and their laws are quite different because of past history of discrimination in housing. In Canada you have much broader latitude in rejecting applicants and if Alberta is the same as Ontario (my sense is it is as Landlord Tenant laws in Alberta are known to be much more landlord friendly than is the Residential Tenancies Act in Ontario) then, and this is a crucial point, you do not have to give any reason whatsoever as to why you are rejecting an applicant. Then the standard legal advice here in ON is that you be sure not to give a reason since this could open you up to complaints made to the Human Rights Commission. Therefore, say nothing. This is in contrast to the US where if you deny an applicant say based on credit you have to send them a notice explaining this. In Canada there is no such requirement. Your comments earlier in this thread suggest that you are thinking of giving applicants a reason for denial. No good can come of this. Be sure to give no reasons at all; you are under no obligation to provide any.

@Account Closed above.  When it comes to a credit report, if you read your agreement with the credit agency you are using (RentCheck, TVS, etc), it will most likely forbid you from sharing the results of a credit history report with the subject themselves.

As Stephen indicated, you can simply tell the tenant that you have decided not to proceed with their application.  In some places you may be required to provide a reason if the applicant formally requests it - NB is a bit grey in its position here - so give your provincial residential tenancies act a thorough read.

This is a perfect time to tell you what happened to me a single guy 50k in income drives up in a 2006 BMW brings the 35 bucks loves the apartment answers no to almost everything neg on the application my gut feeling is what a great new tenant till i got his background report back OMG 14 pages of felony convictions about 30 in all and one eviction last year DO NOT go by gut feelings ever this stuff always surprises me how landlords can rent without background checks. I have too many apartments and pretty high priced ones in NYC and also the over 100 my wife and I have in SC and never go by gut feelings

Originally posted by @Millie D. :

This is why rigorous screening is so important. Just based on experience, I would guess that if you do a rigorous application check you will find plenty of facts that confirm your gut feeling. 

Any landlord operating in an environment where Fair Housing laws apply should acclimate to the fact that whatever they feel in their gut should count for nothing and (unless they want to be on the wrong end of a discrimination lawsuit) should  have demonstrably zero influence on how rigorously an application is vetted. 

@Millie D.

Thanks for the advice, I think $35 per application is reasonable as it barely covers the background/credit check.

@Greg Ewanchuk, truth is our laws are not your laws.  If you need a good plow horse don't call the guy who raises race horses.  I only noticed 2 guys post who have any knowledge of your local laws.  if you still have any doubt contact your local barrister or its equivalent.  Good luck!

@stephen e.

Thanks alot for bringing this up. I didn't realize the discrimination laws had different implications here. I know we still have them, just thought the selection process would be the same. 

@Roy N.

Thanks for the info Roy, really appreciate it. I'll start reading the landlord and tennant act. At least now I have something to look for and I might not fall asleep so fast. 

@Steven E.

Thanks for your input, some really great points.

Once you are clear with the local laws, follow your gut feelings. Sometimes, you really cannot explain it but for me, the hunch always works.

What does Edmonton local law say? am not sure you owe them a reason fo rnot renting to them; but you can always give a 'genuine' reason....like, you changed your mind of the renting criteria......

Happy investing!

I publish my qualifications and they are the same for everyone. there is no such law any where in the USA that you can get sued for rejecting a convicted felony or a eviction in the past you cannot reject for color, sex, sexual orientation or religion and so forth just make your rules clear and they apply for all and you never end up in court for such a thing. by the way you cant just tell them you just changed your mind that mean if you rent the apt to someone else any time over the next month your going to court to fight for a discrimination charge. make your own rules and stick with them for all.

Originally posted by @Account Closed :

Hi all, I've been a while researching and learning about renting my first investment property and I finally posted my rental ad this afternoon. Our market is pretty good in Edmonton and I've received a phone call and 6 emails so far about the house. 

To pre-screen I've used the following minimum requirements on my reply emails/phone conversation.

-Salary must be equal to or greater than 3x rent

-No previous evictions

-Good references from all previous landlords

-Credit/Background check will be performed at applicants expense

I'm left with 3 viewings scheduled for this week. Hooray! After I get over the excitement of possibly getting a renter I start to think about some of the information I got on the phone call. 

The lady asked if the minimum salary was for an individual or household. I say household. She says "Ok, we'll be fine then....between myself, my boyfriend, his brother and his cousin we meet that". This gives me pause but I couldn't think of anything else to say/question so I went ahead and scheduled the viewing.

Now, I don't have anything concrete and the application will give me more to work off of but I'm getting a gut feeling that this won't be the best set of tenants. 

I guess my question is this, can you decline an applicant based on a feeling as long as it's not based on race, religion, age, etc. I get a bit of conflicting information when reading tenant screening blogs. For example saying to look at a tenants car condition for an indication of cleanliness but later saying that you should clearly let an applicant know why they were rejected (would you tell them it's because their car was dirty)?

Thanks for any help to this nervous newbie. 

 Greg, 

Hopefully there might be much more for you to reject them don't be scared landlords can reject a tenant for lots of reasons and you need to treat everyone the same. if you have a two bedroom apt to rent you can say only two humans per bed room which means no more than 4 persons per 2 bedroom apartment so they cant start adding in a cousins income that is not who is renting the apartment and that 3 to 1 ratio is NOT gross it is take home pay

Originally posted by @Account Closed :

Hi all, I've been a while researching and learning about renting my first investment property and I finally posted my rental ad this afternoon. Our market is pretty good in Edmonton and I've received a phone call and 6 emails so far about the house. 

To pre-screen I've used the following minimum requirements on my reply emails/phone conversation.

-Salary must be equal to or greater than 3x rent

-No previous evictions

-Good references from all previous landlords

-Credit/Background check will be performed at applicants expense

I'm left with 3 viewings scheduled for this week. Hooray! After I get over the excitement of possibly getting a renter I start to think about some of the information I got on the phone call. 

The lady asked if the minimum salary was for an individual or household. I say household. She says "Ok, we'll be fine then....between myself, my boyfriend, his brother and his cousin we meet that". This gives me pause but I couldn't think of anything else to say/question so I went ahead and scheduled the viewing.

Now, I don't have anything concrete and the application will give me more to work off of but I'm getting a gut feeling that this won't be the best set of tenants. 

I guess my question is this, can you decline an applicant based on a feeling as long as it's not based on race, religion, age, etc. I get a bit of conflicting information when reading tenant screening blogs. For example saying to look at a tenants car condition for an indication of cleanliness but later saying that you should clearly let an applicant know why they were rejected (would you tell them it's because their car was dirty)?

Thanks for any help to this nervous newbie. 

 if it helps I have over 140 apartments and this is my qualifications i post on our web site:

  • Amount of applicants: No more than 2 people/ bedroom, 4 people / 2 bedroom apartment including children and adults.
  • Pets: No more than 2 pets, upon pet approval only.
  • Take home pay=at least 3 times rent. Income have to be verifiable.
  • Criminal record : No felony convictions, no violent crimes convictions in the past
  • Eviction record: No evictions in the past (we may consider person who has eviction in the distant past ONLY if it was paid off), no history of property damages from previous rentals.
  • Credit report: No accounts more than 60 days past due (unless it is medical bills or student loans)
  • Positive references from both current and past landlords

Pet approval:

Cats : We allow domestic well trained well cared for indoor cats. If you prefer to let your cat out, it has to be supervised and leashed.

Dogs : We allow adult well trained and well cared for dogs, they should be vaccinated up to date, clean “bite record from the vet” is required. We will request to meet your dog in person prior to signing rental agreement.

Fees:

$35 one time application fee for every adult that will be living in the unit. Nonrefundable, approved or rejected.

$200-$500 – additional security deposit for pets- refundable at the time of move – out if there is no damage to the property, caused by pets or their human guardians.

$ 25 monthly “pet rent” – for every approved pet

Late fees – if rent is late – described in rental agreement (in SC after the 5th of the month eviction proceedings begin)

@Steven E.

Thanks so much, this is great info. It's reassuring to know what methods others are using. Really appreciate it.

No problem Greg, I also have a great rehab check list excel form we use you can have it No Charge just ask and I will get it to you it is the best form you ever saw for flips or rehabs of old props I just bought a 1968 four plex no one touched this pace in 40 years  oh boy what fun LOL

Greg, you didn't mention what your unit is.  If you have four people applying for a four bedroom house, then their application would be less concerning than if you have four people applying for a one bedroom apartment.  I like Steven Elving's checklist he posted.

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