Allow co-signer to compete with another tenant application?

7 Replies

We were surprised to find out after having tenants in our house for two years that the rental market is booming in Richmond, VA. We had over 50 inquiries when listing the house for rent. The current tenants showed the house to two groups one morning who both submitted rental applications. They both meet our criteria for renting but we haven't run credit yet.

Both have verified income. Both make 6x the rental rate and both have excellent references. We have never been in a situation where we have had to choose. Home is a 2 bedroom 1950s single family home with a fenced yard and hardwood floors. Pets allowed with deposit.

Tenant A

Couple with dog, moving to town for a job. Shorter job history only because they graduated college in the past few years. One admits to mediocre credit but offered to have a co-signer.

Tenant B

Viewed the house first (just because that's when the current tenants scheduled him) and was the first to submit a completed application. Man and son, moved to town for a job, no pets. Steady job history.

Do we allow Tenant A with "mediocre credit" to have a co-signer apply and then compare their credit to that of Tenant B to be fair? Or do we just run the credit of Tenant B since they submitted the application first and viewed the home (20 minutes) before Tenant A? Do we have to run credit of both parties of Tenant A in order to legally "disqualify them"?

It is very important that you stay in compliance with fair housing laws.  Do not discriminate in any way shape or form. 

What I do is set a clear list of rental criteria.  That would include whether we allow cosigners or not.  We will take the first qualified applicant that meets all of our criteria. 

There are tenants that understand these laws and will file against you if they feel discriminated against.  The consequences can be severe!

Originally posted by @Steve Olafson :

It is very important that you stay in compliance with fair housing laws.  Do not discriminate in any way shape or form. 

What I do is set a clear list of rental criteria.  That would include whether we allow cosigners or not.  We will take the first qualified applicant that meets all of our criteria. 

There are tenants that understand these laws and will file against you if they feel discriminated against.  The consequences can be severe!

Certainly aware of the danger of discrimination which is why we are trying our best to be fair - in this case we are not discriminating against any protected class - just trying to determine which tenant best qualifies when they both submitted applications and both meet all our criteria. Typically we would allow a co-signer if a tenant could not qualify on their own but if Tenant B meets our criteria with no co-signer do we need to allow Tenant A to have a co-signer apply?

Sounds like tenant B was actually first to apply, so unless you are using the "beauty pageant" approach (taking the one that looks best) then you should process tenant B and see if they pass or not. 

BTW - Lots of inquiries like that could be a reflection that your asking rent us underpriced ...

Originally posted by @Robert C. :
- in this case we are not discriminating against any protected class - just trying to determine which tenant best qualifies when they both submitted applications and both meet all our criteria.

 They don't need to be a protected class.  I would recommend that any landlord take a class on fair housing laws.  It would be quite "eye-opening".

Originally posted by @Steve Olafson :
Originally posted by @Robert C.:
- in this case we are not discriminating against any protected class - just trying to determine which tenant best qualifies when they both submitted applications and both meet all our criteria.

 They don't need to be a protected class.  I would recommend that any landlord take a class on fair housing laws.  It would be quite "eye-opening".

Since we told them we were accepting applications until the end of the day Monday from everyone who viewed it Saturday morning (since some were from out of town) and did NOT say we are processing them in the order received we're out of luck for selecting the first submitted application? Can we use a point system and give an extra point to the person who submitted the application first?

Originally posted by @Robert C. :
Originally posted by @Steve Olafson:
Originally posted by @Robert C.:
- in this case we are not discriminating against any protected class - just trying to determine which tenant best qualifies when they both submitted applications and both meet all our criteria.

 They don't need to be a protected class.  I would recommend that any landlord take a class on fair housing laws.  It would be quite "eye-opening".

Since we told them we were accepting applications until the end of the day Monday from everyone who viewed it Saturday morning (since some were from out of town) and did NOT say we are processing them in the order received we're out of luck for selecting the first submitted application? Can we use a point system and give an extra point to the person who submitted the application first?

You can do what you want.  I am not trying to tell you how to do anything.  The intent was to tell you what I do and give a reason why.

I want to stress again that all landlords and managers of residential rentals should study up on fair housing laws.  Then you can make your own educated decisions.

Originally posted by @Steve Olafson :
Originally posted by @Robert C.:
Originally posted by @Steve Olafson:
Originally posted by @Robert C.:
- in this case we are not discriminating against any protected class - just trying to determine which tenant best qualifies when they both submitted applications and both meet all our criteria.

 They don't need to be a protected class.  I would recommend that any landlord take a class on fair housing laws.  It would be quite "eye-opening".

Since we told them we were accepting applications until the end of the day Monday from everyone who viewed it Saturday morning (since some were from out of town) and did NOT say we are processing them in the order received we're out of luck for selecting the first submitted application? Can we use a point system and give an extra point to the person who submitted the application first?

You can do what you want.  I am not trying to tell you how to do anything.  The intent was to tell you what I do and give a reason why.

I want to stress again that all landlords and managers of residential rentals should study up on fair housing laws.  Then you can make your own educated decisions.

Thanks @Steve Olafson - it certainly seems like your way is much simpler and one we will highly consider next time.

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