I am denying a prospective tenant based on information in the credit report, I know to send a letter and I have one to send. Do you also call them to let them know they have been denied the rental? How do you word it and how much information do you tell them?
I'm thinking to call and just say "Based on information contained in the background report, we are denying your rental application" and leaving it at that. Do I need to go into any more details?
Alternatively, can I just send the letter via email and that cover everything or does it need to be actually mailed? If Is end through email it will be instant and no need to call, right?
Great question Therese...I am interested in this as well and would like to see the feedback!
The letter should be mailed, I would also call -- it will prevent any potentially "angry" situations with the prospect if they miss the letter. Plus it's more courteous to let them know sooner rather than later.
Just tell them that their report did not pass all of the criteria required to qualify. You don't have to tell them over the phone what it is, I actually think that it's illegal to do that, so if they ask what made them declined, just tell them that the letter with the information about where you obtained their info and your criteria is being mailed. I've had to make this call many times, it's awkward but it usually only lasts a moment. Most people just hang up on you.
I would do both. Send a letter, but also have the courtesy to call the potential tenant, because they're waiting for the answer and planning to move accordingly.
Here in the Los Angeles area, it seems to be the common thing for landlords and property managers to not give you an answer at all, thinking that you'll get the point, if they don't respond to your calls. I find that incredibly rude, because I have no idea whether I missed an email with a question or if there's some kind of misunderstanding or if it's because I have a dog, or because I'm self-employed or whatever.
When you're sitting there, thinking that you've found your great next home, you really need to know where you stand.
Thank you guys for your answers.
I will do a brief call and mail the letter. That's what I figured I should do, but wanted to check here first.
You are not required to notify by phone, but you are required to send an Adverse Action Notice. I understand you want to be courteous, but I wouldn't suggest talking to applicants about their failure to meet your criteria. It's too easy to accidentally say something that could land you in a lawsuit. You can say they didn't meet your criteria and explain the reason for their denial if you decide to make the call.
Get in the habit of explaining your screening criteria before they apply. Consider including a disclosure form with the rental application. The denial letter shouldn't surprise your applicant if they know what's on their credit report. The Adverse Action Notice will give them everything they need to initiate a dispute if there are inaccuracies on the credit report.
Make sure your Adverse Action Notice is compliant with FCRA and Regulation B. Your Consumer Reporting Agency (CRA) should be able to help you with this or feel free to contact me directly with questions. Also, make sure you are applying the same screening criteria to all your prospective renters equally and don't make exceptions.
Overall, you're dealing with real people and that's so often forgotten with the business mindset. Moving is a big deal to a person. There's a timeline involved and if you only mail, the applicant, who's paid probably an application fee, looses several more days, in which they could have looked for another place. But, just like you don't want applicants to fill out 10 applications and then see what sticks, if you don't even call, that's really the only thing a potential tenant can do. But then landlords get mad, if they decide on one and they have chosen another place, because they had to put in several applications.