Declining a tenant's application

Christian Bors · 2015-12-18T08:12:16-08:00

I have a prospective tenant that filled out our application. Originally, her fiancée and her 3 kids were going to move in. I told them our process and standards we require for our rental units. First, they must fill out a preliminary application. If they pass, we then require a criminal and credit check from smartmove. Anyways, I get both applications back (His and her). On his application he states he was evicted last year. Easy turndown. I spoke with her on the phone and said unfortunately he does not meet our standards. The application has been turned down. She then says well I've decided I don't want him to live with me and kids (lies! I know he's going to move in with you). I was planning on leaving him because we have been fighting. She would still like the apartment. Her income, Social security $1500 (by the way she's 30 years old and looks perfectly healthy) and child support $1000 does meet our requirement. Does child support count as income? I requested both the reward letter from SS and the child support payment agreement along with birth certificates for each child. I also told her our strict lease agreement that specifically prohibits anyone staying at the property for longer the 10 days. The point is, there are many red flags. This application is getting turned down. I'm pretty sure her credit score is crap. She told me she has some delinquencies with credit cards etc. She won't qualify, however she still persists on filling out the smartmove app. I am trying to save her the $30 dollar fee. What should I do? I told her I recommend not filling on the smart move because of these concerns, but I cannot make a true decision without the application being fully completed (smart move report). I don't understand why she doesn't get the hint. Should I run the report? I just want to be compliant and make sure I am not discriminating etc...

Matt Motil

Rental Property Investor · Cleveland, OH · Member since 2015 · 1k+ posts · 880 votes

10y

Have her fill out the report if she's insistent on doing so. It's her money. I'm assuming you have other candidates for the property, so you can easily find a reason why they are more qualified as tenants than her. From there it's easy.

2 Reply

Jeff B.

Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes

10y

DO NOT provide reason(s) for the rejection and write the denial letter - - just "Sorry, you do not meet our selection and will not be offered the apartment". THEN, document the name, address, phone & date of the application, and the criteria which she did not meet. File in your rejection file.

2 Reply

Christian Bors

OP

Real Estate Agent · Mechanicsburg, PA · Member since 2014 · 529 posts · 217 votes

10y

@Jeff B. I guess I was trying to be the nice guy and save her a few bucks.

0 Reply

Matt Motil

Rental Property Investor · Cleveland, OH · Member since 2015 · 1k+ posts · 880 votes

10y

Originally posted by @Christian Bors:

@Jeff B. I guess I was trying to be the nice guy and save her a few bucks.

Good advice from J

As for being nice... a friend of mine that's an attorney always says, "no good deed goes unpunished". In the process of being nice, she wants to fill it out and you're trying to keep her from doing it. All she needs is to create some excuse why she feels you don't want her filling out the application and bing, bang, boom, lawsuit. You already said you think her SS is suspect... don't need her adding to her passive income by suing you for discrimination.

0 Reply

Jacqueline Carrington

Investor · Corona, CA · Member since 2014 · 746 posts · 372 votes

10y

Never make assumptions about people. You cannot assume she won't pass the credit check until you run the credit. Her child support should count as income.

If she wants to apply, let her apply. Doing otherwise can be portrayed as discrimination. As for her denial, it will be based solely on the qualifications you have set. As stated, do not tell a specific reason for denial. Simply saying "the credit application did not meet our guidelines. Here is the phone number if you'd like additional details." Pretty much the same denial letter any credit applicant gets when they aren't approved.

1 Reply

Jeff B.

Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes

10y

Originally posted by @Jacqueline Carrington:

Simply saying "the credit application did not meet our guidelines.

NOT the credit app, but the application for the apartment. If you say CR did not pass muster, then you must give here the formal letter granting her access to the CR report.

0 Reply

Jacqueline Carrington

Investor · Corona, CA · Member since 2014 · 746 posts · 372 votes

10y

Originally posted by @Jeff B.:

Originally posted by @Jacqueline Carrington:

Simply saying "the credit application did not meet our guidelines.

NOT the credit app, but the application for the apartment. If you say CR did not pass muster, then you must give here the formal letter granting her access to the CR report.

I haven't used the screening software the OP is using. I used Core Logic SafeRent. On the back end, you can enter all your screening criteria. So if the credit does not suffice, it auto generates a denial letter and they can contact Core Logic SafeRent for additional details about their credit report. No extra steps needed other than sending them the letter.

When declining someone, you don't need to give specifics, but a general: credit, background (criminal) or income are really the only reason(s) for denial if you have standard application guidelines.

By just saying "your application didn't pass" and not giving a general why with documentation opens a can of worms.

1 Reply

Jeff B.

Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes

10y

Originally posted by @Jacqueline Carrington:

Originally posted by @Jeff B.:

Originally posted by @Jacqueline Carrington:

Simply saying "the credit application did not meet our guidelines.

NOT the credit app, but the application for the apartment. If you say CR did not pass muster, then you must give here the formal letter granting her access to the CR report.

When declining someone, you don't need to give specifics, but a general: credit, background (criminal) or income are really the only reason(s) for denial if you have standard application guidelines.

By just saying "your application didn't pass" and not giving a general why with documentation opens a can of worms.

Sorry, just not so-- Inability to verify employment, income, discovery of false statement(s), listed on meganslaw.com, too many persons for the unit.

You raise the issue of a can of worms, which is why you must document your criteria and your findings which disqualify.

0 Reply

Jacqueline Carrington

Investor · Corona, CA · Member since 2014 · 746 posts · 372 votes

10y

Originally posted by @Jeff B.:

Originally posted by @Jacqueline Carrington:

Originally posted by @Jeff B.:

Originally posted by @Jacqueline Carrington:

Simply saying "the credit application did not meet our guidelines.

NOT the credit app, but the application for the apartment. If you say CR did not pass muster, then you must give here the formal letter granting her access to the CR report.

When declining someone, you don't need to give specifics, but a general: credit, background (criminal) or income are really the only reason(s) for denial if you have standard application guidelines.

By just saying "your application didn't pass" and not giving a general why with documentation opens a can of worms.

Sorry, just not so-- Inability to verify employment, income, discovery of false statement(s), listed on meganslaw.com, too many persons for the unit.

You raise the issue of a can of worms, which is why you must document your criteria and your findings which disqualify.

Lol. That's what I said.

0 Reply

Marcia Maynard

Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes

10y

Originally posted by @Jeff B.:

DO NOT provide reason(s) for the rejection and write the denial letter - - just "Sorry, you do not meet our selection and will not be offered the apartment". THEN, document the name, address, phone & date of the application, and the criteria which she did not meet. File in your rejection file.

This may work in some jurisdictions. However, check with landlord-tenant law for the location of the property. For example, in Washington State we are required to send an "Adverse Action Notice" which does give the tenant general information as to why they were turned down.

Most important, establish good tenant screening criteria (in writing) that is compliant with federal and local non-discrimination and fair housing laws. Then process every inquiry and application in the same manner, taking into account that criteria.

0 Reply

Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

10y

Do not concern yourself about her $30 application fee. Once credit/criminal check run there may be good reason to deny candidate as I do believe there is good chance she lied about who is planning on living in the unit.

If she passes the credit/criminal check this would be worse case but you can reiterate the occupancy rules and consequences of having some one not on lease occupy unit (eviction). Hopefully she either walks away or follows the occupancy rules but if not you need to enforce the rules.

Good luck.

0 Reply

Wilson Churchill

Madison Heights, MI · Member since 2014 · 471 posts · 132 votes

10y

I try to provide as little information as possible. I let anyone fill out an application. I screen all applications. If I need to reject someone politely, I simply tell them that I have approved another application that was completed before theirs, and that I chose them because they applied first and I have to be fair. This is easier than telling someone that your search at the courthouse revealed multiple evictions and judgments and lets them down easily.

0 Reply

Jeff Gates

Investor · Cathedral City, CA · Member since 2014 · 481 posts · 170 votes

10y

If you did a credit check your denial is monitored by consumer laws. That why a credit check has is own risks.

++++++++++++++++++

The FCRA States:

If you're a landlord, you may use consumer credit reports to evaluate rental applications - as long as you follow the provisions of the Fair Credit Reporting Act (FCRA).

What is an Adverse Action?

An adverse action is any action by a landlord that is unfavorable to the interests of a rental applicant. Common adverse actions by landlords include:

Denying the application;

The Adverse Action Notice

When an adverse action is taken that is based solely or partly on information in a consumer credit reports, the FCRA requires you to provide a notice of the adverse action to the consumer. The notice must include:

the name, address and telephone number of the CRA that supplied the consumer report, including a toll-free telephone number for CRAs that maintain files nationwide;
a statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give the specific reasons for it; and
a notice of the individual's right to dispute the accuracy or completeness of any information the CRA furnished, and the consumer's right to a free report from the CRA upon request within 60 days.

Disclosure of this information is important because some consumer reports contain errors.

The adverse action notice must name the CRA that provided the report to the landlord, even if the information came from another CRA. For example, a report from XYZ TenantScreen includes a credit report from ABC Credit Bureau. The credit report includes negative information that prompts the landlord to turn down the rental application. The adverse action notice should name XYZ TenantScreen as the CRA because XYZ TenantScreen actually provided the credit report to the landlord. The notice also can explain that XYZ TenantScreen got the credit information from ABC Credit Bureau, but that is not required under the FCRA.

Written notices provide proof of FCRA compliance.

0 Reply

Michael Noto

Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes

10y

This is one of those posts where people can't say what they want to say because they are afraid of being labeled discriminatory.

All I will say is, you made a great point regarding the boyfriend. If you approve her he is 100% moving in and it will be a nightmare getting rid of him.

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Declining a tenant's application

Declining a tenant's application

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