Properly rejecting a rental candidate

4 Replies

Hey Everyone- So I am new landlord and am very close to getting my first tenants in my  rental unit. My dilemma is I had two groups send in applications at the same time, pass background & credit check but one group is significantly better candidates. IE- more stable income, more tenant references, and the biggest reason-they are willing to pay an additional non refundable fee for their pet. I have read the BP book so I know how important/ fragile  is can be to reject a potential tenant  the right way. My question is, is it ok to simply get back to them and say there  are better qualified candidates? Also if this group is looking for a more detailed response  in addition to my adverse action notice as to why we are choosing another group, are the reasons listed above okay to use since they don't fall under any discrimination laws ( age, sex, religion) Thanks for your time and help with this

You never tell any applicant why they were rejected. You do not tell them a more qualified candidate was selected. You never give reasons or details and if questioned you simply state that you do not release that information.

Unless your state regulations state otherwise they are not entitled to know and to protect yourself legally you never say anything to rejected applicants. If you want to avoid ending up in court everything you say must be very limited. 

Rejected applicants are told....."I am sorry to inform you your application has not been accepted, the unit has been rented"

Did both candidates pay an application fee? Did you process the applications simultaneously? Did they both meet your minimum criteria to rent and thus both qualified? You picked one of the two qualified candidates and now will be informing the other one that they were not selected?

If your jurisdiction requires the use of a standard Adverse Action Notice, use that. But also soften the blow with a polite phone call. This will be helpful to them since they will know right away that they will need to continue their housing search.  Also "not selected", is easier to accept than "rejected". So I phrase it that way.

Our state requires us to reveal our rental criteria before we can accept money for an application and that we give the applicant a reason for rejecting their application. The reason does not need to be specific. It can be as simple as "based on information contained in a consumer credit report" or "based on information received from previous rental history." Check to see what is required in your jurisdiction. In your situation, it could be "Thank you for your application. We've selected another candidate who applied at the same time."

If it were I, I would also refund the application fee to the applicant that was denied. Not because I needed to, but because it's the right thing to do. I'm not in the business of making money from application fees.  Although there are some landlords who feel justified in collecting application fees from whomever is willing to apply and keeping them even if they know the applicant won't qualify or will be rejected, I'm not one of them. Refunding the application fee also helps to avoid push back or even worse, a formal complaint based on real, perceived, or imagined discrimination.