How to decline tenant application correctly & politely?

[Catherine Javier]

Hello BP family! Asking for help & guidance, I am new in this landlording & tenant screening.

We have a two bath, two bedroom condo in Orlando. It is A midterm rental. The current applicant wants fo lease for 6 mos. He has 500 credit score and has two criminal backgrounds. 1st criminal was traffic- running in red. 2nd was battery of an officer in 2019 and was charged as felony.  We are not comfortable renting out to him. Our mindset might be wrong, pls advise.

If we decline, how do we tell him correctly & politely? 

Thank you!

[Richard F.]

Aloha,

You need to use a standardized Adverse Action letter to notify all denied applicants. Here are some samples:

https://www.consumerfinance.go...

Also, you REALLY need to rethink your credit score criteria:

[Eliott Elias]

Stop managing and dealing with tenants. Hire a property manager. If you are having trouble with this, you are going to learn a lot of hard lessons moving forward. 

[Laura Stayton]

Quote from @Catherine Javier:

Hello BP family! Asking for help & guidance, I am new in this landlording & tenant screening.

We have a two bath, two bedroom condo in Orlando. It is A midterm rental. The current applicant wants fo lease for 6 mos. He has 500 credit score and has two criminal backgrounds. 1st criminal was traffic- running in red. 2nd was battery of an officer in 2019 and was charged as felony.  We are not comfortable renting out to him. Our mindset might be wrong, pls advise.

If we decline, how do we tell him correctly & politely? 

Thank you!

 You need an adverse action letter to send and with that they can get a copy of their credit report if that's the reason for the denial  I certainly wouldn't rent to them either.  

Also, you need to establish what a minimum credit score needs to be and make that universal for all people who apply to protect yourself.

[Tim J.]

[Jim K.]

@Catherine Javier

As a C-class landlord mostly renting sub-$1K apartments in urban areas, this is what I think about this.

One of my best tenants is a former Hell's Angel runaround and his common-law wife on Section 8, with a lovely big dog named Spirit. In the last two years, they have never been a day late with the rent. As far as his political convictions go, as he puts it, "I ain't going back to jail for nobody or nothing."

So here's my take on the "criminal" background. This guy has personally paid the price for pushing back against a police officer. He knows what it is. Other than that, he ran a red light once in his life. That's not a particularly serious criminal record, and he will probably never be violent again. All the same, a lot of landlords simply won't rent to this dude, and he knows it. Their loss could be your gain.

The credit score is far more important here, to my mind, but bank credit ratings aren't designed to pick out good tenants for landlords. You need to investigate his credit history in more depth. Where did the defaults come from? Credit card debt? Was it his own debt or, perhaps, did his ex-wife run up a huge bill and leave him? Late utility payments? That's a BAD indicator. Medical debt? The sad truth is that medical debt can happen to anyone, and psychologically, especially for people who have never had any money, it can be devastating and make them do stupid things.

Do you want to specialize in the high-profit, high-risk niche I occupy? If so, be aware that you're  going to make a few poor decisions and get burnt if you take risks on tenants like these. At the same time, they may turn out to be fantastic tenants. The way to minimize your risks is to go deep, really investigate these people. And you must always be ready to evict and understand the procedure and law in your area thoroughly.

If you're looking for a nice, easy and polite way to get rid of this guy, it probably isn't going to happen. No matter what you try, he's going to push you. He has little to lose. So the best bet is to look this guy in the face, certainly with someone large backing you up if you don't feel comfortable talking alone to this man, and tell him openly, "I can't take a chance on you. This isn't a charity. I have to protect my investment, and you don't have the credit score or crime-free background I'm looking for in a tenant."

Good luck to you, Catherine.

[Jill F.]

In Ohio, we don't have to say anything at all unless we pull a credit report-- so we wait until last to do that. If you want to deny him based on credit, send him an adverse action letter and make sure you apply the same standard to all applicants. What was the outcome of the battery charge? (You really can't turn him down for that if it was dropped or if he was found not guilty).  Why is he looking for midterm rental and not a longterm? That seems like the most important thing to know for a midterm rental. Does he make enough money? does he have savings or any assets?