PM letting owner pick the tenant?

Question

Hey all! I am a PM in Denver and found out through some networking that another company is letting their owners pick which approved applicant they want in their rental property. This is something we have avoided as I have always been taught that we are the experts in the field and should be placing based on the rental criteria we have setup. Our criteria says we will screen up to 3 applicants at a time and the first applicant that is fully approved will have the option to move the process forward and put down a deposit.

Has anyone had any luck allowing the owners in who will live in the managed property? Any fair housing concerns? Also, if you have any best practices that have worked for you either when you are choosing the applicant or allowing the owner do so, I would love to hear and discuss.

Much appreciated!

Has anyone had any luck allowing the owners in who will live in the managed property? Any fair housing concerns? Also, if you have any best practices that have worked for you either when you are choosing the applicant or allowing the owner do so, I would love to hear and discuss.

Much appreciated!

Greg M. · Answer

Experts? 🤣🤣🤣  Working in the industry does not equal being an expert.

The rental criteria is a minimum list of requirements to be considered for the unit. It is not a pass this before another can and it's yours. By rushing to install a tenant that just made the cut, you're potentially passing up more qualified tenants and therefore harming the owner.

The attitudes of PMs in this thread are exactly why I'd never want to use one. They put themselves above the OWNER of the property. They seem to forget who pays their salary.

Michael Smythe · Answer

How is an owner a better expert than you at screening applicants?

Greg Weik · Answer

Working in the industry does not make someone an expert - I 100% agree with this.

That said, I am an expert.  My clients hire me because I have knowledge, experience, and judgment that far surpasses theirs when it comes to the world of property management.

Clients don't hire me so they can tell me what to do.  Clients hire me to do what's best for them, in my expert opinion.

Even in your example, more context would be required to determine if "approving" or "waiting" is the better choice once a tenant has passed what you call the minimum requirements.  Questions need to be asked and answered: "What's the context of the listing," "How long has it been on the market,"  "Is there other interest,"  "Are there other showings," "What are the area tenant demographics likely to yield in terms of additional applications," etc. etc.

You're doing your client no favors if you cost them an additional month of vacancy, and no one else comes along who is better.

If you believe the application is marginal, and if you have written qualifications that are not fully met, sometimes the best course of action is a conditional approval with a larger deposit.  It all depends, and this is where expertise and experience come into play, and it's why individual landlords would be out of their depth trying to make a decision.

David Walton · Answer

@Andrew Syrios, thank you, and I agree with you and that was our attorney's recommendation and how we run our business. I was more curious if anyone was running their business with that model and if so, how did they skirt around the fair housing issues, amongst others.

Andrew Syrios · Answer

I think the "skirting around" fair housing here would just be that it's unlikely the tenant would find out and many probably wouldn't have a problem with the method (although many would definitely have a problem with the choice). But I think it's basically just asking for trouble and a matter of when not if Fair Housing will come knocking on their door if they keep that method up.

Andrew Syrios · Answer

You might want to speak to an attorney but I think generally speaking as soon as a tenant's been approved, they should be notified and it's then basically a first come first serve regarding putting down the deposit. Again, I'm not an attorney but doing it the way that other manager is sounds like a recipe for getting in trouble with fair housing.

Ryan Denman · Answer

Owners are not professional property managers, thus should not have a say in which tenant is placed.  First qualified tenant should always be the one to get the vacancy.  Any deviation from this rule risks a fair housing violation.

Gerry Chacon · Answer

Hi David,

There are several important reasons why it’s not advisable to let the owner choose the tenant, even from a pool of pre-approved applicants.

First and foremost, as you mentioned, there are significant Fair Housing concerns. Owners may unintentionally (or otherwise) make decisions that violate these laws, putting both themselves and your management company at legal risk.

Second, your existing screening process, which prioritizes objectivity by approving the first qualified applicant, is there to maintain consistency, minimize liability, and protect your team’s credibility. Allowing an owner to override this system can blur professional boundaries and undermine your authority and expertise as a property manager.

In the long term, this can create confusion, damage relationships with applicants, and lead to operational inefficiencies. Clear criteria and firm processes not only reduce risk but also build trust and predictability for all parties involved.

Happy to share more examples if helpful

Taylor Wilson · Answer

I once worked with a property manager who allowed me, as the landlord, to choose the renter. They provided me with standardized reports that presented all the information in a consistent, uniform format, tailored specifically to the evaluation criteria we had agreed upon. So I didn’t receive the full application but only the essential details needed to make my decision.

Bill B. · Answer

Back when I got started (1999/2000) I used to get final approval on “questionable” tenants. (Lower credit score but based on medical debt. Shorter employment history but new to area, or recently divorced.). That all went away around 2005?

I kinda liked being “involved” but the reasons I choose to use a PM are…

Know current market rent and keep up with increases

Charge late fees I might let slide

Have a list of contractors that want to keep them happy 24/7

Keep up with current law changes regarding notice periods, charges allowed

Keeping my screening/applications legal.

With a dozen properties I work 30-60 minutes per month.

So while real estate can be extremely boring, it’s one more thing the experts do for the amount we already agreed on. So more power to them.

PM letting owner pick the tenant?

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