Denying applicants?

Question

Are you suppose to send a letter after you have reviewed an application and you find that the applicant isn't suited for a rental? If so I'm wondering about what things are acceptable to deny an applicant.

Obvious reasons:

Bad credit history, evictions, judgments, criminal record, not enough income, bad rental background check.

What about:

short employment history, no bank account or short banking record, short or no rental history, what about rental history being with parents?

Most parents are going to vouch for their kids, but it's a short rental history to background check for younger folks. I guess you could ask for them to co-sign, which probably isn't a bad idea. If they don't co-sign then it's probably not a good idea to rent to the tenant.

Marcia Maynard · Answer

We are required by Washington State Law (RCW 19.182.110 & RCW 59.18.257) to provide rejected applicants with an "Adverse Action Notice". It is a form letter that has boxes to check.

Adverse action (rejection) on an application may be based on one or more of the following criteria:

1. Information contained in a consumer credit report.

2. The consumer credit report did not contain sufficient information.

3. Information received in a criminal record.

4. Information received in a civil record.

5. Information received from references.

6. Information received from previous rental history or reference.

7. Information received from an employment verification.

8. Inaccurate, false, or misleading statements or missing critical information on application.

We are also allowed to approve an application with conditions, such as:

1. Residency requires an increased monthly rent of $________.

2. Residency requires increased [   ] fee or [   ] deposit of $_______.

3. Residency requires last month's rent.

4. Residency requires a qualified guarantor.

5. Other requirement.

As you can see, it is important to follow clear legal criteria and to communicate your rejection or approval of an application in a professional manner. You do not need to go into detail with the applicant, but you need to keep documentation that supports your decision.

Hope this helps!

John Casmon · Answer

In a multiple application scenario, is it okay to simply tell the other applicants that you picked someone else, without going into the rationale? Also, does the order matter in which the applications were received?

Steven Gesis · Answer

Hello Chris,

Good question! The first step is to check with the law of the place you live. Make sure you do not discriminate. Otherwise your suggestions are good reasons to state why you are denying someone.

When writing the letter try to be less specific than you might think. Sometimes using a template is a good way to do it. You want to sound personal, but not too much. List basic reasons, such has delinquent accounts, short length of time accounts have been established.

It's not easy denying someone, but as long as you have a system in place it might go a lot smoother.

Let me know if you have any questions.

Sara N. · Answer

I think be generic and general as possible. Here in DC we have many young professionals with steady jobs, great scores, references, etc. who want to rent our place (that's in a desirable location, lower priced) and  we get too many great applicants that it's hard to pick from. At the end after all the comparisons and since they all are qualified, we go with our guts and whom ever seem like they cleanest, will keep the place in good condition and likely  stay for longer. We send everyone else a generic email saying they were all very qualified but that we picked someone else.

Scott Carder · Answer

Also they can be pre-screened just in a conversation, and that will weed out the majority of them, before they even fill out an app.

Steven Gesis · Answer

I understand this can be a difficult topic to think about when sending a denial letter. One of the best policies is to be honest with why they were not accepted into your rental. You can advise them that maybe their credit score was too low, or you feel they did not meet your criteria in terms of monthly income. If you feel they will not be a good tenant based on their past rental history, maybe they have broken a lease, or their last landlord said they were not good tenants, make sure to simply tell them.

You do not have to go into detail. Many times applicants will have a reason why something happened to them in the past. Just tell them what is your policy and why you made your decision.

Please let me know if you have any questions.

Micah Luke · Answer

We've had some good applicants who just needed more of a rental history or work history, too. We thank them for their application and time and then ask if we can follow up next time we think we have an opportunity for them. Its usually met quite favorably.

Gives us a good list of go to's that maybe just had one or two things that could essentially be "fixed" given 6 mos or so.

Mindy Jensen · Answer

@Chris Sones, listen to @Marcia Maynard. Go to the file she is talking about, and read it thoroughly. She's a smart woman, and you would be wise to follow any of her advice, provided of course that you are in compliance with the laws of your state.

Kim Martin · Answer

I agree with Marcia - I would also add that less is more.  Giving a general reason, as in Marcia's example, is much better than being specific.  The more specific you get, the easier it is to make an error on a date or on a dollar amount.  Also, do not make any notes on your records, as that can be used in a court of law and your notes may not even pertain to the data but it could be seen as discriminatory, etc.

Marcia Maynard · Answer

First, check with the landlord-tenant laws for your jurisdiction. Some provide clear guidelines as to what you are required to do by law.

Second, learn and abide by federal, state and local non-discrimination laws. The Fair Housing Act outlines protected classes and other laws for your jurisdiction may apply as well.

Third, establish Rental Criteria that is in compliance with the law. You can see a sample of ours by looking under the BP Resources Tab/File Place/Other Documents. Screen your applicants according to your criteria.

Denying applicants?

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