Rental Applicant Going Through Divorce a Negative?

Question

Hello! I have a few fairly solid applicants for one of my units, but one I'm slightly leaning towards. However, she said she's going through a divorce (it would just be her renting) and I started to wonder if that could complicate her financial future, if it's not already complicated. I've actually gotten divorced (then re-married!) myself, but we were quite easily able to split things between the two of us, with no issues at all. Therefore, I don't have an understanding of how the money aspect of it goes, when there's a battle (which she did mention vaguely in passing)--specifically in Colorado.

Should it be of any concern to me? Or does it really depend on the intricacies of their situation? She was very open and friendly and I would guess--open to filling me in on some details, if I were to ask-- but I'm not even sure if that's appropriate to ask. I mean-- I thought it was, but when I mentioned it to my wife, she thought it might not be appropriate. Guide me, BP, guide me.

Michael Boyer · Answer

Brian, I would stick to all your standard screening practices and procedures. Use all the same objective facts and figures in your app and process. If she has has the documented income alone and verified employment (and meets other criteria and factors) I would not get into marital status at all.

Yes, she could be in transition and the financial picture could change: assets, liabilities and high legal fees (which could zap some rent dollars) but this can happen with anyone for a number of reasons (accident, job loss, medical issues).

I would look at the tenant apps again and pic your best qualified person (blocking out marital status or non-status). I have had good tenants stay through the lease during the divorce (last thing they wanted was to start their solo renting history with a black mark).

Bill S. · Answer

@Brian Kraft for me, if she qualifies based on income (3x rent) then I don't worry too much. Make sure you have a early termination clause in your lease. It is not uncommon for them to reconcile at the last minute and then she wants to bail on the lease. Mine is for a little less than 2 months rent and most pay it. Covers my costs and my time to re-lease the property. Also make it clear that anyone coming to live there must be screened. Screening makes it so that they don't move in their ex or their new SO without you getting a chance to vet them.

IMO if the tenant's life is drama free (squeaky clean criminal record and glowing employer references) before the divorce then the divorce will also be drama free. If there is drama (relationship issues impacted work performance, restraining orders, police reports) in their life before the divorce then the divorce will be a wild ride and you might be in for some challenges. Not always the case but past performance is a good indication of the future.

You must be very careful how you inquire but focus on open ended questions that allow the bosses to talk freely. Generally, if there are issues the bosses are tight lipped and if there are not, they have no problem providing glowing reviews. It's not pass/fail but it's an data point to consider.

Dawn Jett · Answer

If all else looks good, especially if applicant was a homeowner, then I would have no problem renting to her. Previous homeowners always seem to take better care of rentals than serial tenants, IMO.

Dawn

Brian Kraft · Answer

Thanks, @Kevin Fletcher. I'd love to take a look at the verbiage you've got around that.

Kevin Fletcher · Answer

I would agree with @Bill S. that I would stick with your normal screening process, and include an early termination clause in the lease. I actually have a lease prepared by an attorney for some of my tenants with similar language if you'd like to take a look.

Brian Kraft · Answer

Thanks for the input thus far, folks. I don't ask about martial status--she just told me. My standard procedure is to get a clear financial picture and my concern is that going through a divorce can have negative financial implications.

Stephanie Dupuis · Answer

It's illegal in our state to disqualify a tenant applicant due to familial situation. Know your landlord-tenant laws. And I recommend sticking to your standard screening procedures.

BeBe Cheng · Answer

I had a tenant moved into my condo during the beginning of the divorce proceeding.  He makes very nice income, good credit and so on. But he started being late on the rent after a few months.  He is a good tenant overall.  Go ahead if the tenant is qualified. But be prepared to have some hicups. But it is part of the business. Good luck!

Logan Hicks · Answer

I would deny her.

Her documentation would be most likely from a married filing, which means her income might be mixed in with the income showing.

Additionally, her costs stand to go up substantially with the divorce attorney. Unless there is a lot of slack from her income, her divorce could cause a substantial issue with her meeting her obligations, including rent.

I would say no and go with the other, more stable tenants.

Like all major life changes, it involves risk, and risk is dangerous.

Rental Applicant Going Through Divorce a Negative?

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