Denying Tenant Applications

[Erik Gardea]

Im really new to the landlording game, and im trying to get clear information on how to properly and legally deny a tenant application. I am aware that in my state, Minnesota, If the landlord accepts a screening fee they are required to inform the applicant that the landlord will be denying their application and why. However, its not clear on HOW I should inform them..Via mail, via email? Im wanting to use the email route, but is this even legal or the right move?

Everything so far has been done through email, the pre-screening, scheduling showings of the property, as well as the application (im using RentPrep) 

Another thing, with using RentPrep I had the option to have the applicants pay the fee themselves to run the screening (I used this option with all applicants) Im wondering If this still qualifies as the ''landlord'' accepting a screening fee, if not, would I still need to send a denial to the applicants? 

[Tim Swierczek]

@Erik Gardea There are a few things you need to know and based on your question I suspect you are not aware of your responsiblities.   The first is that you must present the criteria you will use to accept or deny an applicant in writing before you accept a fee to screen a tenant.  When rejecting for a reason not listed in your criteria you must return the fee.  The law requires you to notify the tenant within 14 days but waiting that long is inconsiderate and will possibly  anger them to the point they look to bring action against you.  There is no legal requirement to notify them in writing but its a good idea in many ways.  

Since you have  a history of emailing them there is no reason you cannot send and email, just be sure to keep it short & professional, save a copy, and be sure to let them know you will be refunding them the cost of the fee (yes, I know you didn't get the fee but you still must return it by law unless you did give them a written criteria prior to applying and the reason for denial was on the critieria.)

I would recommend you come up with a written criteria ASAP.  I would recommend you come up with criteria for the following areas at a minium:

Rental History

Criminal History

Credit History

Income Requirement

Pet Policy

Smoking Policy

If you want to meet up and discuss your policy further please PM me.

Here is the state statue that covers what you are asking

https://www.revisor.mn.gov/statutes/cite/504B.173

504B.173 APPLICANT SCREENING FEE.

Subdivision 1.Limitations.

A landlord may not:

(1) charge an applicant a screening fee when the landlord knows or should have known that no rental unit is available at that time or will be available within a reasonable future time;

(2) collect or hold an applicant screening fee without giving the applicant a written receipt for the fee, which may be incorporated into the application form, upon request of the applicant; or

(3) use, cash, or deposit an applicant screening fee until all prior applicants have either been screened and rejected, or offered the unit and declined to enter into a rental agreement.

Subd. 2.Return of applicant screening fee.

(a) The landlord must return the applicant screening fee if:

(1) the applicant is rejected for any reason not listed in the disclosure required under subdivision 3; or

(2) a prior applicant is offered the unit and agrees to enter into a rental agreement.

(b) If the landlord does not perform a personal reference check or does not obtain a consumer credit report or tenant screening report, the landlord must return any amount of the applicant screening fee that is not used for those purposes.

(c) The applicant screening fee may be returned by mail, may be destroyed upon the applicant's request if paid by check, or may be made available for the applicant to retrieve.

Subd. 3.Disclosures to applicant.

If a landlord accepts an applicant screening fee from a prospective tenant, the landlord must:

(1) disclose in writing prior to accepting the applicant screening fee:

(i) the name, address, and telephone number of the tenant screening service the landlord will use, unless the landlord does not use a tenant screening service; and

(ii) the criteria on which the decision to rent to the prospective tenant will be based; and

(2) notify the applicant within 14 days of rejecting a rental application, identifying the criteria the applicant failed to meet.

Subd. 4.Remedies.

(a) In addition to any other remedies, a landlord who violates this section is liable to the applicant for the applicant screening fee plus a civil penalty of up to $100, civil court filing costs, and reasonable attorney fees incurred to enforce this remedy.

(b) A prospective tenant who provides materially false information on the application or omits material information requested is liable to the landlord for damages, plus a civil penalty of up to $500, civil court filing costs, and reasonable attorney fees.