When are denial letters required?

[Alex S]

Hi Everyone
I'm new to BP so I hope it's ok to jump in and ask a related question here. I own 3 rental townhomes and my primary residence. I recently received an application with no fee via fax. If there are no reasons to decline based on the info indicated and a google search on the applicants I would request the fee for the background and credit check, and then order the report. I do it this way to help save the fee for the prospective tenant.
It turns out that one applicant has a prior eviction and the co-applicant has prior judgments( I found this info via google) There were also blanks on the application and some inconsistencies on the info received.
I advised one applicant on the phone that I was unable to move forward with his application. He said he understands. But I received a call from the co-applicant later that afternoon demanding a denial letter in writing. (Along with my policies)
Am I required to issue a denial letter in writing under the fair housing rules or fair credit rules? I was planning to make record of reason in my file just keep all of the support in case it is ever needed. Does it matter if i did not receive an application fee? Your thoughts and suggestions are greatly appreciated.
Thank you in advance.
Alex