We have a situation where 1 out of 3 tenants (who are good, pay on time, keep place clean) in our rental is moving out of the area. We told the remaining 2x they could find a suitable tenant if we go through references/credit check/etc. and approve them first (also in our original contract). The tenant they proposed definitely did not check out (was moving from another city, first filled out application with no current listed job or income, only 5 months of rental history and nothing before that). So right off the bat it seemed suspicious.

We ask her to fill out the form again, this time with complete rental history, current job or source of income. She sends the form back again without listing income amount again, but with an email saying that she forgot to mention she's on student financial aid and that she can have a cosigner. The prior house that she left off on first application didn't make sense either as the landlord was listed as living at it and it was a one-bedroom house, among other things. We call to get clarity and ask for the financial aid income amount *again* and she didn't give a straight answer -- said she didn't really know and would need to look it up. We told her to find out, fill out the application form properly with that information and that we'd send the credit/background check link (tenantbackgroundsearch.com, so we're not dealing with the money) that evening.

Needless to say, we never got an updated application form with income amount. Instead, they only filled out part of the information from tenantbackgroundsearch.com -- saying "they didn't feel comfortable filling out the banking section" and just wanted to provide printouts. Also added that they "were very busy" which is why they hadn't responded with updated form. Needless to say, printouts can be faked which is why we use third party verification.

It also turned out her cosigner had an eviction within the last 10 years, almost 20x open credit cards with 85% limit used up, and a recent bankruptcy that was "settled" in court (so the report says that the bankruptcy section was clean, but it did note the court case that was settled). Their credit was barely over 650.

Since we're obviously going to deny her application to be added on the lease, my questions are these:

1) Adverse action letter: What to list for disqualification on letter -- just credit stuff or list all reasons? (slow to respond with information, incomplete application, insufficient income requirements, cosigner didn't meet requirements?)
2) Since part of the reason she's being disqualified is her cosigner has a recent eviction, large # of credit cards, and bankruptcy (settled) -- would we send the adverse action letter to her, or her cosigner, or both? (father). Are you allowed to send the credit info or things like eviction records that came up to the cosigner to that applicant, or only directly to their cosigner?
3) Is a "settled" bankruptcy allowable as a reason to not approve someone, or just don't list it? We already have a policy in original ad of no evictions, but curious how you'd handle settled bankruptcies, since it obviously means they did not handle financials correct and still paid their debtors less than they owed.

San Diego, California

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