Can I Rescind An Offer To Rent?

[Michael Pilolla]

I knew that one of the 3 applicants was a smoker. I told the family via email that the property was NON-smoking and that there was to be no smoking on the property inside or outside - leaving them to smoke out in the street. They asked if they could have a designated smoking spot that wasn't out in the street. I don't trust they'll follow the rules. Can I tell them we're no longer offering the property to them to rent and refund the application fees? I don't want to get sued for discrimination of some sort. This is in Oregon btw.

Thank you for your answers in advance!

Michael