You do not want to be the named defendant in a lawsuit featuring a poor old defrauded couple as the plaintiffs.  

Not the best analogy, but hopefully you get the idea...Again, I'm not defending said tennant.  

This is the easiest way to defend yourself against a complaint of discrimination.And, then having written criteria.  

Sometimes tenants lie when they hear about a changeover and said they made payments when they didn't etc.It's easy for them to throw the person that is gone under the bus because they are no longer there to defend themselves.Not saying that is the case here at all but tenants try to manipulate anytime they see an opening. 

I reject anyone I do not want for any reason I choose and am always able to defend my decision but surprisingly have never had to.

Neighbour As dog provoked the fight, neighbours Bs dog was only defending itself and neighbour A got in the way. 

@Sean Chen By the way if your neighbor tries to sue you there may be a clause in your landlord's policy that your insurance company will provide an attorney to defend you.

Without knowing what the monthly rent is, the $500 fee plus the 2 months sounds a little excessive and would probably be difficult to defend in court, and collect if they just walked without paying.

BTW:  As I understand, Small Claims only the principles can appear (aka plaintiff and defendant), and may not have representation. 

You will learn a lot and hopefully never return as a plaintiff nor defendant.