Just say more than “no”

How to reject a tentant's application

An essential part of property management involves screening tenants. Whether you run a 50-unit apartment building or own single-family properties, you no doubt put potential leaseholders through several checks and evaluations to ensure their worthiness as tenants.

Of course, you can’t discriminate against any applicant based on race, color, religion, sex, handicap, familial status, or national origin. Those are the seven classes protected by the Fair Housing Act, and those protections are mirrored in Article 10 of the REALTOR® Code of Ethics. But you already knew that.

However, you may not know that it would be wise for you to document why you reject a potential tenant. Simply telling a person that his application has been denied leaves the potential tenant to draw his own conclusions, which could include rejection based on discrimination.

Avoid any confusion or misunderstanding with applicants by outlining in writing your screening procedures. For example:
• Credit check
• Employment verification
• Previous rental history
• Reference check

Add this information to your tenant application after consulting with an attorney to ensure the wording and processes are legal, and apply the procedures consistently to all potential tenants. The applicant will know exactly how you will evaluate his request.

When you screen prospective tenants, keep good records of each step to serve as proof of your decision. You should always be ready to provide written documentation of why a person failed to qualify as a tenant.

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