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Sometimes it will happen that you make a decision WRT an applicant to an apartment that they don't agree with. Then they will scream "discrimination."
This just happened to me (again). The way your protect yourself is to maintain a written plan setting forth in detail your screening and rental criteria, then stick to the plan. So long as your plan doesn't contain within it any unlawful discrimination criteria (age, family status, race, religion, or handicap) then you are protected.
Here is the plan I use. Please understand that this does not constitute legal advice and you should not assume that my plan would work for you. But this will get you started.
RENTAL APPLICATION SCREENING GUIDLINES
I. GOALS
We seek tenants who will satisfy the following requirements:
1. They will pay their rent on time.
2. They will take reasonably good care of the property.
3. They will be good neighbors.
All three requirements are given equal weight in the screening procedure, and an applicant will be rejected if we uncover evidence that the applicant might not satisfy any of the requirements.
II. APPLICATION REQUIREMENTS
All applicants must completely and truthfully fill out our Rental Application, and the non refundable application fee must be paid at time of application. Incomplete applications will not be accepted. At time of application, the manager will:
1. Review the application for completeness;
2. Will verify that the applicant's household income is sufficient
to meet our guidelines;
3. Will verify the identity of all applicants age 18 or older.
Should the manager uncover from the application prima facie grounds for rejection, the manager shall return the application to the applicant and will not accept the application fee.
III. SCREENING PROCEDURE
Screening proceeds until grounds for rejection is uncovered. When grounds for rejection is found, the applicant is rejected and screening stops. If screening is completed and no grounds for rejection is uncovered, the applicant will be accepted and offered a lease.
Screening proceeds in the following order:
1. Identification Verification - the applicant's identity and social
security number is verified by inspection of picture identification
(driver's license, State ID card, Military ID, or similar document)
2. Credit Check - the applicant's credit file is accessed and
reviewed.
3. Public Records Search - Police and court records are searched for
information on all applicants age 18 or older.
4. Employment Verification - Employers are contacted and
employment/income is verified.
5. Landlord verification - the current landlord and all past landlords
for at least the previous three years are contacted. Those
landlords will be asked about:
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a. Payment History. Has tenant paid on time. How
many times late. What is current rent.
b. Condition of unit occupied by tenant. Has tenant maintained
the unit in satisfactory repair and in sanitary condition.
c. Disturbances. Have there been complaints from neighbors.
Have the police been called to the unit due to
disturbances or fighting.
d. Period of Tenancy. Has the tenant occupied the unit for
the time period specified on the application.
e. Lease Status. Does the tenant have a lease. If yes, does
the tenant have permission from the landlord to move.
Has the tenant given notice of intent to move.
f. Does the tenant owe any money to the landlord at this time.
g. Would the landlord rent to the tenant again.
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IV. REJECTION CRITERIA
1. Categorical Rejection Criteria
All applicants for an apartment who intend to live together in that apartment shall be rejected if any applicant for that apartment has:
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a. Made incorrect or inaccurate statements on application. Any
statement made by applicant on the application that can be
proven false is immediate grounds for rejection.
b. Any eviction by any landlord for any reason in the previous
five years.
c. Any unsatisfied judgement from any landlord at any time for
any reason.
d. Any unsatisfied collection from any landlord at any time for
any reason.
e. Any convictions for a felony involving violence ever.
f. Evidence of current drug abuse.
g. Unsatisfactory payment history with current landlord.
h. Money currently owed to current landlord.
i. Unsatisfactory sanitary or maintenance record with any
current or previous landlord.
j. Evidence of disruptive behavior, fighting, or grossly and
habitually inconsiderate behavior at current or previous
addresses (bad neighbor).
k. Any unreported addresses within last three years, or within
timeframe reported on application.
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2. Potential Rejection Criteria
All applicants for an apartment who intend to live together in that apartment may be rejected if any of the following apply:
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a. Monthly Household gross income less than three times the
monthly rent.
b. Any eviction of any applicant by any landlord at any time.
c. Any judgement or collection against any applicant by any
landlord at any time.
d. Evidence that applicant will be unable to place electric and
or gas utility in their name.
e. Evidence that any applicant has failed to adhere to lease
requirements at any previous address.
f. Judgements, collections, or garnishments other than from
landlords against any applicant.
g. Credit account information containing charged off or
collection accounts for any applicant.
h. Current bankruptcy of any applicant
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V. ACCEPTANCE/LEASE CRITERIA
Applicants shall be rated as Desirable, Acceptable, Unknown Quantity, or Unacceptable.
1. Desirable Applicant.
Applicants whose history includes no negative information as set forth in Section IV above, and who in addition have a good credit history and a good previous landlord history which is at least two years in duration is a Desirable Applicant. Such an applicant shall be offered a lease under the following terms:
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a. One year lease (or shorter by previous agreement)
b. Payment of ordinary advertised deposit and first months rent
at time of lease signing, using personal check, cash, or money
order.
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2. Acceptable Applicant.
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a. An applicant is acceptable if:
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1. Negative information as set forth in section IV 2 above
is found on any applicant, but in the opinion of
Management the information is not sufficiently negative
to warrant rejection.
2. Negative economic (credit or employment) information
on any co-applicant is found that is sufficient to warrant
rejection, but another co-applicant is found to be
acceptable and that co-applicant has sufficient income on
his/her own to support the rent.
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b. Acceptable applicants shall be offered a lease under the
following terms:
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1. One year lease (or shorter by previous agreement). If
Section V2a2 applies, the lease shall be solely
in the name of the co-applicant who is found
to be acceptable.
2. Payment of ordinary advertised deposit and first months
rent at time of lease signing, using money order or cash.
3. At discretion of management depending upon particular
circumstances, an applicant may be deemed acceptable
only if they agree to either;
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a. Provide a cosigner who is a member of the
immediate family, a homeowner, and with good
credit, or;
b. Pay last month's rent in addition to first month
rent and deposit at time of lease signing,
and/or pay an additional deposit at time of
lease signing.
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3. Unknown Quantity.
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a. An applicant is an unknown quantity if any of the following
apply:
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1. Any co-applicant has no verifiable previous rental or
credit history, or a rental history where the only
landlords are family members, and another co-applicant
does not have sufficient income on his/her
own to support the rent.
2. Any co-applicant does not satisfy the requirements for
a desirable applicant as set forth in section V.1 above,
and co-applicants wishing to share an apartment do not
have a joint rental history of at least one year.
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b. Applicants who are unknown quantities shall be offered a
lease only under the following terms:
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1. One year lease (or shorter by previous agreement).
2. Applicant shall choose one of the following options:
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a. Payment of first month rent, last month rent, and
deposit at time of lease signing or;
b. Provide a cosigner who is a member of an
applicant's immediate family, a homeowner, with
good credit and sufficient income to
support the apartment.
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4. Unacceptable Applicant
An Unacceptable Applicant is any applicant that is rejected in accordance with the standards set forth in Section IV above. No Unacceptable Applicant shall be permitted to live in any of our properties at any time for any reason.
VI. RENTAL SPECIALS
From time to time, Management may offer move-in specials at various locations. Such specials may be offered without prior notice and may be terminated without notice. Specials are provided solely at Management discretion and are offered to applicants on a case by case basis. The ordinary criterion for offering a special is a determination by Management that an applicant is a Desirable Resident, as defined in Section V.1
VII. MANAGEMENT DISCRETION
Management reserves the right to consider special or extraordinary circumstances pertaining to any applicant when reviewing any application. Said circumstances may work either to applicant's benefit or detriment.
About the Author: Jim Locker is a technical guy who has done a lot of real estate investing and landlording. The experiences he writes about and advice he gives are either first hand, or in answer to specific questions posed by others. He is commonly known as jiml8 around the internet.
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