18 Reasons To Legally Reject A Tenant's Application

Real Estate Agent with Kennewick Richland (and West) Pasco WA Homes For Sale

Many landlords believe that they cannot reject any applicant for any reason, that they have to accept the first one to come along with the money or risk the grief of a lawsuit. Not so. There are numerous legitimate, businesslike reasons to reject a prospective tenant.

1. Unsatisfactory references from landlords, employers and/or personal references. These could include reports of repeated disturbance of their neighbors' peaceful enjoyment of their homes; reports of gambling, prostitution, Applicant Rejectiondrug dealing or drug manufacturing; damage to the property beyond normal wear and tear; reports of violence or threats to landlords or neighbors; allowing people not listed on the lease or rental agreement to live in the property; failure to give proper notice when vacating the property; or a landlord who would not rent to them again.

2. Evictions.

3. Frequent moves. You have to decide what constitutes frequent moves and apply the same criteria to every applicant.

4. Bad credit report. If a report shows they are not current with any bill, have been turned over to a collection agency, have been sued for a debt, or have a judgment for a debt, that is grounds to reject. These do not have to be debts connected in any way with housing.

5. Too short a time on the job. As with frequent moves, you have to decide what too short a time is and apply the same criteria to every applicant.

6. Too new to the area. There is nothing to say you have to rent to people who have just moved to town. Be careful, though, many times these would be excellent tenants and the time and long distance call expense of checking them out could pay big dividends.

7. Smokers.Some newspapers mistakenly believe that smokers are a protected "handicapped" class. They will never be. The tobacco companies would not allow it. Do do so would be to admit that tobacco and nicotine are addicting. Industry lobbyists would be sure to fight that idea tooth and nail. So you can safely discriminate against people who smoke. Newspapers will not accept ads that say "no smokers," but they will accept ads that say "no smoking."

8. No verifiable source of income.

9. Too many vehicles. Lots of cars can be a real source of irritation to neighbors and make the entire neighborhood or apartment complex look bad. Chances are, if they have more than one vehicle for every adult they spend a lot of time broken and being fixed. That means they could be in pieces in the front yard or parking lot.

10. Too many people for the property. Be extremely careful with this. Before the familial status protection clause of the Fair Housing Act, you could discriminate on this basis without fear of any problems. Not any more. Now the same criteria must be applied without regard to the age of the inhabitant. Be sure it is applied equally to all applicants. Check your state's Landlord-Tenant Law.

11. Drug users. They must be current drug users. If they are in a drug treatment program and no longer use drugs, the Federal Government considers them handicapped and protected by the Fair Housing Act.

12. Pets.

13. Any evidence of illegal activity. You must be able to come up with some kind of satisfactory evidence. I don't know what that would be, every case would be different. Certainly a letter from the police department warning a previous landlord of their illegal activity and threatening to close the property is considered sufficient evidence.

14. History of late rental payments.

15. Insufficient income. You must set up objective criteria applied equally to each applicant. Insufficient income could reasonably be if the scheduled rent exceeded 35% of their gross monthly income.

For example, if the rent is $600, their gross monthly income must be at least $1714.29. The formula is:

Acceptable income= scheduled rent                                     income ratio

You can require proof of all income. Be careful, though, if you are willing to accept only one member of a married couple to supply the total dollar income, you must be willing to accept the same of unmarried, co-tenants that share the housing. Under Fair Housing law you cannot require that unmarried people meet different income requirements than married people.

16. Too many debts. Even if their gross income is sufficient, they may have so many other debts that they would be hard pressed to make all the payments. A rule of thumb might be that all contracted debts, including rent, cannot exceed 50% of their gross income. Contracted debts would be such things as credit card payments, car payments, loans, etc. Those would not be cable TV, water and garbage, telephone, or other utilities.

17. Conviction of a crime which was a threat to property in the past five years. Included in this could be drunk driving convictions, burglary convictions, robbery convictions, and other such misbehaviors.

18. Conviction for the manufacture or distribution of a controlled substance in the past five years.

The best way to proceed is to post a list of the acceptable rental criteria and hand it to each applicant. You can use the list above, but under no circumstances is it intended to be legal advice. Check with an attorney who is familiar with the Landlord-Tenant Law before posting or handing out anything like a list of acceptable criteria for applicants.

Laws change constantly, and what you don't know can and will hurt you.

Copyright Cain Publications, Inc., used by permission. Robert Cain is a nationally-recognized speaker and writer on property management and real estate issues. For a free sample copy of the Rental Property Reporter call 800-654-5456 or visit their web site at www.rentalprop.com

Handsome Bald DudeI be Joe Lane, the co-owner of The Lane Real Estate Team.
The other owner, my beloved wife Colleen, wants nothing to do with the property management side of the real estate business. With five children still at home, I don't blame her. You can call me most anytime at 509.308.5513
Don't mess with a bald dude!


Re-Blogged 2 times:

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  1. Erica Ramus 12/03/2008 06:16 AM
  2. Charles Stallions Property Manager 01/13/2013 06:43 AM
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Gayle Balaban
The Best Spot Realty/Waterfront Real Estate/Ooltewah Real E - Chattanooga, TN
E. TN Waterfront Real Estate

This post is very helpful.  I have been contemplating renting n apt. in my house and dreaded having to find reasons to reject people that I was uncomfortable with.

Oct 26, 2008 08:19 AM #1
Vickie Nagy
Palm Springs, CA
This is a GREAT list. Thanks for the reat details covering this sensitive subject.
Oct 26, 2008 08:24 AM #2
Greg Peterson
Favor Real Estate - Moore, OK
Broker/Property Manager Oklahoma City Metro Area

Thanks for spelling these out.  I've been using a very direct methd with tenants -- I tell them the standards and wait for any excuses.  I still amazes me how many folks will either not comment or act hugely surprised when things come up that I've told them are grounds for rejection.  I had one yesterday that I told "...prior eviction or collections from a utility company..."  Guess what?  They had both on their report!

Oct 26, 2008 08:34 AM #3
Jim & Maria Hart
Brand Name Real Estate - Charleston, SC
Charleston, SC Real Estate

Quite a list you have there.  And all very good reasons not to accept a tenant!

Oct 26, 2008 09:07 AM #4
Robert Machado
HomePointe Property Management, CRMC - Sacramento, CA
CPM MPM - Property Manager and Property Management

I would be careful of using Frequent Moves as a reason to turn someone down.  That in itself does not make a bad tenant.  There are lots of valid reasons for someone moving.  That one might be best left off the list.

Too many vehicles may be another problem area.  The tenant might park their cars elsewhere or there might be plenty of street parking, which is not the landlords issue to deal with.  The tenant just needs a history of following the rules for past residences.

Your list is mostly good,  thanks for providing it.

Oct 26, 2008 10:10 AM #5
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd. - Windsor, ON

Hi Joe, Wonderful post. Thanks for sharing this with us. Keep posting best.

Best - Sash

Oct 27, 2008 01:11 AM #6
Josh Holt
RE/MAX Coast To Coast~ Dedicated to You! - Berwick, ME
Southern Maine and NH Real Estate - Your Source of Info on the Berwicks

AWESOME info Joe. Thanks for posting, I'm going to share this with some friends. Thanks again.

Nov 29, 2008 07:41 AM #7
Frank Torre
Torre Inspection Service, LLC 888-202-8869 - Hicksville, NY

Hi Joe, thank you for all the great info it is appreciated.

Dec 03, 2008 01:27 PM #8
Golden Estate Management
Golden Estate Property Management - Los Angeles, CA

Thank you, those were some very helpful tips. I wouldn't mind refering back to these time to time. Have a great day!

Dec 04, 2008 04:17 AM #9
Bernadine Hunter, SFR, ACRE
Keller Williams Greater Columbus Realty - Pickerington, OH
"Finding Solution to Your Real Estate Needs"

Very good list. Some of these I wasn't even aware of. Thanks for the refresher.

Jan 13, 2013 08:25 AM #10
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA

I'm not sure frequency of moves and new to the area would fly in my area - most of my new rental prospects are moving into the area for new jobs

Jan 13, 2013 06:37 PM #11
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

This is a sensitive subject that is relevant in 2013.  In Dallas, many home owners are leasing their properties and seeking well qualified clients.

Apr 16, 2013 03:51 PM #12
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Joe Lane Richland

WA Realtor, 509.438.9344 www.LaneRealEstateTeam.com
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