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Choosing a renter is a big decision. You need to weigh your desire to start making money from your property against the need to keep it damage free, your neighbors safe, and your reputation as a landlord sound.
Using a well thought out process for screening your renters is the best way to accomplish these goals.
In Part 1 of this series, I shared the steps you need to take before renting your property. These included screening your applicants, using credit checks, and conducting in-person interviews. If you missed this article, you can find it here!
In Part 2, you will learn how you can legally use the information uncovered during the screening process to make a safe and sound tenant decision.
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Once you have obtained the background check, credit report, and done the interview, you have the tools you need to decide whether or not you want to rent to your applicant.
Fair housing guidelines allow for you, as a landlord, to refuse to rent to an individual. However, that denial must be based on legal reasons ~ insufficient income to pay the rent, bad credit, or a past criminal history that would make them an unsafe tenant.
How you choose to use these legal reasons for denial is up to you. For example, if your potential tenant has a criminal record, you may choose to consider how long ago the offenses occurred before making your final decision. You may even weigh their criminal past against what they have done since then to change. There is no law that dictates your decision when it comes to these issues.
However, it is important that any criteria you use to deny a renter is applied equally to all potential tenants.
That is why it is good business to determine, in advance, what findings would keep you from renting to someone. This is best done in conjunction with your screening company. They can guide you or answer any questions you may have.
Deciding beforehand the issues that would make you reject a prospective tenant is key. If your parameters are in place, you cannot be accused of preferential treatment or discriminatory renting practices.
Take Care ~ It is illegal to reject any tenant because of their race, sex, religion, or a disability. These are considered federally protected statuses.
In addition, there may be state and local discrimination laws to consider. These would also have an impact on your tenant decision.
Your background check company can both explain and help you follow these guidelines so you don’t run afoul of the FCRA (Fair Credit Reporting Agency) or the EEOC (Equal Employment Opportunity Commission). Not taking these laws into consideration can open you up to potential lawsuits.
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If, after assessing the background and credit check information, you decide to reject your applicant, then it is important you understand that they have rights.
The most important is that your applicant is entitled to an “Adverse Action Letter”. This letter must be in writing and include:
- the reason for rejection
- the name and contact information of the agency reporting the negative findings
- the applicant’s right to a free copy of the report from the agency within 60 days
This allows your applicant the opportunity to dispute or mitigate any information found in the background check and credit reports. You are then able to consider if the explanation provided changes your decision to reject this tenant.
The final decision is yours.
As a landlord, you have the right to rent your property to people who will, and can, pay their rent. You are also entitled to choose someone who will be a good neighbor and take care of your property.
Screening potential renters is the best way to accomplish this.
It will help you make an informed decision and give you the reputation as a landlord that cares about the safety and integrity of their property and of the community.
There is simply no better way to Protect Your Investment!
I have added Tenant Screening to my services! I am focused on helping you rent your property more safely and effectively ~ and always with your bottom line in mind!
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