Are You Tracking Rejected Rental Applicants?

by Chris on August 3, 2015

Most landlords know it’s important to keep proper documentation on tenants. A crucial element to any tenant screening policy is to also track those applicants who didn’t make the cut:

 tenant screeningAdverse Action Notices
Rejected tenants may be entitled to an adverse action notice. This notice is required when the reason for the rejection is based on consumer reports, including credit checks and other tenant screening reports.

For more information about adverse action notices, please visit our blog post When I Am Required to Send an Applicant a Rejection Notice?

Defending Against Discrimination
Another reason to track those applicants who were rejected is to defend against any subsequent allegations of discrimination. Landlords can shield themselves from frivolous claims by proving the actual reason for the rejection was legitimate, and the decision was not affected by factors such as race, gender disability and other categories covered by the Fair Housing Act, state or local statutes.

Effective Tenant Screening
Landlords should be tracking all applicants from the initial phone contact as part of an effective tenant screening process.  The information provided over the phone at the first communication is crucial. It can be compared against statements made later, and against tenant screening reports to reveal inconsistencies. This is one of the best opportunities to catch a problem applicant before they become a nightmare tenant.

Self-Evaluation
Tracking applicants can aid in a landlord’s self-evaluation. Are tenants treated uniformly? Is the landlord asking only questions that are relevant to qualifications? Do questions apply equally to all tenants? Deficiencies in the tenant screening process — such as asking different questions of different applicants or jotting down inappropriate  information on the intake sheet — not only cost in terms of bad tenants, but also in terms of liability for discrimination. Discovering those shortcomings is the first step to improving the process and minimizing income loss.

As a general rule of thumb, records should be safely stored for at least three years, but your situation may be different. Your attorney can give you specific advice regarding recordkeeping. Remember, once you obtain sensitive information on applicants or tenants, you must take reasonable steps to protect unauthorized disclosure.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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