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, drug 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.
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
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.
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 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.
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
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
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
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
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
Laws change constantly, and what you don't know can and will hurt you.
Excerpted from "Profitable Tenant Selection" by Robert Cain at www.RentalProp.com
. Available from Cain Publications, see the order
form at www.RentalProp.com