FAQ on How to Screen and Select Renters

Methods for investigating tenants’ credit and avoiding discrimination charges and litigation.

Questions

Is it legal for landlords or property managers to get a credit report on a potential tenant?
Is it mandatory for landlords to utilize written rental applications?
What sorts of discrimination are prohibited while selecting a tenant?
What types of subtle behaviors by the landlord might constitute unlawful discrimination?
What is the most effective method for landlords to screen tenants?
Is it legal for me to refuse to rent to someone who does not have a Social Security number?
Can I refuse to rent to renters who are not lawfully present in the United States?

Is it legal for landlords or property managers to get a credit report on a potential tenant?

A landlord may acquire a credit report on a potential renter. If you are a landlord and reject an application due to unfavorable information on a credit report, you must give the applicant a “adverse action” letter in which you tell the applicant of three things:

the reason you denied the application, the name and address of the agency that provided the negative information, and the applicant’s right to receive a free copy of the report from that agency within 60 days.

You’ll need a potential tenant’s name, address, and Social Security number or Individual Taxpayer Identification Number to conduct a credit check (ITIN). A credit report may be ordered through a credit reporting firm, which will get the report from one of the three main national credit bureaus:

Is it mandatory for landlords to utilize written rental applications?

Written rental applications are not needed by law for landlords. However, requiring potential renters to fill out written applications may shield you from litigation launched by enraged applicants who were turned down as tenants.

Assume you interview six candidates before renting one of your flats. You choose Applicant #3 because you believe he is the most likely to pay the rent on time. You get a phone call two weeks later from a lawyer representing Applicant #5, who alleges she was discriminated against because she is African-American and a single mother. If you do not agree to pay $10,000 to resolve the case, you will be sued in federal court for $50,000.

Your insurance company offers paying the rejected applicant $10,000 since you have no written paperwork detailing how you chose Applicant #3. After all, the insurance company points out, choosing a white guy with no children looks awful, particularly because the African-American single mother has a high-paying job.

If you could have produced all of the applicants’ detailed written applications, credit reports, and references from past landlords, the outcome would very likely have been different. You would have had strong written data to back up your decision to choose Applicant #3—his income and work stability were considerably superior to those of Applicant #5, who had just recently begun her employment and had a bankruptcy in her history.

More information may be found at Choosing Tenants: Avoiding Fair Housing Complaints and Lawsuits.

What sorts of discrimination are prohibited while selecting a tenant?

Federal fair housing regulations make it unlawful to refuse to rent to a renter for grounds such as color, religion, ethnic origin, sex, or because the applicant has children or a handicap.

Furthermore, discrimination based on a person’s marital status, sexual orientation, or age is prohibited under several state and municipal legislation.

Landlords have the legal right to choose potential renters as long as their judgments are consistent with these regulations and are based on genuine business grounds. A landlord, for example, has the right to reject someone who has a poor credit history, inadequate money to pay the rent, or a history of negative conduct (such as destroying property) that makes the individual a risky risk. A lawful occupancy policy that limits the number of individuals per rental unit and is clearly linked to health and safety may also be used as a legal basis for denying renters.

Landlords must use the same selection criteria to all renters, such as demanding a minimum income and an acceptable credit record.

What types of subtle behaviors by the landlord can be regarded criminal discrimination?

The Fair Housing Acts prevent landlords from discriminating against tenants based on their race, religion, or any other protected characteristic:

Falsely denying that a rental unit is available to some applicants advertising that indicates a preference based on group characteristic, such as skin color setting more restrictive standards, such as higher income, for certain tenants refusing to reasonably accommodate the needs of disabled tenants, such as by allowing a guide dog, hearing dog, or other service animal

What is the most effective method for landlords to screen tenants?

All potential renters should fill out a formal rental application that contains the following information, according to savvy landlords:

employment, earnings, and credit record
Social Security number (or Individual Taxpayer Identification Number) and driver’s license numbers, as well as references, are required.

You should check with past landlords and other references before selecting renters; verify income, job, and bank account information; and acquire a credit report. The credit report is very essential since it will show whether a person has a history of late rent or payments, has declared bankruptcy, or has ever been evicted.

To prevent problems with fair housing regulations, make sure your screening is consistent and fair. Make it a policy, for example, to request credit reports from all candidates. More information may be found under Choosing Tenants: Stay away from Fair Housing Complaints and Lawsuits.

Is it legal for me to refuse to rent to someone who does not have a Social Security number?

There are several compelling reasons why landlords normally require all potential renters to furnish their Social Security number (SSN). To get an applicant’s credit report, you may need their Social Security number or other identifying information, such as a passport.

But what if you come across an application who does not have an SSN (since only citizens or legal immigrants permitted to work in the United States may get one)? A student visa holder, for example, will not necessarily have an SSN. If you flatly refuse to rent to applicants who do not have SSNs, and these applicants happen to be international students, you are inviting a fair housing complaint.

People who are legitimately in the United States but do not want to remain permanently, as well as those who are here illegally, may get an additional piece of identification that will serve your purposes just as well as an SSN. The IRS issues Individual Taxpayer Identification Numbers (ITINs) to those who intend to owe taxes.

Most persons who have been in the United States long enough to apply for an apartment will be earning money and therefore have an ITIN. An ITIN may be used by consumer reporting agencies and tenant screening firms to discover the information they need to successfully screen an application.

However, keep in mind that an ITIN is not evidence of legal status in the United States. Before issuing the number, the IRS does not inquire about the taxpayer’s immigration status.

If you’re worried about unlawful housing discrimination, make sure you’re aware of subtle activities that might be considered illegal discrimination, such as imposing more stringent rules on particular renters.

Can I refuse to rent to renters who are not lawfully present in the United States?

While it is illegal to discriminate against a tenant based on national origin, landlords in most states are permitted to request proof of identity and eligibility to work under US immigration laws, such as a passport or naturalization certificate, using Form I-9 (Employment Eligibility Verification) issued by US Citizenship and Immigration Services (USCIS). This form, as well as directions for completing it, may be found on the USCIS website.

While asking applicants to provide documentation of their citizenship status during the screening process and rejecting those who cannot do so does not violate the federal Fair Housing Act, you may not ask for immigration information selectively—that is, you must ask it of all prospective tenants, not just those you suspect of being in the country illegally.

And, as with other parts of landlord-tenant legislation, there are exceptions: New York City and California, for example, restrict landlords from inquiring about a potential tenant’s immigration status or citizenship.

Keep in mind that certain persons with legal status in the United States, such as students, asylum seekers, and other temporary visa holders, may not have the right to work, which is the subject of the I-9.