Whatever criteria a property management company or landlord uses to choose between or reject tenants, they must be applied consistently to avoid liability.
Federal and state laws protect against discrimination, and it is wise to review a state’s requirements to avoid later legal problems. Standardized lease documents and practices can avoid many potential difficulties, although any documentation should be examined by a legal professional to ensure it does not violate government requirements.
When rejecting a tenant, it is best to do so in writing. Keep a record of the communication and any others before or after, for corroboration in case of a complaint. The credit reporting law requires that applicants be informed if they were rejected because of their credit report, and provide the name, address and phone number of the credit reporting agency.
The Fair Housing Act forbids discrimination against children, elderly or disabled residents, pregnant women or against anyone based on their race, color, national origin, sex, religion or family status. Outside of those requirements, however, landlords can deny applicants for any reasonable cause, unless state laws say otherwise.
These factors are what make standardization so important. A record of consistent reasoning and documentation can confirm that a rental manager or owner is following procedure, not making exceptions to benefit or harm specific applicants.