Q. What are the legal reasons I can approve or deny a tenant’s application?
A. As a landlord, there are certain factors that you are legally permitted to consider to accept or reject a potential tenant. Permissible factors to use in deciding whether to rent to a tenant are the tenant’s credit standing and credit score, their employment history, the amount of their monthly income, their rental history and past bad conduct which could be an indicator of a potential future threat to the health or safety of your current tenants or neighbors.
Q. I’ve heard that it is ok to refuse to rent to a tenant based on amount of income but not the source of their income? What is the difference?
A. If you choose not to rent to someone because of the amount of income, it typically means that you do not think they make enough money to afford the monthly rental amount that you charge. This is permissible. What is impermissible is to say that you will not rent to a tenant because of their line of work, even if they make enough money to afford their monthly rental payments. In other words, you cannot discriminate against a tenant because you do not agree with their occupation or how they are able to afford your rent.
Q. I have two potential tenants that would like to rent my apartment, they seem like nice people, do I really need to check their references listed on the application?
A. Yes, you should always contact all persons named as references, including former landlords, employers, friends and family. The landlord should use these references to verify information on the rental application. In addition to calling the tenant’s references, you should also consider asking for their past pay stubs, 1099s, or any state benefit or legal award letters which may indicate alternative amounts of income (such as disability benefits, unemployment or a lawsuit settlement pay out). To verify that they are who they state they are ask for a copy of their personal ID, driver’s license, passport, or green card. If you do not feel comfortable calling the past landlord you could write the prior landlord a letter or email to verify past rental information. The most critical factor of deciding to accept an applicant is to run a credit check.
Q. How do I know if the tenant has a good credit score versus a bad credit score?
A. The highest possible credit score someone can have under the FICO system is 850. If the tenant has a score between 720 and 850 that is considered to be excellent credit. If the tenant has a score between 719 and 600 that is still considered good credit, and any score between 599-300 is considered high-risk. You should be very cautious of renting to someone with a score below 599. If you would like to rent to an applicant with a low credit score, then it is preferable to have a person with good credit as a co-signer with the applicant.
Q. What if the tenant already had their credit report run recently and they are willing to provide that to me so I do not have to run their credit, and so they can save the cost?
A. You should always run a potential tenant’s credit and pull your own report. There is a chance that a tenant that offers you a report may have altered their scores. Additionally, the information in the report may not be current or accurate. It is advised to always run your own credit checks and have each applicant’s credit run by the same trusted credit company. This will make it easier for the landlord to compare applicant’s credit scores.
Q. I have a potential applicant who has proven they he has good income, but I found out he had been previously charged with a misdemeanor. I don’t want criminals in my units. Can I deny him based on his criminal past?
A. No, the Fair Housing Laws prevent you from discriminating against people who have been previously arrested or charged with misdemeanors. You must take into account the severity of the individual’s crime and length of time since conviction. You must ask yourself if this particular crime or arrest is going to affect the safety and enjoyment of the surrounding tenants. For example, an applicant who has been convicted of manufacturing or trafficking drugs is exempt from the Fair Housing Laws. To avoid discrimination towards a particular group or person, the landlord should not ban all persons convicted of a crime.
Attorney Franco Simone, of the Landlords Legal Center and has been doing evictions for 20 years. He is also an adjunct law professor at the University of San Diego. Mr. Simone’s office is open Monday- Friday from 9:00 AM to 5:00 PM .- Tel: 619-235-6180, website: www.landlordslegalcenter.com or email [email protected]