As you find and screen tenants, you’re constantly learning new information about prospective renters. But as you go through applications, you might also be worried about whether or not you have a valid reason to deny one of them.
Under the Fair Housing Act, there are a handful of laws protecting tenants from discrimination and bring unfairly rejected for certain reasons, including familial status, sex and gender, disability, religion, color, race, and national origin. You cannot reject a potential tenant based on any of these protected classes.
That said, there are still some cases in which you can decide not to rent to someone. Here are 15 legal reasons to deny a tenant.
1. The Tenant Doesn’t Make Enough Income
It’s important for your tenant to be able to pay rent each month, so if you discover that a prospective tenant does not have enough income to cover the rent, then you have a valid reason to deny that tenant.
The typical rule of thumb is that the tenant’s income should be three times the price of rent. We recommend you review all of the tenant’s information in their credit report or ask for proof of other savings or financial backing before making a decision.
2. The Tenant Smokes
You can ask a tenant if they smoke during your initial conversation, during the property showing, or on your rental application. The sooner you find out, the better, so you can move forward with tenants who are a good fit for your property.
Smoking is important to consider because smoke can create a lot of problems. It’s a health hazard (and bother) to other tenants, it’s a fire hazard, and it can cause interior odor problems that are hard to get rid of. If you don’t want a tenant who smokes in your property, you are legally allowed to deny them for this reason.
3. The Tenant Has a Pet
If you don’t allow pets in your rental property, then you can deny a tenant who wants to rent with a pet.
It’s common for landlords to have rules about pets. For instance, some landlords only allow pets that are a certain type, size, or certain breed. Some landlords allow pets but also charge pet rent or a pet deposit on top of the rent. Whatever rule you choose, you are allowed to deny a tenant if they don’t match your pet requirements.
One exception to this rule is in the case of service animals. State laws differ on whether or not you can deny a tenant because of their service animal. In some states, you’re allowed to deny a tenant with a service animal based on breed. Other states require that you allow service animals for tenants with physical and mental disabilities, but don’t require you to accept tenants if they have an emotional support animal. You can also require the tenant to provide a letter from his or her doctor explaining the necessity.
4. The Tenant’s Income Isn’t Verified
If your tenant won’t disclose his or her income and won’t provide employer references or proof of employment, then you have the right to deny that tenant.
At Avail, we make it easy for tenants to verify income. Our online rental application allows tenants to upload a W-2, offer letter, or a pay stub. We also make it easy for tenants to enter employer history so you can easily verify that they are employed and have a certain income.
5. The Tenant Has Been Convicted of a Crime
This one is a little trickier. First, you can never deny a tenant based on an arrest record, because innocent people can be arrested. You can, however, deny a tenant for a criminal conviction — in some cases.
As a landlord, you cannot refuse to rent to a tenant just because they have a criminal record, but you can have standardized policies in place to refuse tenants with certain convictions that would put your property or other tenants at risk.
Note that some cities do not allow you to pull a background check during the screening process or reject a tenant due to criminal history, so be sure to check your local laws first.
To make sure you’re not violating guidelines around screening based on a criminal record, learn about how to analyze tenant background checks.
6. The Tenant Does Not Have Rental History
You are technically allowed to deny a tenant for not having prior rental history. If a tenant hasn’t rented in the past, it’s possible they were living in a dormitory, at a parent’s house, or owned a home.
As long as the individual has sufficient income (or a co-signer), then it’s usually safe to rent to them. You don’t need to deny a tenant for not having rental history, but do make sure everything else checks out.
7. The Tenant Has a History of Damaging Property and Not Paying Rent
When you contact a tenant’s prior landlords, you should ask them if the tenant was a responsible renter. If the landlord says the tenant skipped rent payments or left the property in bad condition, you can legally deny that tenant. You don’t want to rent to someone who might not pay or will cause hundreds of dollars in damage.
8. The Tenant Provides False Information
If a prospective tenant lies during the tenant screening process, then you can (and should) deny them. The most common reasons tenants lie is usually regarding how much money they make, providing a fake reference, or falsely answering questions on your rental application. You can spot false information by thoroughly following a standardized tenant screening process for every tenant.
9. The Tenant Does Not Fill Out the Rental Application Completely
If the tenant leaves part of the rental application blank, then they could be trying to hide something. It’s possible it was a mistake, so you should reach out to your applicant and ask them to fully complete the application. But if the tenant is purposely not providing information you’re looking for, then you have grounds to reject them.
10. The Tenant Does Not Authorize a Tenant Credit Report and Background Check
If you have a thorough screening process in place, then you are usually requiring a tenant credit report and background check. If your tenant doesn’t authorize the credit report and background check, then you can reject them as an applicant. Note that some cities have banned criminal background checks in the screening process, so check your local laws first.
Remember, it’s important to stay consistent in your screening practices so that you are treating every applicant the same. This is important because you don’t want to be accused of treating prospective tenants differently or unfairly, thereby violating Fair Housing laws. Consistent requirements are an easy way to remain fair and stay out of legal trouble.
11. The Tenant Has a Low Credit Score
If you look over a tenant’s credit report and see the tenant has a low credit score, then you have grounds to reject that tenant. The credit score indicates a tenant’s financial responsibility, and a low credit score can indicate that a tenant isn’t making payments on time, has significant debt, or has a history of foreclosure or bankruptcy.
That said, a credit score doesn’t paint the entire picture of a tenant and how responsible they’ll be as a renter. There are plenty of reasons a prospective tenant might have a low credit score, and it can be worth asking for additional proof of financial responsibility before you move on.
12. The Tenant Has Filed for Bankruptcy in the Past
Filing for bankruptcy typically indicates that the tenant is not financially responsible. We recommend asking your tenant to explain the situation that led to bankruptcy. Sometimes tenants can explain their prior financial troubles, and if they have other indicators that positively show they’ll be able to pay rent, then you can make your best judgment call.
13. The Tenant’s Reference Gave a Negative Review
It’s smart to reach out to a handful of tenant references to get the full picture. Landlords who use Avail are provided with multiple landlord references for a prospective tenant — we email the tenant’s prior landlords and ask the important questions so you don’t have to.
14. The Tenant Has a Prior Eviction
On your rental application, you should ask tenants if they were ever evicted in the past. Many landlords won’t rent to a tenant who has been evicted, but keep circumstances in mind (i.e., a global pandemic). In some cases, it’s reasonable to ask the tenant for more detail around their eviction before you make a decision.
15. The Tenant Does Not Agree to Your Rental Terms
If the tenant doesn’t agree with the rent price, move-in date, length of tenancy, or other rental rules in the lease, then you can legally reject them. You can be flexible with a tenant if you want to, but if you’re not willing to alter your rental terms, you can deny that tenant.
Invalid Reasons to Reject Tenants
You cannot reject a tenant based on discrimination. According to Fair Housing laws, housing discrimination occurs if you reject a tenant based on their protected class:
- National origin
- Gender / Gender identity
- Familial status
- Marital status
- Sexual orientation
- Participation in the Section 8 Program or other subsidy programs
- Arbitrary Discrimination
Arbitrary discrimination is any choice that discriminates against a group of tenants, like choosing not to rent to tenants who have tattoos or because of the way a tenant dresses or looks. Any arbitrary rule that denies tenants access to your rental property is considered arbitrary discrimination and is illegal.
Use a Standardized Tenant Screening Checklist
The best way to remain within your legal boundaries during the screening process is to use a standardized tenant screening checklist. If you follow a standard, fair, and legal set of screening steps and apply them to each prospective tenant, you can avoid any legal trouble.