Landlords often want an answer to the question, “Is a rental application legally binding?” before they have a prospective tenant apply to rent their property.
As a landlord, you likely desire to verify a prospective tenant’s credit and other background information.
And, you probably want to go through the entire rental process in a way that is non-discriminatory and complete, adhering to federal and state laws while mitigating risk.
These common concerns prompt property owners to wonder about the steps to help a landlord legally use a rental application to screen potential renters.
A rental application is a release form that provides the landlord with information and permission to conduct a background check on an applicant.
What is a Rental Application?
Simply put, it is a tool that landlords use to evaluate and consider a prospective tenant for a rental opportunity.
There may be dozens of interested parties for any room, apartment, or house for rent, and a landlord needs a way to determine which of them will be the most desirable tenant.
A lease application ensures that the landlord is fair to all applicants and adheres to the federal Fair Housing Act (FHA) requirements as well as state and local fair housing laws, prohibiting discriminatory housing practices.
Prospective tenants have the right to sue a landlord if they believe they were denied a rental because of their race, gender, or religion. So, an application helps protect landlords by showing that they considered all applicants equally.
At the same time, a landlord needs to be sure that prospective tenants can pay their rent in full and on time and will treat the property well.
What Should a Basic Rental Application Contain?
The basic rental application form should include enough detail for the landlord to make an informed decision about the tenant.
It should include spaces for the prospective tenant’s contact information, previous rental history, and employment history.
There are some questions that a landlord may not include in a lease application. The FHA prohibits discrimination based on race, gender, religion, and other protected categories.
So, an application may not contain questions that inquire about:
- An applicant’s race or nationality
- The applicant’s place of birth
- An applicant’s religion
- How many children an applicant has
- An applicant’s disabilities
Additionally, almost all states have adopted laws that expand on the Fair Housing Act to prohibit discrimination based on gender identity or sexual orientation.
Use our rental application form to help craft a basic application that will provide the information needed to screen prospective tenants thoroughly.
A properly drafted template also helps you check references quickly whenever you have a rental to fill.
Can a Landlord Deny a Rental Application?
Landlords can deny an application if the prospective tenant does not meet their requirements.
They may also reject an applicant who has failed to complete the application or pay any required application fee.
A landlord may legally deny an application if an applicant:
- Has a poor credit rating
- Has insufficient income to cover the rent
- Has a history of being evicted, within certain limitations
- Has an identity and history that do not match the application
- Smokes or has pets, if not allowed in the rental property
- Provides false information
- Applies for a senior community (i.e., a “55 and older” community) and is too young or has custody of minor children
In some jurisdictions, a landlord may reject applicants with a criminal history while others prohibit this as a legitimate cause.
If landlords refuse a prospective tenant, they should send a rental application denial letter as soon as possible so the applicant can continue looking for a new rental.
Use our rental application builder to help craft a basic application that will give you the information to screen prospective tenants thoroughly, and approve or deny applications based on legal criteria.
Frequently Asked Questions (FAQs)
Landlords should include the following information:What should be on a rental application?
The best way to reject an application is to send a denial letter by mail as soon as possible after the landlord denies the application. The rejection letter should provide the reasons for rejection and include contact information for further questions. According to the Fair Credit Reporting Act (FCRA), landlords must provide a written notice if they take adverse action against an applicant based on information revealed in a consumer report.How do you reject a rental application?
A guarantor is also known as a co-signer. Applicants often need a guarantor if they have poor credit or no credit history. When guarantors provide information on a lease application, they are co-applicants alongside the applicant. A guarantor typically needs to provide: A guarantor will sign the lease along with the primary applicant if that applicant is accepted. Guarantors are also responsible for the rent if the primary applicant cannot pay. Being a guarantor is like being a roommate or a co-tenant, and it comes with the same responsibilities.What does a guarantor need to provide on a rental application?
Before landlords can run a background check on a prospective tenant, they need to get written consent from the applicant. A basic application should contain language that states the landlord will use that information to check the applicant’s criminal background and credit history. [lt_tip]There are many reputable background search agencies and private investigation services. There are also many disreputable ones, so a landlord should research a company before entrusting sensitive information to a third party.[/lt_tip] Background checks typically cost $50 or more, which is often why landlords charge fees for the rental application. Landlords should allow for this cost when calculating the cost of the application. Keep in mind, some states prohibit or limit the amount landlords can charge a tenant for credit and background checks. For instance, New York limits the fee to the actual cost of the credit and background check, but no more than $20.How to run a tenant screening background check?
