Application

Contents

Nearly all landlords require prospective tenants to complete a rental application. The application requires information about the applicant's:

  • income,
  • credit,
  • employment,
  • rental history,
  • Social Security number, and
  • references.

The application should also contain details about the property (two bedroom, two bath apartment) as well as statements concerning:

  • the amount of the application fee, if any,
  • the amount of the security deposit,
  • length of the tenancy,
  • what notice is required for terminating the rental agreement, and
  • the applicant's consent to a background and credit check.

Although the application form is not a substitute for the actual lease agreement, including such basic information helps the tenant understand the fundamental terms of the lease she may be signing later.

The rental application should be:

  • filled out completely, including Social Security number, driver's license number, current employment and emergency contacts; and
  • signed by the person applying to the live in the rental property. By signing (if a statement regarding a credit check has been included on the application), potential tenants are consenting to credit and background checks, verification of the information (calling employers, banks, prior landlord) and allowing references to be confirmed.

An application fee may be required to cover the landlord's cost for credit and background checks. This fee should be less than $100; it will not be refunded if the application is rejected or the applicant decides not to rent the property.

Application deposits are becoming more common. This fee is an advance security deposit and shows that the applicant is serious about renting the property. If the applicant ends up renting the property, it is applied toward the security deposit.

TIP: Ask questions of prospective tenants from a prepared list. It is important to ask each of the applicants the same questions to avoid accusations of discrimination. Do not ask questions about age, ethnicity, sexual orientation, disabilities or religion.

Can I rent to a minor?

No. Minors cannot enter into real estate contracts. If you do rent to a minor, the minor has the right to "disaffirm" the lease agreement, making it void and unenforceable. A minor can occupy the premises but an adult must sign the lease agreement. For example, college students typically have an arrangement where the parent signs the lease and the student lives in the apartment.

Can I ask about religious affiliation or marital status on the rental application?

No, if it applies to your rental property, the Fair Housing Act prohibits questions concerning race, color, national origin, religion, sex, handicap and/or familial status.

I got a bad recommendation on an applicant from a previous landlord. Do I have to disclose this to the person who applied?

No. However, if you discriminate by refusing to rent to this person based on a previous landlord's information, you are acting illegally. For example, if the previous landlord told you that prospective tenant had children and you decided against renting to her, you are discriminating based on familial status.

I completed an application and paid an application fee. If I have not heard from the landlord, have I been rejected?

Probably. If more than a week has passed, you can assume you have been rejected. Some laws give the landlord 7 days to notify an applicant she has been accepted or rejected.

Some laws do not require you to enter into the lease agreement if the landlord has failed to notify you of your application's acceptance within 7 days of submission. You have the right to rent elsewhere. Although you are not entitled to a refund of your application fee, any security deposits must be returned to you as the landlord was late in his acceptance.

My application was approved but I am moving to another complex. Can the landlord keep the application fee?

If you were approved and did not sign the lease, the application may allow the landlord to keep the entire deposit. Typically, the fee is nonrefundable under any circumstances.

Even without a written provision in the application, if the landlord turned away a potential renter before you told him you had changed your mind, he may have a right to keep the application fee as compensation for his loss of a renter.

I paid an application fee at an apartment complex before my application was approved and decided that same day to rent somewhere else. The landlord will not return the fee. What can I do?

Review the application carefully. Most applications contain a provision that the fee is nonrefundable regardless of whether you change your mind, the application was rejected or the application was approved.

If it turns out that the landlord is improperly retaining the fee, and you cannot convince him otherwise with a phone call, you need to write a demand letter. The demand letter should state that you are entitled to the return of your fee and you are demanding it by a certain date or you will sue. If you still are unable to get the fee back, you can sue for it. However, the amount of the application fee may not be worth the effort of going to court.

Credit Check

Landlords now run "credit checks" on all prospective tenants. Credit reports are accessed through one of the three major consumer-reporting agencies (CRAs) listed below. Any tenant who is unsure about the state of their credit can contact one of the agencies and request a copy of their credit report. (Beginning September 1, 2005, consumers may obtain one free copy of their report every year.)

Equifax Credit Information Services, Inc.

PO Box 740241

Atlanta, GA 30374

To order report: 800.685.1111

Experian (formerly TRW)/National Consumer Assistance Center

To order report: 888.397.3742

Transunion/Consumer Disclosure Center

PO Box 1000

Chester, PA 19022

To order report: 877-322-8228

The credit report notes all late payments on credit cards, mortgages and loans. Any judgments, including foreclosures, evictions or bankruptcies are listed on the report as well. If a prospective tenant has a record of late payments or other negative history, the landlord may choose not to rent to that person.

TIP: Typically, the rental application includes a statement that, by signing the application, the prospective tenant consents to a credit check. If you do not want the landlord to access the credit report, tell him and mark out the provision in the application form, but do not be surprised if your application is rejected.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) is designed to protect the privacy of consumer report information and to guarantee that the information supplied by CRAs is as accurate as possible. The FCRA requires landlords who deny a lease based on information in the applicant's consumer report provide the applicant with an "adverse action notice." If you receive such a notice, you are entitled to a free credit report (in addition to the one you are entitled to once a year) from the CRA listed in the notice.

Questions about the Fair Credit Reporting Act can be answered by calling 877.FTC.HELP. Information is also available online.

TIP: If your application is rejected on the basis of a report from a reference-checking agency, you are entitled to a copy of the report under the FCRA. However, a reference verified by the landlord or his employee is not covered by the FCRA if your application is rejected. You are not entitled to a copy of their notes or other documents regarding the references they obtained.

Banking History

Banks are unlikely to discuss specific details of a tenant's account; however, they will generally confirm whether the applicant has an account and if it is in "good standing."

TIP: If the applicant has written you a check for the application fee, you may call the bank, ask for the accounting department, tell them the account number and amount of the check and ask if the check will clear.

Employment and Income

Landlords want to know whether a prospective tenant can pay the rent. The applicant's employer may be contacted to verify employment and salary.

TIP: If you have filled out a rental application, let the office manager or human resources department at your job know that they may receive a call from a potential landlord.

I filled out a rental application and, although I never authorized it, the apartment manager pulled a credit report on me. Is this legal?

Yes, under the Fair Credit Reporting Act your credit report can be viewed "in connection with a business transaction that is initiated by the consumer." In other words, by filling out a rental application you have begun a transaction-the process of renting an apartment-and the landlord has the right to use a consumer reporting agency to examine your credit.

The landlord who does not have a written authorization could be violating the FCRA if an apartment was not available to rent. In that situation, the applicant can successfully argue that there was no business transaction because there was no apartment to rent at the time the consumer report was pulled.

The property manager wants a cosignor on my lease because of some negative history in my credit report. Does this mean I can get a copy of the credit report?

Yes. Requiring a cosignor on the lease because of your credit history is considered an "adverse action" and federal law requires that the property manager give you an "Adverse Action Notice." The agency that provided the report listed in the notice must provide you with a free copy of your credit report.

TIP: Other actions that are considered adverse, even though you were able to rent the apartment, include:

  • increasing the security deposit;
  • requiring first or last month's rent when it is not normally required; and
  • raising the rent (to dissuade you from renting).

My apartment lease is up for renewal. Can my landlord check my credit history without my permission?

Yes. Laws do not require your landlord to get your permission, written or otherwise. Because you are currently living in one of his apartments, the FCRA considers you to be in a business transaction.

A landlord can also pull a consumer report on a tenant that owes a debt, without the tenant's authorization. For example, the tenant who is routinely late with rent, has damaged the apartment in excess of the security deposit or moved out with time left on the lease owes a debt, and his credit history can be examined without authorization.

I pulled the credit history for a rental applicant and checked with previous landlords. The applicant's history showed some late payments but I primarily denied the application based on her rental history. Is she entitled to an Adverse Action Notice?

Yes. Although the applicant's credit history was not your main issue with renting to her, because it was part of what you looked at in deciding whether to approve the application, you must provide a notice.

If my property manager uses a consumer reporting agency to verify rental applications, am I, as the landlord, still responsible for notifying applicants of an adverse action?

Yes. Although you are using a reference-checking agency, any information you receive from them based on a consumer report that results in your decision not to rent or increase a security deposit triggers an Adverse Action Notice. You must comply with the FCRA even if you did not view the credit report.

If the agency did not use a consumer-reporting agency, you are not required to provide an Adverse Action Notice. Your obligation to notify an applicant is triggered only when you use a report from a consumer-reporting agency to make your decision.

TIP: If you are a landlord and do not want to be subject to FCRA requirements, you or your employees should verify the application on your own. Although the consumer-reporting agency provides information you cannot obtain, you can still verify employment and income, check criminal history and talk to previous landlords about the prospective tenant.

I am a landlord. Can an applicant I did not rent to and failed to give an Adverse Action Notice sue me?

Yes, if you used a consumer-reporting agency to make your decision not to rent. The FCRA allows the applicant to sue you in federal court for compensatory damages, punitive damages if the violations are deliberate, and attorney's fees. If you simply made an isolated mistake and you normally send out Adverse Action Notices, you are not liable to the applicant and the lawsuit will be dismissed.

My company will not give out salary information over the phone. What can I do to show the landlord I am employed?

Provide a copy of your most recent paycheck to the landlord and tell him it is against company policy to disclose employment information over the phone. If your company will provide you with a letter stating your salary and length of employment, present a copy to the landlord or have one faxed from your place of employment.

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