While it can be a great thing to receive plenty of applications from interested potential tenants, it can also lead to some Fair Housing Act issues, if you refuse to accommodate prospective renters due to their race, religion, color, national origin, sex, family status, or disability.
To prevent this situation, JMAX Property Management has offered a guide on how to create a proper process for rental applications. Here is a list of tips you can apply:
1. Have a First Come, First Serve Policy
Applications should be reviewed in the order submitted. You want to establish fairness early on. Otherwise, you can be guilty of being biased.
If there is a qualified candidate who handed out their application first, then it is reasonable to accept that applicant. This practice protects you from accusations of discrimination and steers you from potential lawsuits.
2. Create a Solid Tenant Screening Procedure
Screening applicants is the proper way before accepting a long-term tenant. Having a list of criteria makes it easy to check if the potential renter qualifies.
It makes it easier to check the details, such as if they are bound to be prompt in paying the rental dues and if their income is sufficient to pay the rent. You can also review their tenant history.
Before marketing your rental space, you should already settle on your criteria list for assessing candidates. Make sure that these factors comply with the Fair Housing Act.
You should also make it objective, such as the income requirement, acceptable credit score range, and good rental background. A written policy for screening also guides renters and ensures fairness.
Landlords should take time to:
- Review the Renter’s Background: Ask for proof of income by requesting pay stubs and bank statements. You can also ask for authorization to check their credit score to ensure that they are responsible for paying bills.
- Check the Renter’s Criminal History and Eviction Records: Although circumstances can differ, you can still prioritize renters who showcase a clean record and will be unlikely to give you future headaches.
- Scrutinize References: It is always best to reach out to former employers and landlords to further evaluate a renter’s application. With good references, you can make a better decision. If a previous landlord tells you that the potential tenant broke property policies often, you can take note of this.
3. Set an Application Deadline
When you have a deadline for receiving rental applications, you can manage a bunch of applications and limit delays. It also encourages prospective renters to submit requirements on time. It will also help you identify which ones are serious about being considered a renter.
The deadline must be mentioned in the application form and it is also a good practice to tell candidates the expected processing and assessment period, so they will know whether they got approved or not.
With a deadline set, you can make the process seamless since you won’t be distracted by new applications submitted and a growing pile of forms to review.
4. Update Applicants
It is best to establish an open line of communication when you are dealing with multiple rental applicants. Inform them of what the next stage of the process is and the application status.
Be patient and responsive to inquiries to build a good rapport early on. This builds trust and can lead to positive engagement. You don’t want them to misunderstand and cancel their applications.
5. Have Backup Candidates Ready
Changes can happen at any time. An applicant may find a more preferable and convenient area than your unit. A deposit may not be made, so it is recommended to consider backup applicants who are committed to residing in your rental and are qualified.
Having applicants on a waiting list can make it easy for you to contact them when the unit is available. It lets you avoid the downside of vacancy and potential income loss. You can also save time marketing your rental place again.
6. Learn From Experience
You can learn and adjust your procedure after managing multiple rental applications. Take time to evaluate where you can improve your process to ensure they streamline your work as a landlord.
Ask applicants where they want to see improvements and whether they are happy with the service and the information given. Check how effective your marketing process is as well and whether it provides clear details. The more evaluations you conduct, the better your procedure becomes to attract the best tenant candidates.
7. Document the Process
You can avoid discrimination complaints by documenting your process. As long as the procedure is uniform, meaning the standards applied are the same for each applicant, then there will be no issue.
Keeping documents will be great evidence to show in court if the need to defend your process from claims of violating the Fair Housing Act arises.
Accepting a New Tenant
You can safeguard yourself by documenting the reason for selecting a tenant over other applicants. Make sure to record the calls and communication outreach done to former landlords. When you have solid reasons for refusing a candidate, it will be easy to defend your decision.
Denying a Renter
It is required to inform the applicant that their rental application is denied. You can send a letter or email and include details for the rejection and what the criteria were. If the reason was a low credit score, then you need to write a letter to the candidate and share the info report that led to the rejection.
In the letter, make sure to include the credit agency’s name and address that was the source of the credit report. You can consult with an attorney before you send the letter to make sure that the essential details are available.
You can also contact a trusted property management company to handle the tenant screening and selection for you, as well as the full management of your rental property. These companies often have organized systems to deal with multiple applications.
Bottom Line
Handling multiple applications for a single rental property can be overwhelming. That’s why it’s important to create a consistent, rigorous process to help select the best renters for your property and avoid discrimination under the Fair Housing Act.
If you have questions regarding the tenant application process, or simply want to know more about property management, contact JMAX Property Management today! We’ll help you get started on your real estate journey.
