Can a Landlord Accept Multiple Applications?
A big reason why searching for an apartment can be difficult is the amount of competition you face on a daily basis. Property owners are allowed and even encouraged to accept multiple applications at the same time. This means that other rental applications may be coming in while you're being screened as a possible tenant. Rental owners want to find the best tenant as quickly as possible, so it's in their best interest to keep their options open.
However, property owners aren't free to choose just anyone out of the pile. There are rules and regulations governing how applications should be evaluated in order to ensure fair housing practices. The more applicants the landlord rejects, the greater the chances of discrimination lawsuits.
To minimize the risk of discrimination claims, rental owners often accept the first qualified applicant who applies. Although this strategy is perfectly acceptable, it comes with the major downside of possibly missing out on applicants that may want to pay above market value, in advance, or sign a lease with more favorable terms for the property owner. Even if you're happy with your first candidate, accepting backup applications is a good idea in case your first choice chooses another unit, or their tenant screening report comes back negative.
In this article, we’ll discuss why property owners should accept multiple rental applications, how they should evaluate applications, and how they can ensure a fair selection process.
Why would a landlord accept multiple applicants?
Property owners entertain more than one application at a time because it generates competition among renters and provides more options for them to choose from. Although rental owners prioritize filling vacancies as quickly as possible, they're also looking for responsible tenants that will pay their rent on time and take care of their rental property. As a result, marketing their rental to as many renters as possible is a sound business decision.
How do property owners evaluate rental applications?
Most property owners have a a list of qualification requirements in regards to financial and behavioral history. Although this varies from one owner to another, the typical criteria includes:
Minimum income requirements can easily be verified through paystubs, W2s, or bank statements. Most property managers are looking for an applicant whose rent payments wouldn't exceed one third of their gross income.
Tenants are more likely to pay rent when they have stable jobs. As a result, prospective tenants should consider either establishing a minimum duration at their current job or including a job offer letter in their application. Requiring one full year of employment is usually the standard.
An applicant with a bad credit report does not necessarily make a bad tenant. However, low credit scores are not good indicators of financial responsibility. A rental owner might deny an application if a tenant's credit score is too low, and they reserve the right to as long as they consistently deny other applicants with the same credit score. A credit score below 580 is usually considered poor.
An applicant's rental history is one of the most valuable pieces of information for a property owner. In addition to a good reference from a previous landlord, the applicant should have a history of on-time rental payments. This can be difficult to evaluate if the renter has never signed a lease before. In this case, property owners may request a guarantor or co-signer be involved in the lease agreement.
A tenant with no criminal background is a natural preference for many property owners. However, some states prohibit discrimination against people convicted of crimes. Applicants with violent crime or drug convictions could be rejected. However, applicants with minor offenses unrelated to their financial or behavioral conduct should not be ruled out. As a rental owner, it's best to avoid asking a tenant if they've been arrested, as this could be considered discriminatory. Keep in mind, being arrested and being convicted of a crime are two separate things.
How can property owners ensure a fair selection process?
As a rental property owner, it's best to keep your list of tenant qualifications directly in front of you as you screen prospective tenants. This makes it easier to evaluate potential renters according to consistent criteria. If more than one applicant meets all of your qualifications, you can choose between them fairly by adhering to one of the following practices:
Select the first qualified applicant
When there are multiple qualified applicants, one way to choose is by prioritizing applications by the date in which they were received and offering the property to the first verified applicant. While this is a quick and easy method, choosing the first verified applicant doesn't necessarily mean you'll choose the most qualified applicant.
Select the most qualified applicant using a consistent ranking system
If you'd like to end up with the best possible tenant, simply choose the most qualified applicant according to a fair ranking system. A rental owner has the right to select an applicant who surpasses certain minimum qualification criteria over an applicant who doesn't, as long as all applicants are evaluated using the same criteria. If you have several applicants who pass the minimum requirements, make sure to document why you chose one applicant over the other.
Complying with the Fair Housing Act
The Fair Housing Act (FHA) prohibits discrimination based on race, color, religion, sex, or disability and requires landlords to provide reasonable accommodations to qualifying renters. You might assume that as long as you don't intentionally discriminate between applicants you won't have any issues with tenants who are denied. However, certain mistakes can give the impression of housing discrimination even if you aren't showing preferential treatment.
Accepting applications out of order, using inconsistent application criteria, and failing to document the tenant screening process are a few simple mistakes that have gotten rental owners in trouble. If a prospective tenant suspects they have been discriminated against, they could file a fair housing complaint and seek litigation.
Your best defense is to establish some type of screening criteria and document the tenant selection process. As long as your selection criteria doesn't go against a protected class listed in the Fair Housing Act, you shouldn't run into any issues with fair housing laws.
What isn’t protected under the FHA?
Although the FHA provides renters with several protections, it doesn't defend their right to smoke or own a pet. Smoking and owning a pet are considered lifestyle choices and, as such, are not protected classes. The only exception to this rule is service animals. Pet rules and related fees, such as pet rent and pet deposits, are not applicable to tenants with service animals.
Rental owners also reserve the right to deny applicants with bad rental history or poor credit. So if an applicant's references from previous landlords are consistently negative or if their credit score is extremely low, you can deny their application. Just keep in mind that the Fair Credit Reporting Act requires property owners to provide applicants with a notice of their application denial if it was partially or entirely based on information found in their consumer report.
The bottom line on accepting multiple applications
Accepting multiple rental applications is certainly legal and even encouraged among property owners. This is because rental owners have the right to choose the most qualified tenant for their property according to their application criteria.
However, it's important to note that rental owners are also responsible for providing applicants with fair housing opportunities. As a result, it's best for rental owners to establish a fair and systematic selection process for their tenants. The tenant selection process should evaluate factors such as income, employment history, credit score, rental history, and criminal background while staying away from protected classes such sexual orientation, family status, and natural origin, among others.
Some rental owners prefer to accept applications on a first come basis to reduce the risk of Fair Housing Act conflicts, while others carefully evaluate equally qualified tenants while remaining FHA compliant. In either case, it's best for rental owners to base their ranking system based on legitimate business criteria and document the tenant selection process. This helps protect rental owners against potential legal claims and ensures local landlord tenant laws are followed.