It’s such a loaded question, isn’t it — what are smart landlord strategies to tell candidates that the property, well, it’s going to be rented to someone else?

 

Landlords can find communicating this to candidates stressful. They may worry about the candidate’s reaction, uncertainty over compliance requirements, and more.

Fear not!  Here are some smart landlord strategies to avoid that stress, while remaining compliant and professional.

1.  You are empowered to select the most qualified tenant — just be careful about appearances

As the landlord, you are free to select the most qualified applicant.  You are entirely within your rights to select the applicant who best meets your criteria.  That means you can select applicants based on your pre-determined acceptance criteria regarding credit, criminal, eviction history, landlord references and so forth.  Background criteria can — and should — be deciding factors.

Your responsibility as a landlord is to abide by Fair Housing, Fair Credit, and other local regulations as you advertise and select your tenants.  While you stay in the guidelines, appearances and what you convey are important.

2.  Treat all applicants consistently

To demonstrate your compliance, treat all applicants consistently.  This sounds easier than it is in practice.

For example, we are frequently asked if backgrounds must be run on all applicants.  The short answer is no – if your rent to income threshold is 3x, and you see that your applicant’s listed income on the application doesn’t meet that, there is no need to run a background.  You are treating your candidates consistently by having a stated rent to income threshold and keeping that consistent for all candidates.

So you see, appearances are important, and it may be easy for applicants to get the wrong idea.  Onto communication.

3.  Here’s what you say

In this case, less is more.  Do not over-complicate matters.  Here are three good phrases to put in your repertoire:

We want to let you know that the property is no longer available.  We’ve made a decision to rent it to other applicants.”

Thanks for your interest in the property.  We’ve decided to go another direction.”

Thanks for your interest.  I don’t think we have a fit at this time.”

To be compliant, if you made your decision in whole or in part on anything in the background report, you must provide Adverse Action.

Technically, this can be verbal, though clearly written is best for a documented paper trail.  This Adverse Action letter lets the applicant know that something in the background report played into the decision, that the applicant has a right to get that background report, and to dispute any inaccuracies in it.

If your decision is not based in whole or in part on the background report, the obligation to explain more does not exist.

4.  What if the applicant starts asking me questions?  Do I have to process applications in the order received?

Remember the keys here are compliance, consistency, and the legitimate appearance of consistency.  You are not bound to review applications in order, though it can present more of an appearance of consistency.

Simply put, craft a process that is clear and defensible.

Your process might be to run background checks in batches of 10 on applicants who meet your stated acceptance criteria, and to select the best applicant from that batch.  Just be prepared to defend what is ‘best’ and how your process does not discriminate.  Or, your process could be to run applicants in order and take the first one that meets your standards.

In Summary

Remember the keys are compliance, consistency, and the legitimate appearance of consistency.  And when communicating with candidates, know your obligations and rights.  Use these smart landlord strategies to develop your communication protocol and remove stress!


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