The Key Points of Michigan Renters Rights

Once a rental agreement is assigned, the household which occupies a rental unit becomes a tenant.

This gives them access to all of the renters rights they are allowed under Michigan’s landlord tenant laws.

In basic terms, this means that renters are allowed to live in a place that is habitable.

This includes the actual property in addition to the structure being occupied.

Common areas should also be maintained for normal use. Here are the key points of Michigan renters rights to consider in addition to the rights that are listed above.

1. Renters Generally Have a Right To Receive Repairs In a Reasonable Time.

Renters can ask their landlord to make a needed repair in writing.

Landlords must generally then make this repair in a reasonable amount of time.

Renters have the right to request a deadline.

The exception to this rule is that Michigan allows this right to be waived for leases that last longer than 1 year.

If the repair is not made, then renters have the right to place their rent into an escrow account or pay for the repairs and deduct the cost.

2. Renters Have The Right To Have a Quiet Enjoyment Of The Property.

Landlords are not allowed to do anything that prevents a renter from having access to their home.

This means renters must not be threatened, have force used against them, or have personal property removed, withheld, or destroyed.

Locks may not be altered without tenant permission.

Landlords may not even enter without permission unless they’ve offered previous notice for an inspection or sales tour or there is an emergency repair which must be made.

3. Renters Have The Right To Change The Terms Of The Lease.

If a tenant and a landlord mutually agree to change the terms of a lease while it is still active, then Michigan allows for this to take place.

Any changes should be in writing, signed by all parties, and made as an addendum to the lease.

There are some reasons why a landlord could make changes to a lease without the agreement of a tenant, including the need to raise rent to meet raises in property taxes, utilities, or insurance costs.

4. Renters Have The Right To Hold Over After An Expired Lease.

When a renter’s lease ends, they are allowed to keep living in the rental property if this is also agreed upon by the landlord.

Both parties can either negotiate a new lease or the tenancy can become month-to-month instead.

Some leases offer an automatic renewal, so renters must pay close attention to what their lease says when they initially sign it.

5. Some Renters Have The Right To Break Their Lease.

If a renter fears that they might become a victim of domestic violence, then there are circumstances which allow them to break the lease and move to a new location without having an obligation to pay rent through the end of the lease.

This includes stalking or various types of assault.

6. Renters Have The Right To Receive a Full Security Deposit Refund.

Landlords are allowed to keep a portion of the security deposit when there are damages to a rental unit which must be repaired.

Damages cannot be charged when what needs to be repaired is normal wear and tear.

If a rental unit has a carpet which is 20 years old and it needs to be replaced because it has just worn out, the last tenant to occupy the space doesn’t foot the bill. Normal wear and tear can be different for different households as well.

A family with 3 kids and 3 dogs will have a different level of wear and tear than a newlywed couple renting their first property together.

7. Renters Have The Right To Have a Capped Security Deposit.

Michigan allows landlords to charge a security deposit that is 1.5x the amount of rent they charge in their lease. If the monthly rent on the property is $1,000, then the maximum security deposit would be $1,500.

This cap applies no matter what a landlord may try to call this deposit and applies even when the first and last month’s rent is requested to begin the tenancy.

These key points cover just a few of the renters rights which are provided by the state of Michigan.

If your question was not answered here, then be sure to consult with the specific state statutes which govern your situation under local landlord-tenant laws or ask a knowledgeable attorney.

Louisiana Landlord Tenant Law: Important Points to Know

Before moving into a rental unit or becoming a landlord, Louisiana has some unique aspects of their landlord tenant law which should be reviewed.

In basic terms, tenants are responsible for paying rent on-time and maintaining a healthy and safe living environment.

Landlords must provide a residence which is habitable and up to building codes.

Here are some of the important points to know beyond those basics.

1. Lease Terms Must Be Specific.

If there is not a fixed term specifically stated on a rental agreement, then Louisiana considers this to be a month-to-month lease.

Tenants or landlords can terminate a month-to-month lease with 10 days written notice before the end of the month.

2. Late Fees Must Be Included In a Lease.

If a rental agreement does not contain any language about paying a late fee when a tenant misses a rent payment deadline, then Louisiana forbids landlords from charging one.

There are no set laws about how much a late fee which is legally included in a lease can be.

3. No Alterations Are Allowed Unless They Meet Or Improve Tenant Habitability.

Landlords must provide tenants with a private living experience.

This means in Louisiana, unless there is a need to make an alteration to come into compliance with expectations, a property must not be altered while it is occupied.

Tenants can make alterations, however, with landlord permission.

4. Louisiana Holds Those Who Cause Damage To a Rental Unit Responsible.

If a landlord fails to maintain a habitable living environment, then any needed repairs are their responsibility.

Tenants are responsible for their damage or damage caused by guests or pets which exceeds normal wear and tear.

If a landlord fails to make a needed repair for habitability issues and a tenant has provided them with a written notice and reasonable time, then the tenant may pay for the repairs and deduct a reasonable price from the rent.

5. Pet Fees Are Not Covered By Security Deposit Terms.

A landlord may or may not choose to charge a pet fee.

If they do, then this amount is not considered part of the security deposit, which is returnable after a tenant moves out.

These important points are just a few of the highlights presents under the Louisiana landlord tenant laws.

For specific answers to any questions you have that were not covered here, be sure to check with your local statutes or consult with a legal professional.

What Is the Eviction Process in Missouri

Sometimes a landlord has no choice but to begin the eviction process on one of their tenants.

Missouri offers landlords some specific steps which must be followed in order for this process to begin.

This formal process is required any time a tenant must be removed from a property, even when there is a potentially dangerous situation going on.

Most landlords will initiate the eviction process because of a failure to pay rent.

Any provision within a lease that is not met can also be grounds for the eviction process in Missouri to be initiated.

Evictions may also occur after a fixed term lease has expired without renewal or if a landlord wishes to terminate a month-to-month tenant.

No Specific Amount of Time Is Required

When the issue is for the non-payment of rent, there is no specific amount of time that is mentioned in the landlord tenant laws of the state.

As a general rule, however, landlords should give their tenants 5 business days in order to pay any rent that is due.

The amount of the demand may include a late fee as well if the rental agreement allows for these fees to be paid.

Paying the rent, but not the late fee, may be an active defense for a tenant fighting an eviction.

If the rent is not paid after the demand has been issued and an appropriate amount of time has passed, then a landlord may proceed with a rent and possession lawsuit against the tenant.

This allows a landlord to proceed with the eviction process in Missouri and seek a monetary award for the amount due them at the same time.

A court date will be set. If a tenant fails to show up for the hearing, then a default judgment will be issued.

This may result in an order to leave the rental unit, monetary damages being awarded, or both.

The Unlawful Detainer Process

When the issue is different than a failure to pay the rent, landlords must pursue an eviction process that is a little different.

 

This is known as the unlawful detainer lawsuit. It is used to remove tenants who have not met some component of their lease or have failed to move out after their rental agreement has expired.

This lawsuit against a tenant follows the same process as the rent and possession lawsuit, but with one exception.

Landlords are not allowed to pursue any monetary damages under this eviction process.

The court will only issue a writ of possession if landlords are awarded the judgment and the Sheriff’s office or other designated official are the only people who can enforce the court order.

Tenants are given 10 days to leave after a judgment has been issued.

Tenants Have the Right to Appeal

Tenants may lose their case, but that doesn’t mean it is the end of the story for a landlord.

Tenants can appeal a judgment against them within 10 days of that judgment occurring.

While the appeal is pending, however, a tenant must post a bond with the court that is equal to any monetary judgment that has been made against them. If the tenant wins the appeal, then the money is given back to them.

If not, the court will give the money to the landlord instead.

An appeal must be filed within 10 days if a tenant is still using a rental unit. If no appeal is filed and the tenant is still holding possession of the rental unit after 10 days have passed since the judgment, a landlord can file for a writ of possession.

This allows the Sheriff or designated official to remove the tenant from the property.

What About an Expedited Eviction?

Some landlords may be able to request an expedited eviction process in the state of Missouri.

This is allowed when the eviction is because the tenants or their guests are engaged in drug related activities or has allowed people in the rental unit or on the property that the landlord has not allowed.

If tenants caused damage to a rental unit that is equivalent to 12 months of rent, this process may also be requested.

If a landlord attempts to evict a tenant on their own, then the eviction process doesn’t necessarily stop.

Self-help evictions do open up a landlord to the possibility of being sued by a tenant because Missouri considers such actions to be illegal.

Any damages that result from turning off utilities, switching locks, or removing the front door [or other actions not listed here] are determined by the court.

The eviction process in Missouri is a streamlined process which is designed to help landlords manage their property effectively.

As long as these steps are followed and appropriate legal counsel is available, this difficult task can become a little bit easier.

Arkansas Security Deposit Law for Landlords and Tenants

If a landlord in Arkansas owns 6 or more properties or has an agent, such as a property manager, collect rent on their behalf, then the security deposit law applies to them.

Landlords who do not meet this qualification are not covered and the law does not apply. Here are the key points of the law that you’ll want to know.

1. There Is a 2x Monthly Rent Maximum That Can Be Charged.

This means if a single family home is being rented out at $1,000 per month, the maximum security deposit for that home would be $2,000.

The amount being requested should be placed in writing within the context of a rental agreement.

2. Landlords Have 60 Days To Return a Security Deposit.

A landlord does not need to give a security deposit back at the same time a move-out occurs.

An itemized list of any deductions is required, along with the amount being refunded, within 60 days if the landlord is covered by the law.

If not covered by the law, a tenant may need to make a demand for their security deposit.

3. Sometimes a Landlord Can Keep An Entire Security Deposit.

Tenants have 180 days to make a demand for their security deposit if it has not been received. If they do not make this demand, then a landlord may be able to keep the full amount.

The issue here is that if a landlord does not return a deposit with an itemized list, a tenant can sue in small claims court for 2x the deposit amount plus reasonable attorney’s fees.

4. Wear And Tear Is Not Charged To a Security Deposit.

What constitutes “normal” wear and tear is usually reflective of the type of damage that occurs.

One person puts less wear and tear on a carpet than 7 people and 2 dogs.

If there are dog scratches in the carpet that expose the padding, this may be considered damage. If there are just heavy wear patterns, they may not be considered damage.

The Arkansas security deposit law is designed to protect landlords from needless and costly damage to their property while giving tenants an insurance policy against the unexpected.

Remember that a tenant can be evicted for damages because of unreasonable use, even if the damage was caused accidentally, and that may allow a landlord to keep a security deposit and sue for repairs.

Because of this, if you have specific questions that are not covered in this guide, it is best to seek out professional legal assistance.

Navigating Month-to-Month Leases in DC

The real estate market in Washington, D.C. is booming, with increasing home prices leading to a high number of renters. But D.C. has one of the most strictly regulated rental markets in the country. One unique feature of D.C.’s rental market is that tenants have the right to opt for a month-to-month lease after their initial one-year lease expires. This means any tenant can choose not to renew their lease, but are allowed to remain in the unit under the same terms as their previous agreement as long as rent is being paid on time.

The D.C. government has a number of resources for landlords and management companies interested in learning more about this or any other regulation. But here are the main points to get you started!

  • Every tenant has the right to chose to live in the unit month-to-month. When moving into a new unit, all tenants are expected to sign a one-year lease. But when that initial lease expires, the tenant can chose not to sign a new one. It’s not legal for a landlord to ask a tenant to waive that right as part of their initial lease.
  • The terms of a month-to-month agreement are the same as the previous lease. Any clause in the initial lease is still valid under a month-to-month arrangement, but the tenant does not have to sign any paperwork for it to go into effect. Any changes to the terms should be made on a case-by-case basis and should be in writing, but be sure to check with the D.C. Housing Authority to ensure the change is legal.
  • Rent increases are allowed on month-to-month units. Depending on the rent control status of the building, the percentage of a per-year increase will vary. But landlords are allowed to raise rent once per calendar year after filing the increase with the city. The tenant will receive written, formal notification of the increase, and their rent will go up the following month. But be sure to file all necessary documents, or the increase will not be valid or enforceable.
  • Some changes can be made using voluntary agreements. A voluntary agreement is a document outlining proposed changes to a building and the terms for tenants. It is put to a vote by all tenants, and if 70% of tenants agree to the terms, it goes into effect. This is one way to make repairs or change lease terms for a building when many tenants are month-to-month.
  • Tenants must provide 30-day notification when moving out. As is common with month-to-month arrangements, any tenant who wants to terminate their vacancy must provide the landlord or management company with 30-day written notice. If notice is not given, they are still required to pay rent.
  • Evicting a month-to-month tenant is not easy. Although the tenant can leave with 30-day notice, a landlord can’t ask the tenant to leave for no reason. Unless the tenant violates a clause of their original lease, the only reason a tenant can be evicted is due to non-payment of rent.

More information on month-to-month tenants can be found at D.C. Housing Authority, and many questions can be answered by calling the Tenant Advocacy Hotline. As with any city regulation, it’s important to fully research and understand all facets of the law. Although these points will get you started, please visit the website above to learn more.

The 6 Stages Of Evicting A Tenant

Becoming a landlord is a goal for many people, and for good reason. It can be a solid way to build wealth, in the form of both ongoing ‘passive’ income as well as capital growth over time. The process of sourcing and purchasing a rental property for investment is costly and time consuming, but once a tenant is in place the hard work is done….right?

Well, that is what we would hope of course, and for the most part this is how it works. But, unfortunately, this is not always the case. Despite our most thorough screening, tenants do not always behave as we would like. The main issues tend to be refusal to pay rent, violations of the lease, damaging the property, breaking local noise laws, and causing health and safety hazards.

If you are faced with any of these as a landlord, what options are available to you?

Let’s take a look at how a landlord may deal with issues surrounding payment of rent.

Late Payment Of Rent

The first thing to establish is that late payment of rent is a serious issue. As a landlord, it is not unreasonable to consider this a serious breach of the rental lease. You likely have a mortgage to pay, so not receiving your rent payment will force you to pay from your own funds. In effect, not paying rent is therefore stealing from you.

It is advisable to have a system in place to deal with late payments right from the start. Be clear that any delay in receiving rent payments will Image courtesy of projectcensored.orgautomatically incur a fee. You must insist that this is paid if you want your tenants to take you seriously and respect your contract.

If this doesn’t help, or you are experiencing further breaches in the lease, or even outright refusal from the tenant to pay rent, then eviction may be your only course of action. It is important to be aware of the law surrounding tenant eviction as well as the fact that it can be a time-consuming and expensive process.

It can be daunting to start the legal process, so we have put together the following 6-step guide, which will suggest how to handle tenant eviction in the most fair and efficient way possible. The ideal outcome is of course to receive the rent owed and enforce the lease conditions, and, more often than not, the following steps help to achieve this.

Step 1 – Stay Calm and Start Communication

The first step when rent is not received on time should be a phone call, especially for a first-time offense. Speak calmly ? there is no sense in becoming angry  but let your tenant know that the rent must be paid immediately, and that the late fee must also be included.

This is also a great opportunity to gather information to understand why the rent has not been paid. The following questions will give you an insight into the finances of your tenant, and also indicate if the pattern is likely to repeat.

  • Why were they unable to pay on time?
  • When are they receiving pay next?
  • When were they last paid?
  • Has there been any illness or job loss?

It may be that you need to speak to the tenant about prioritizing their finances and organizing their money around paydays. The ideal outcome at this point is to receive an apology for not paying on time, as well as a promise to pay by a set date along with the late fee.

Image courtesy of EHow.comIf the tenant is not in a position to pay in the next two weeks, and they have a genuine reason (for example illness) then this is a trickier situation to navigate. Try to stay business minded regarding ‘sob stories’, as the rent still needs to be paid, and it is no fun if this has to come from your own pocket.

If you are unable to get hold of the tenant on the phone then make contact along the same lines via email.

If this first, soft step is unsuccessful in prompting a tenant to pay the rent that is due, consider putting together a letter explaining the seriousness of their actions, and the repercussions that eviction will have on them. Let them know that their credit score will be affected, and that you will sue them for the rent due. Be sure that you do not threaten the tenant at all.

Protect yourself by staying calm and acting within the law at all times. You should be aware that eviction rules vary from state to state, but there are actions which are illegal across the whole country. These are things that you should not do under any circumstances:

  • Change the locks on the rental property
  • Remove doors or windows
  • Shut off utilities
  • Touch the tenant’s possessions

You should not even enter the property without the prior consent of the tenant, as this will only cause legal complications further down the line.

If it seems that you are not able to solve the issue in a reasonable manner, there is another option that you can try prior to filing for eviction at court.

Step 2 – Pay The Tenant To Leave

This step is sure to roll a few eyes. Sure, it feels wrong. It feels that you are giving in, and why should you ever have to consider giving your hard-earned cash in exchange for the keys to the property that you own.Image courtesy of WiseGeek.com

I hear you loud and clear! But this option is the equivalent of ripping a bandage from a graze, compared to opting for surgery (which is what going to court can feel like!).

The legal process of tenant eviction is expensive, stressful and time consuming, so paying tenants to leave, in an act known as ‘cash for keys’, could be a better option. These are the steps to doing this effectively:

  • State the terms of the Cash for Keys agreement (eg the property must be empty and clean)
  • Specify the date that the tenant must be ready to exchange (normally 4 days maximum)
  • Give official notice to pay or vacate
  • Meet the tenant at the property to check that it is clean
  • Take somebody with you as a witness / safety precaution
  • If you are satisfied, present a letter detailing the agreement to be signed
  • Once you have both signed and dated the agreement, you hand over the agreed cash amount in exchange for the key.

The amount of cash is up to you, but it is usually around $500, which is far less than the cost of legal eviction.

Step 3 – Hire An Attorney

If ‘cash for keys’ is not for you, or the tenant still refuses, then you will need to begin the legal process for tenant eviction. An attorney is not essential, but it is advisable, as the process can feel like a real battle and become very complicated. A simple mistake with paperwork can cause the balance to shift in the favor of the tenant.

You, or the attorney, will start the process by drawing up the eviction notice.

Step 4 – Deliver Eviction Notice

Image courtesty of AlperLaw.comThe eviction notice should be served in person to the tenant. If they are not at the property, it may be taped to the door, or sent through the mail with a certified return receipt.

The document gives notice to pay outstanding rent (or adhere to other breaches in the tenancy lease) or vacate by a specific date. Details must be clear, with an order to comply with terms. It is advisable to look into the state-specific laws when drawing this up.

Many landlords write a letter accompanying the eviction notice to soften the blow and keep lines of communication open.

At this point, the tenant may decide to pay what is owed, and eviction can be avoided. But if the date passes without action, the eviction must be filed at this point. You or your attorney will gather a copy of the lease, the eviction notice, and a summary of your situation, and these will be filed with the court administrator while you wait for a date to appear in court.

The order to appear in court will be served in person to the tenant.

Step 5 – Appearance In Court 

Prior to appearance in court, all paperwork should be compiled, including communication around the non-payment of rent and the original tenancy Image courtesy of Everything-PR.comapplication. Either you or your attorney will be required to stand up in court to discuss the situation.

Often the tenant doesn’t appear at the hearing, in which case they lose automatically. But if they do, the judge hears both sides and makes a decision. If you lose, that is very bad luck, and is usually due to issues with the paperwork you have produced, or unfavorable behavior on your part through the process.

If you win the case, the tenant will have to pay rent and back rent, the late fees, as well as your court costs. They will also be given a date by which they must vacate the premise. You will be provided with a  ‘Writ of Restitution,’ which affords you with the legal right to remove the tenant.

You will then take the writ to the sheriff and schedule the date to remove the tenant. Unsurprisingly, you will be charged a fee for this.

Step 6 – Remove The Tenant

Once the day arrives, the sheriff will attend the property with you to supervise the ‘removal’ of the tenant from your property. Often, the tenant chooses to leave before the sheriff arrives. You may be left with a houseful of the tenant’s property, or a house in a poor state of repair. But you will have access once again.

So, as you can see, eviction can take months and prove to be very costly. The best outcome is to come to a settlement outside of court if at all possible. The best way to avoid these stresses is to build a robust screening process, but even that is not infallible. Being faced with a non-paying tenant is bad news for a landlord, but by staying calm and following the process, it can be rectified with minimal fuss.

What Landlords Should Know About Adverse Action Notices

Tenant turnover, while something that every landlord deals with at one point or another in their career, can be a pain.

It starts when you get that phone call or written notice from your tenant saying that they will not be renewing their lease with you when it comes time. The reasons are endless, and while you should take note if there is something you could have done differently with that tenant to have encouraged them to extend their stay with you, your real focus should turn to the transition process.

You will need to list your property for rent, receive applications, perform tenant screenings, and choose your next tenant, all while finding that careful balance of speed and accuracy.

Depending on how much notice you received from the outgoing tenant, this could limit the time you have to find that next tenant if you want to reduce the amount of time that your property stands vacant, but that’s never an excuse to simply shrug off certain legal procedures.

It’s a fair assumption that you will be receiving multiple applications for that rental, but no matter how many you receive, you will need to provide an Adverse Action Notice to anyone that you run a background check on and do not accept or for whom you alter the conditions of acceptance based on a background check.

What Is a Adverse Action Notice?

An Adverse Action Notice is a letter that is required by federal law through the FCRA (Fair Credit Reporting Act) which tells someone that they are being denied or conditionally accepted for something (in this case residence) based on the contents of a credit report or background check.

You must provide the letter to any rental applicant on whom you have run a consumer report and intend to either deny or alter the terms of the lease agreement for in order to accept them as your tenant.

What is considered a consumer report?

A consumer report contains information about a person's credit characteristics, character, general reputation, and lifestyle. A report also may include information about someone's rental history, such as information from previous landlords or from public records like housing court or eviction files. To be covered by the FCRA, a report must be prepared by a CRA – a business that assembles such reports for other businesses. The most common type of CRA is the credit bureau. [x]

What are some examples of a consumer report?

  • A credit report
  • A criminal, and/or eviction report prepared by a Consumer Report Agency such as TransUnion, Equifax, or Experian
  • A tenant screening with rental history and/or records attached to it
  • A reference check done by a third party hired by the landlord/property manager (through reference checks performed by the landlord or their direct employee may not be considered a consumer report)

When Would You Need to Supply an Adverse Action Notice?

The Adverse Action Notice is not limited strictly to applicants that you are denying the tenancy to.

While applicants that you have turned down for the rental should receive this notice, you will also be required to provide an Adverse Action Notice to an applicant that you are accepting, but have set additional conditions for that acceptance that you may not have set for other applicants.

A few instances that could require an Adverse Action Notice would be:

  • If you are turning the applicant down for the rental
  • If you are charging a higher deposit due to something found on the screening
  • If you require a co-signer due to something found on the screening

As a rule, if you require anything of one applicant that you may not require of someone that met all of your usual standards, you will need to provide them with this letter to explain why.

In many cases, they will be eligible to receive a copy of their credit report directly from the credit agency that the report has been run through, and part of what you will provide to them will be the contact information so that they may easily do this.

What Goes Into an Adverse Action Notice?

It’s a good practice to have a standard Adverse Action Notice that you will send out to every applicant that needs one. This will help to make sure that you are keeping things fair to each applicant and that you are providing all of the information legally required of you.

While you should always check local and federal laws to make sure that you are providing correct and up-to-date information, a few things to make sure are noted on an Adverse Action Notice can be found here:

  • The landlord/property manager’s name
  • The property that was being applied for
  • The date that the notice is being given
  • The applicant’s name
  • Information about why they are receiving the Adverse Action Notice
  • If they are being denied or if additional conditions may be set for acceptance
  • Contact information for the CRA (such as Trans Union, Experian or Equifax) that the report was run through (including a toll free number for that CRA)
    • An explanation that the applicant has a right to dispute the information with the CRA if they believe they have inaccurate information on file
    • An explanation that the applicant has a right to a free credit report within 60 days
  • A note stating that the the CRA did not make the final decision

What Can You Use and What Can You Not Use For an Adverse Action Notice

You will likely have many pieces of information that you look at during the screening process.

Between the credit report, criminal report, eviction report, references that you follow up on, and any other number of documents you may choose to check, there can be an overload of information.

The fair housing laws dictate what you as a landlord and/or property manager may and may not use to influence your final decision when you are choosing a new tenant. The laws are set up to protect your rental applicants from discrimination.

What you shouldn’t use to turn down a rental applicant:

  • Anything that discriminates against an individual that is part of a protected class – The Fair Housing Act (FHA) prohibits a landlord or property manager from discriminating against an applicant or tenant on the basis of race, color, religion, national origin, sex, disability, and family status. Local laws may add additional groups to this list.  
  • Strictly based on an applicant’s criminal history, without proof that the individual is a danger to others – The US Department of Housing and Urban Development (HUD) released a set of guidelines in early 2016 that said that while individuals with criminal records are not necessarily considered a federally protected class, blanket denial of any applicants for having a criminal record of any kind may lead to discrimination based on race or color.
  • Having a service animal in a no-pet rental – Many landlords have valid concerns over pets being in their rentals, but a service animal is not considered a pet. You may not charge a new tenant more for allowing their service animal to reside with them, nor may you deny their service animal access to the rental. If the pet damages the property, you will be allowed to deduct that from their security deposit at the end of their stay.

What you may use to turn down a rental applicant:

  • Information found in their credit report – You are allowed to set minimum requirements for credit scores, negative tradelines, or anything else found within their credit history.
  • Information found in their criminal report – If your applicant’s criminal report returns with information showing that they may pose a threat to your rental, neighbors, or anyone else, you may turn them down as long as you use the same qualifiers for everyone.
  • Rent versus income ratio – If your applicant does not make enough money at their current employment position to adequately cover the debts they owe and rent every month, they are not a good choice for you. Many landlords require that the applicant make at least three times the monthly rent.
  • Prior evictions – A rental applicant that has been evicted before may not be someone you want to immediately welcome into your rental.
  • Too many people wanting to move in – You are allowed to put reasonable limits on how many people may live in the rental unit as long as those limits don’t cause you to discriminate against families.

In the end, you have a lot of flexibility in what you can use to choose to deny an applicant as long as you are not discriminating against a class protected by the Fair Housing Act.

What Can Happen If You Do Not Provide What is Required?

You will want to make sure that you follow the letter of the law, both federal and local. This may take some extra work, but it’s worth it.

If you miss a step or are found acting contrary to the law, you may open yourself up to a lawsuit, which will cost you in time, money, and stress.

If you lose that lawsuit, you may be on the hook for the tenant’s legal fees as well.

 

What Should an Adverse Action Notice Look Like?

LandlordStation has put together a sample of what your Adverse Action Notice should look like if the report is run through our site. You may also download a copy here.

 

Adverse Action Notice Sample

 

Dear [applicant’s name],

 

This letter is to inform you that your application to rent [insert property address here] has not met the standards that we have set for the rental property. Because of this we are

 

[   ] Denying your application

[   ] Requesting the following additional conditions to be met

 

Additional conditions: ___________________________________________________________________________________________________________________________

 

This descision was made due to the following information found on your consumer report:

_____________________________________________________________________________________________________________________________________________

 

The CRA (Consumer Reporting Agency) that this information was provided by is TransUnion. Their contact information is:

 

2 Baldwin Place, P.O. Box 1000

Chester, PA 19022-20000

1-800-888-4213

www.transunion.com/myoptions

 

In compliance with the Fair Credit Reporting Act, you have a right to obtain a copy of your Consumer Report through the agency from which it was provided within the next sixty (60) days following the date that you receive this letter. You may address a letter requesting this information or call the CRA listed above for this information. Under the Fair Credit Reporting Act you have a right to dispute any information that you believe is erroneous or incomplete. Please note that neither the CRA nor LandlordStation were involved in the final decision regarding your application, nor can they explain why this adverse action was taken.

 

Landlord (print): _____________________________________________ 

Signature: _________________________________________

Date: ________________________________