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Old 06-29-2015, 06:42 PM
 
Location: North Idaho
32,503 posts, read 47,500,455 times
Reputation: 77808

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Quote:
Originally Posted by bentlebee View Post
........Over here and I believe else where as well the law is clear that after a denial the tenant is entitled to the credit report and if they don't receive it they can sue you ........
I know that in California a copy of the credit report must be given, if a credit report was run. In the majority of states, the applicant doesn't get an actual credit report directly from the landlord. The applicant gets a rejection letter stating that the credit report was the reason for rejection. With that letter they can order a free copy of that credit report. That's the way that the federal law reads.

I've had an applicant accepted until they showed up to sign the papers with their "long haired border collie" that looked just like a muscle bound, big, short haired, pitbull. He was mad and wanted his money back or a copy of the credit report. I told him he wasn't getting a refund and if he wanted a copy of his credit report, I had to notify the credit company that he'd been rejected for poor credit and they would put that on his record and send him the rejection letter.

He didn't get rejected becasue of his credit report. He was rejected for lying about the dog. He decided he didn't want me to report him to the credit agency as rejected for bad credit. he didn't get a refund or a copy of his credit report.

Nothing in Oregon law says that a credit report must be run. I'd be surprised if the law in any state says that a credit report must be run. I talk to landlords all over the country and not one of them has ever said that they are required by law to run a credit report.
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Old 06-29-2015, 07:34 PM
 
3,461 posts, read 4,659,286 times
Reputation: 4032
Here is some info regarding collecting application fees and which states have laws regarding the collection of application fees. But the rest should just be common sense about being fair and honest in 'all' states. Some of the posters statements/comments on this thread are clearly collecting the fees for profit. No one is going to do actual administrative background checks or run credit reports on hundreds of people for one apt. If there is any minute possibility that that is happening then there is clearly a problem with your screening process overall. I am not talking about receiving hundreds of applications because I know that is possible. I am talking about actually doing background checks on the hundreds you do receive.

Even if there is not a clear cut 'law' regarding collecting application fees specifically in your state, I doubt, if challenged, that a judge would not question your practices and/or see right through it that it is being done strictly for profit only and would prosecute accordingly.

This sums it up best in the article:
The Best Landlord Guide to Charging Rental Application Fees
In typical “it takes one to ruin it for the rest” fashion, landlords who charge an application fee under the premise that it will cover the cost of the background check, but never intend to run the background check will find themselves in trouble. Application fees are not intended to be for-profit and should never be seen as a source of revenue. Nothing screams fraud like charging for something that you shouldn’t and tenants will quickly feel alienated. Being fair and honest about the screening process and the charges associated is best-practice for any landlord.

Be Fair
A common misconception is that you must charge what you’re paying for their background check. While obviously this number should be relative, there is nothing wrong with figuring in your time and energy as an expense as well. So if the tenant screening cost on that applicant is $25, it is perfectly acceptable to charge $30, accounting for the additional $5 as a processing or administration fee.
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Old 06-29-2015, 09:23 PM
 
27,206 posts, read 46,557,818 times
Reputation: 15661
Quote:
Originally Posted by oregonwoodsmoke View Post
I know that in California a copy of the credit report must be given, if a credit report was run. In the majority of states, the applicant doesn't get an actual credit report directly from the landlord. The applicant gets a rejection letter stating that the credit report was the reason for rejection. With that letter they can order a free copy of that credit report. That's the way that the federal law reads.

I've had an applicant accepted until they showed up to sign the papers with their "long haired border collie" that looked just like a muscle bound, big, short haired, pitbull. He was mad and wanted his money back or a copy of the credit report. I told him he wasn't getting a refund and if he wanted a copy of his credit report, I had to notify the credit company that he'd been rejected for poor credit and they would put that on his record and send him the rejection letter.

He didn't get rejected becasue of his credit report. He was rejected for lying about the dog. He decided he didn't want me to report him to the credit agency as rejected for bad credit. he didn't get a refund or a copy of his credit report.

Nothing in Oregon law says that a credit report must be run. I'd be surprised if the law in any state says that a credit report must be run. I talk to landlords all over the country and not one of them has ever said that they are required by law to run a credit report.
I'm not saying you have to run a credit report but it is risky to deny a tenant for just a reason as we are getting lawyers news letter warning for things that can cause legal issues.

The safest way is to deny them based on the credit report unless of course they deny of the breed of the dog but we ask for pictures and proof of breed and still have been fooled in the past but they moved out pretty fast from the rental when we found out after complains to the county that their Pitt bull had bitten the neighbor and we don't rent to tenants with Pitt bulls.

If a tenants has a complaint about something on their credit report they can take it up with the bureau.
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Old 06-29-2015, 10:35 PM
 
3,461 posts, read 4,659,286 times
Reputation: 4032
Quote:
Originally Posted by oregonwoodsmoke View Post
Unfortunately, a lot of hopeful tenants seem to have comprehension problems. You can put it in the ad, you can show them your written criteria, you can tell them that you don't accept whatever, and they will still insist upon applying.

Like the group of five who were all standing in the driveway and smoking when I arrived to show the house. The ad says no smoking, the written criteria, which they were given, says no smoking, the application form says no smoking, and I told them several times that the owner of the house would not accept a smoker.

They insisted upon applying because they were sure it would be OK. They all dropped cigarette butts onto my driveway. I figure the $125 they gave me was a stupid tax. When I told them their application was denied, they asked why. I replied that no smoking was allowed and they said "oh."
You already knew flat out that they didn't qualify based on the answer above that you gave them so why in the world would you even allow them to submit an application and pay the fee? There is no reason for you to collect $125 no matter how many times the person insists they want to apply. And $125?? Why so much? If it was something you discovered once you did a background/credit check that would make more sense but you knew the minute you met them they didn't qualify so why not tell them that right away and forbid to take the application/fee? And your 'stupid tax' doesn't cut it and I am sure a judge would agree.

Quote:
Originally Posted by oregonwoodsmoke View Post
I've got an ad running right now that clearly says the tenant must do A and B. I tell them that on the phone. They ask what A involves because they don't know how to do it, say they don't have B and then want to make an appointment to see the house and fill out an application.

They show up and I tell them that the tenant must have A and B and they tell me that they don't and they still apply.

I don't know how much clearer that I can be than to say they don't meet the requirements, but they are absolutely certain that I don't know what I am talking about.
And here again, you already knew they didn't qualify upfront. You don't just collect application fees just because someone insists. And no one was forcing you to take an application for either of the reasons you mentioned in your post nor is it discrimination in either case. They were both part of your initial screening process so you stop there and just tell them flat out they are denied without taking an application and a fee.

This is renting 101 and in both of these situations you are doing nothing but taking advantage of people whether they insist or not. They were already disqualified BEFORE you took an application so why accept one?! Next time why don't you just tell applicants like this that you are charging them for your advice/opinion upfront because that is all you were ultimately doing anyway. How unethical can you get?
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Old 07-06-2015, 06:21 PM
 
3,461 posts, read 4,659,286 times
Reputation: 4032
Quote:
Originally Posted by bentlebee View Post
And you keep the money after checking the public records and court records?

Over here and I believe else where as well the law is clear that after a denial the tenant is entitled to the credit report and if they don't receive it they can sue you as someone tried to do by saying so and we checked it out and she was right but we already had submitted the credit report to her so we weren't wrong in anything and this was probably one of the people who like to get free money by just going after companies IF they wouldn't handle it correctly.

Of course you have the ones who will bring up race but that is difficult to with our company as we have so many different backgrounds for our tenants with different race, religions, and we never made an issue about being married or not regardless of sex, etc.

But we clearly see a shift of tenants who will go and try to the legal right if you won't rent to them and we always tell them that starting to be difficult even before renting is not a sign of being the right tenant and we will move on. That's called "saved by the bell".
Sorry bentlebee. I somehow missed this post.

We don't charge application fees. It is part of business and can be written off (to an extent) and as I mentioned, because of the way we handle our screening we don't need to run but 1 or 2 credit checks (usually) after they have passed the initial screening based on their application, income, court records and rental reference. If they don't pass that part we don't order credit checks. We process applications one-by-one, first come, first served basis on down the line.
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Old 07-06-2015, 10:38 PM
 
1,106 posts, read 3,521,714 times
Reputation: 832
Quote:
Originally Posted by sj08054 View Post
If it's not costing you $200 to screen a tenant and simply collect $200 as a way to collect profit, it's illegal.
If I charged tenants or customers what it cost me then I wouldn't make any money. You're only in business for one thing, and thats to make money. Also, everyone has a different value on what their time is worth.
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