How to Best Choose Tenant from Multiple Qualified Applicants (rentals, credit, house)
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IJust to give a little background on who I am: I'm a licensed REALTOR in the state of Maryland, and I am also a landlord- I own a rental apartment in Washington DC, and also rent out a room in my home in Maryland.
Have you read the thread about the 'cash rich' couple trying to rent in DC? Maybe you can give them some insight as to why they are having such a hard time finding a rental.
Chiming in late but this weekend I went to a prospective place. The agent here was taking multiple applications and money. I had my application but saw she already had 3, so I asked her "how is this working, are you taking the fees but if you don't choose us you give the money back? Are you checking in order?"
She said no, and that they were going to check all the credit scores (yeah right) and then make a decision. I said no thanks and left. She could get 10 applications, check the first one she likes, give them the okay, and pocket the rest of the money!
She could get 10 applications, check the first one she likes, give them the okay, and pocket the rest of the money!
Some states have passed regulations that govern application fees. It's always in a consumers best nterest to know how much can be charged (some have legal limits), what conditions will cause the fee to be nonrefundable and what conditions will cause the fee to be refundable.
Chiming in late but this weekend I went to a prospective place. The agent here was taking multiple applications and money. I had my application but saw she already had 3, so I asked her "how is this working, are you taking the fees but if you don't choose us you give the money back? Are you checking in order?"
She said no, and that they were going to check all the credit scores (yeah right) and then make a decision. I said no thanks and left. She could get 10 applications, check the first one she likes, give them the okay, and pocket the rest of the money!
She would be pretty stupid to pocket the money. I never used to charge a BG fee but I do now simply because times changed. I wish I could go back to a handshake and a one oage lease but that's not happening
Whatever the case, I don't like that practice, it's shady. I don't know if it's legal, it just makes me uneasy. Which is why I didn't go through with it.
If you get 10 applications, you timestamp them, you check the first one, if they pass, that's it, you don't go on to the 2nd, 3rd, 4th, 5th... Because if they all pass how do you choose then? Then it starts to become biased and not a numbers game. And how do I know she really checked? I have no proof that she didn't pocket my money and I doubt she'll give me a copy of my report.
I've called places and been told "we already have accepted an application, if they do not pass we will call and see if you are still interested" which IMO is the best approach to renting a unit.
I didn't make a stink about it, I just said thanks and left, IMO I'm not gonna fall over myself to rent a place. I thought it was crazy how the people ahead of me were acting.
Say you put your unit up for rent and you get multiple suitable applicants (ie. everything checks out, they are all perfect tenents etc etc.)
How do you choose which applicant gets the unit? Knowing full well the laws which doesn't allow a landlord to discriminate between applicants based on multiple criteria (race, sex, marital status etc),
..........
In the first place, you will never receive dozens of applications from multiple perfect tenants. It never happens. So you can stop worrying about that.
To protect yourself have a detailed written criteria that you apply evenly to each and every applicant. Make sure there is nothing in your criteria that violates fair housing or disability laws.
If you make that written criteria available for every applicant to read, you will cut down on the number of applicants that waste your time. In some states, it is the law to have that written criteria posted. You had better know your own state's laws about tenants.
In the event that you do receive two applications from very qualified people, you can have a deal breaker in your written criteria. Something like "If two applicants are equally qualified, the unit goes to the applicant with the highest credit score". Obviously, the deal breaker has to be something legal. You can't use the number of children as the deal breaker, or the religion of the applicant.
I suggest that you write the reason for rejecting on every rejected application and hang onto all of them for at least a year. Personally, I never throw any of them away. You write "bad credit", "Bad LL reference". "lie on application" or whatever the reasons was for rejecting. Then save all of them until the possibility for a fair housing complaint has passed.
Say you put your unit up for rent and you get multiple suitable applicants (ie. everything checks out, they are all perfect tenents etc etc.)
How do you choose which applicant gets the unit? Knowing full well the laws which doesn't allow a landlord to discriminate between applicants based on multiple criteria (race, sex, marital status etc), how do you ensure you make a fair choice and what would you tell the remaining applicants why they were rejected to make sure you don't get sued.
Just trying not to get wrongfully sued here ....
Who ever gave you the application first; I thought this was a commonly known selection method.
I am joining in on this very late but cant find the answer to my question anywhere. I recently put in an application for a rental house. And after 4 days of not hearing if we had been accepted I contacted the property manager to find out the status of my application. He told me the move in date had to be moved out a month (he said the home owners had a change in military orders) and that there was another application in on the property. When I asked if it would go to the first approved applicant he said it was going to come down to who was willing to pay more and stay the longest. They already ran my credit and charged me the $40 for the application fee. I didnt think it was possible to get in a biding war on a rental house! I personally feel like this is bad business but I am just trying to find out if its legal.
(((((((((.......... They already ran my credit and charged me the $40 for the application fee. I didnt think it was possible to get in a biding war on a rental house! I personally feel like this is bad business but I am just trying to find out if its legal....)))))))
It's legal. You don't have a contract with a start date. The landlord can pick the best qualified applicant. They've already processed your application, which is what your $40 was for so you've gotten your money's worth from the application fee. The $40 is not to guarantee you a place.
I don't feel it was handled well. Everyone should have been called to inform them of the change in the start date. With only two applicants, you might still be the best choice. You haven't been denied.
As for bidding wars, they do happen. I won't do it, but there is no law against it.
Next time I suggest that you ask about rental criteria before you apply.
State specific to oregon, fees can't be taken unless there is a vacancy unless the applicant agrees to be on a wait list. I have no idea how a judge would see this in oregon. There was a vacancy at the time e the fee was paid a d the screening and credit report were run. I'm glad I don't have to sort this one out.
Chiming in late but this weekend I went to a prospective place. The agent here was taking multiple applications and money. I had my application but saw she already had 3, so I asked her "how is this working, are you taking the fees but if you don't choose us you give the money back? Are you checking in order?"
She said no, and that they were going to check all the credit scores (yeah right) and then make a decision. I said no thanks and left. She could get 10 applications, check the first one she likes, give them the okay, and pocket the rest of the money!
....
Whatever the case, I don't like that practice, it's shady. I don't know if it's legal, it just makes me uneasy. Which is why I didn't go through with it.
At this point in our lives, my husband and I have found ourselves in the unique position of being both landlord and tenant.
AS A TENANT...
This has been my recent experience. Management companies handle the nicer rentals in my So. Cal community and a $40 application fee per adult ($80 per couple) is standard operating procedure here. The companies legitimately use the fee, run either a soft or hard credit check depending on the company, and the fee is non-refundable regardless of outcome. All prospective tenants are offered a copy of their credit report for up to $5 per report ($10 per couple).
When my husband and I were looking for a house to rent, we discovered that all the good quality homes in nice neighborhoods were listed with these 3 agencies in our small suburb north of Los Angeles. Even if I saw the listing on craigslist or realtor.com, it would direct me to one of the 3 agencies. Each owner handled things a little differently through their respective agency. Some owners used the agency as a tenant screening service only then dealt with the tenant directly, some owners had the agency do everything and after approval continue to have no contact with the tenants at all. It depends on the property, the owner's preferences, and what services the owner is willing to pay the agency for. At our level, most of the owners used the agency for screening, drawing up & signing the lease (through Docusign), and collecting first month's rent and security deposit, then the owner deals with the renter directly once they've been approved.
We paid fees to all 3 agencies because the rental market here is very tight. We paid $40 per person, per agency for a total of $240 in credit check fees. And I got copies of my credit reports from all 3 agencies, so I know they used our fees the way they were intended. Two agencies gave me our reports for free, one agency charged us $5 per report ($10 total for us as a couple). Two of the agencies ran a hard credit check (the kind that lowers your score a few points per inquiry) and one ran a soft credit check (doesn't affect your credit score). All 3 ran background checks. They agencies told me up front they would only accept applicants with a minimum credit score of 600, no criminal history and no evictions.
We had the misfortune of looking for a rental in May/June right at the beginning of summer when rentals are scarce because anyone with school-aged children is looking to move during the summer. All the desirable houses had 8-12 applications within the first 2 days on an agency's website. Each agency handled how they approved applications a little differently. Two of the agencies took applications over a 1 week period, then allowed the owner to review the applications and choose which one they wanted to run first, but the agency would only run one credit check at a time. If that person wasn't accepted for any (non-discriminatory) reason, the agency would call and tell them why, then move onto the next applicant until the owner found an applicant they liked. Leases here are typically 1 year, but I've seen individual owner/managers who prefer 2 year leases. Offering to sign a 2 year lease makes an application more desirable here. The agency we ultimately rented our house through had a first come, first served policy. They run applications and credit checks one at a time in the order received, and either approve or reject that application before moving onto the next one. We were lucky enough to be the first application and they approved us. If we had been 2nd, we would have lost out on this house. In fact, we lost out on several houses for that reason.
Once they run your credit, all 3 agencies keep it on file for 3 months in case there is another house that comes up in their database that you're interested in, then they don't have to run your credit again with another owner and the process goes much faster. So if you lose out on one house, another one could be listed on their website in a few days or a week that you could be approved for because you had the advantage of already being in their system, being first to see the property, and being first to apply for that newly listed house.
We started looking for a place to rent when we put our house on the market. The housing market here for both sales and rentals is so hot and so tight that our house sold within 2 days. We had a little over a month to find a place to rent. It got down to the wire for us and we were approved for our rental 1 week before escrow closed on our house.
AS A LANDLORD...
On the other side of the equation as a landlord, 2 years ago I charged a $35 fee to run a credit check on the current tenants that occupy our condo. When our condo was up for rent in the past, I took applications and reviewed each one, not necessarily in order, but I only asked for the $35 fee from the tenant I was close to approving and wanted to run a credit check on. I've never had to deny an applicant for anything I found in their credit report because I usually screened carefully enough before I asked for that $35 credit check fee. That is what it cost me for the service through Westsiderentals.com, one of the places I use to list our condo for rent. I've also used craigslist and rent.net, but run the credit check through Westsiderentals because I paid the fee to become an approved landlord who can run credit checks through their site. They sent an inspector to my home to check our set up and to make sure we followed all of their security criteria. In the past, before our current tenants, I have waived the $35 credit check if the prospective tenant had a current copy of their credit report. Fortunately, I was never burned doing this, but I will no longer allow that in the future.
Thanks to the information on this site, there are a lot of things I will do differently if I ever need to put our condo up for rent again.
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