Why Landlords Need to Keep Records of Their Rejected Tenants
As a property owner you understand the importance of thoroughly screening your tenants to be prior to their occupying your premises. The good thing about properly screening a tenant is the fact that it can save you a great deal of trouble you may need to deal with in the future, this may include;
· Delayed payments on rent
· Criminal or illegal activities such as drug abuse
While you can never argue about the benefits of screening and gathering more information on your tenants, it all comes down to two choices; either you accept the tenants wishes or reject them. Accepting the tenant’s proposal has no much issue to worry about; rejections on the other hand, are what seem to cause problems to landlords later on.
Know your criteria of screening tenants
One thing for sure about the law is that it works both ways. As much as it allows the landlord to screen tenants prior to allowing them to occupy their property, it also protects the tenants to be from discriminatory rejection cases.
Normally, the property manager will check the credit status of the interested party; have a background check for criminal record, if he happens to have filed for bankruptcy and if he or she had eviction issues with the previous landlord and so on.
If you find reasons to red-flag the tenants to be screening test then you are legally accepted to reject the person’s application. For such a case you do not have to give the rejected tenant any reason for your decision but you should not forget write him/her a rejection letter.
If the rejected tenant feels that you were biased with your rejection, then he/she may decide to file a case of discrimination. If for some reason you were actually unfair then you might need to battle it out in court.
If you understand how the law works then you are aware that you cannot base your decisions in relation to race, religion, marital status, sexuality, and many other non determining factors to rejection.
How can you prepare for such cases?
How often do you really reject tenants from your property? Do you have genuine reasons for such rejections? These are some of the questions that can determine the direction of the ruling in case you find yourself in a courtroom.
What records should you keep and for how long?
In order to be on the safe side of the law, you will need to be very keen on the records especially on the rejected tenants. These records include;
· Credit history
· Past tenant behaviour
· Copies of bank statements
· Proof of income
By law you are allowed to freely use your screening pack just as the one listed above to make an informed renting decision. You will need to keep the records of list to improve your case argument in court. Normally, the amount of time one needs to store such information is about 3 to 7 years and it will vary with different states’ laws.
How to go about a discrimination claim
First, you need to provide a copy of the screening pack that you use to screen your potential tenants. The DFEH will have to analyze the criteria that you use including the minimum credit scores and the rest of information that you have. Without the rejected tenant’s record you can fail to prove that your decision was non-discriminatory by which you will lose the claim eventually. It is important that you safe guard all such records to avoid future claims that might cost you in the long run.
Better be Safe than Sorry
If you are serious about the letting business then you should understand the importance of record keeping. All records should be stored safely to a point where they can easily be retrieved when they are urgently needed.
It is best if you are just safe when such matter arises. In case you feel that there is a bit of complication of a similar situation you are trying to handle, you can always consult with a real estate attorney to get more information and how to best handle your case. Piece of Advice: If you are discriminatory in your decisions then you should avoid the renting business, just so you may avoid the suits.