Landlord's Rights to Refuse Rental
Landlords have the right to pick and choose their tenants, providing that their tenant selection process isn't discriminatory. The reasons why a landlord may approve or deny a rental application vary, but usually come down to concerns about an applicant's personal history or financial situation. However, a landlord must be able to show that she used sound business principles in developing her rental criteria. If she can't do this, she risks a discrimination lawsuit.
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Landlord's Right to Make Business Decisions
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Landlords face a number of risks, including the possibility that a tenant won't pay her rent, or that the tenant may cause significant damage to the rental property. In addition, evicting a tenant can take a considerable amount of time in many states, during which the landlord may not receive any rent, even though she still must pay the mortgage and for the building's upkeep. State landlord and tenant laws, as well as federal housing laws, provide for a landlord's right to set a screening process for rental applications. Providing that the screening process reflects sound business principles, she can decline rental applications as she sees fit.
Tenant History
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Many landlords request a tenant's permission to run a background or credit check as part of the rental application process. While there are no standard criteria for rental application approval, many landlords are concerned when they see a history of bad debt, late payments, evictions or criminal background. In some cases, landlords are willing to be flexible if the applicant can explain their circumstances and can offer some kind of assurance of future good behavior. For example, a tenant may have a bad credit history but can also provide good references from previous landlords who can all attest to the tenant's ability to pay his rent on time.
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Financial Concerns
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In addition to concerns about a tenant's credit history or previous evictions, many landlords try to determine whether a potential tenant can realistically afford the rent. The landlord may ask to see recent pay stubs or call the applicant's employer to verify the applicant's salary. A landlord may also examine the tenant's credit report to determine how much the tenant is paying each month under credit cards and other debts. Some landlords will not rent to an applicant if the rent is higher than 33 percent of the tenant's take-home pay.
Discrimination
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Federal law makes it illegal for landlord to deny housing application because of the applicant's race, nationality, religion, marital/family status, disability or gender. In some areas, additional anti-discrimination protections exist. For example, in some places it is illegal to refuse to rent to someone because of their sexual orientation. Landlords may choose to not rent to an individual tenant who falls into one of these protected categories because of financial or background issues, but should be prepared to demonstrate the business reasons for the rejection.
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