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The Legal Blog, brought to you by NVAR's Professional Standards department, helps you stay on top of the latest rules and regulations in the industry.

Understand the Limits of a Prospective Landlord's Right to Know

By:
  • Nisha Thakker
May 1, 2017

Application guidelines must be followed consistently, applied to all applicants

This article was edited on June 7, 2017.

Q:
  I’m working with a landlord who has set an acceptable credit score range for applicants. One of the applicants was well within the range, and the landlord asked me to run a criminal background check as well. The background check revealed that the applicant has a criminal past but the specific type of criminal charge. Can I reject the applicant based on this information?

A: If you are representing a landlord in a rental transaction, you should work with the landlord to create written policies that are applicable to all applicants. If you intend to run a criminal background check on one applicant, you must run one on all applicants and notify them that they will be subject to a background check. Here are some considerations when referring to criminal background checks in rental applications:  

1.    You may never consider arrest records, only convictions.
2.    Limit your “look-back period” to 7-10 years. Again, make sure to have a written policy outlining your look-back period.
3.    People who have been convicted of crimes that affect the safety of people and/or housing may be denied on that basis.
4.    If possible, fall back on denying applicants based on their credit score or history rather than the criminal history.
 
And remember, even though individuals with criminal record histories are not in a protected class, you may face other claims of discrimination if you don’t have equally applied policies.

Q: I have an Exclusive Right to Lease agreement with a landlord. To vet applicants, we have them complete an online credit and background check on www.xyztenantscreen.com. A prospective tenant completed the questionnaire, and it turns out she has a very low credit score. The landlord instructed me to decline her application based on her score. Besides telling her that she has been rejected based on her poor credit history, do I have to give her any other notices?

A: If you’re denying an applicant based on credit history, you must provide an Adverse Action Notice. This notice must include: the name, address and telephone number of the entity that supplied the consumer report, including a toll-free telephone number for reporting agencies that maintain files nationwide; a statement that the entity that supplied the report did not make the decision to take the adverse action and cannot give the specific reasons for it; and a notice of the individual's right to dispute the accuracy or completeness of any information the credit reporting agency furnished, and the consumer's right to a free report from the agency upon request within 60 days.

Q:  The landlord I’m working with asked me to provide all of the applications we’ve received in their entirety, including credit reports. Is that something I can do?

A:
 The application may only be provided to the landlord with the applicant's written permission, although it is not a recommended practice. Additionally, the credit report or credit score may NEVER be provided. The landlord hired you to do the screening based on a written set of policies. Should the landlord persist, you may provide him or her with portions of the application that are relevant to the applicant’s worthiness as a tenant. This would include the applicant’s history as a tenant and employment verification.


Q: The landlord I represent is requiring that all applicants provide to her a photocopy of federal- or state-issued identification that includes a picture. Is that permissible?

A: This question raises two issues. The first is that it is a violation of federal law to photocopy federal credentials. As a real estate licensee, you may ask to see the credentials and jot down the relevant information to verify identity, but you cannot make a copy. The second issue relates to fair housing. We strongly recommend that you do not provide landlords with copies of applicants’ photo IDs. While there is no law preventing you from doing this, it could raise fair housing flags. When representing a landlord, your role is to find the most qualified applicant based on written criteria provided by the landlord. The applicant’s name and likeness are not relevant to the decision making process.
Group(s):
  • Real Estate Laws
  • Risk Reduction