Congratulations—your efforts have paid off! You’ve received applications from prospective renters, and while having multiple applicants may be a good sign, comparing applications can be tricky.
As you determine the best fit, it’s important to follow a consistent screening process and stay compliant with fair housing law and any local requirements. Otherwise, you may expose yourself to unnecessary risk.
Below, we’ve compiled a guide on how to choose between rental applicants to ensure you abide by your landlord rights and responsibilities throughout the selection process.
- Can landlords choose who to rent to?
- How to create a fair screening process
- Common mistakes when comparing rental applicants
- How to decline a rental application
- FAQs
Can Landlords Choose Who to Rent To?
Landlords have the right to choose the most qualified applicant as long as the decision is based on legitimate business reasons, such as sufficient income or credit score. The decision must also comply with fair housing laws.
The Fair Housing Act (FHA) protects rental applicants from discriminatory practices. As a landlord, you must abide by federal housing guidelines when selecting rental applicants. Based on your location, you may also be subject to state laws enforcing additional discrimination guidelines, such as protection for source of income or age.
According to the FHA, landlords cannot perform any of the following actions based on factors such as race, color, religion, sex, ethnic background, familial status, or disability:
- Terminate a lease
- Refuse to provide reasonable accommodations for renters with disabilities and/or service animals
- Falsely claim that a unit is unavailable
- Refuse to rent or show the property
- Set more restrictive screening standards for certain applicants, such as requiring a higher income
- Enforce different rules for certain tenants, like a stricter policy for late rent payments or fees
- Advertise a listing in a way that shows a preference for one specific group
How to Create a Fair Rental Screening Process
The only fair way to choose between multiple renters is through the applicant screening process. Doing so will ensure you select an applicant based on impartial, legitimate business reasons, such as insufficient income, poor credit score, or prior evictions.
Below, we outline the step-by-step process for creating a fair applicant screening.
Request an application
To be considered for a rental property, each applicant must complete an application that includes their contact information, current/previous employers, income, type and number of pets, if applicable, and employer/landlord references.
Comply with fair housing laws
Review fair housing guidelines to ensure your screening process does not discriminate. Throughout the selection process, use an FHA-compliant list of criteria to review applicants. Using a written list will help you maintain consistency and ensure compliance and equal evaluations for every applicant.
Run a background check
Running a background check will provide important information about your applicants. A thorough background check will cover an applicant’s rental history, financial stability, criminal record, and other relevant factors. This report will reveal a candidate’s potential red flags, such as prior evictions, criminal history, or legal battles.
Check criminal history
A criminal history check can help protect the safety of your property and community. Focus on relevant convictions (not arrest records) and follow fair housing guidance and local laws. Consult a qualified attorney for advice specific to your situation.
Review rental history
When choosing between applicants, contact each candidate’s landlord references to learn about their rental history. In doing so, you should inquire about the applicant’s past behaviors. Did they pay rent on time? In what condition did they leave the property? Did they abide by the lease agreement? All these questions will give you a good idea of what to expect from an applicant.
Sometimes, candidates will provide a landlord reference letter with their application. This letter essentially serves as an endorsement from their former landlord or property manager and can be used to help their application stand out. We recommend reaching out to landlord references even if your applicant provides a letter. Doing so can give you better clarification on their renter history.
Conduct a credit check
A full credit check should reveal everything you need to know about a candidate’s financial standings. Not only will the report disclose their credit score, but it will also reveal years of credit history.
Items to look out for when reviewing an applicant’s consumer or credit report are late payments, overcharges, maxed-out credit cards, significant loans, unpaid balances, or bankruptcies. Any of these red flags may indicate financial instability and could prompt you to reconsider the applicant.
Look at employment history
Employment history is another factor to consider when evaluating applicants. Not only will it help verify their income streams, but it will also indicate whether an applicant is a responsible individual. Has the applicant been fired in the past or been unemployed for an extended period? Take such matters into account when making your selection.
Request proof of income
When reviewing employment history, you should also request proof of income through bank statements, pay stubs, or offer letters. As a landlord, this will answer your main question: Can this applicant reasonably afford the rent? If not, then the applicant is immediately ineligible unless you’re willing to negotiate prices.
The typical income requirement for renting is triple the monthly rent, with the rent-to-income ratio (RTI) at 33%. This income can come solely from one renter or collectively from multiple occupants. This gold standard helps to ensure on-time, in-full payments from renters.
Common Mistakes When Comparing Rental Applicants
There’s a lot of room for error when choosing between rental applicants, and even small missteps can lead to a federal housing violation or other legal consequences. Whether you review applications out of order or fail to document your process, inconsistencies can be costly.
Below are some common mistakes to avoid when choosing between rental applicants.
Reviewing applications out of order
Evaluating applications out of the order they’re received isn’t illegal, but it’s often in a landlord’s best interest to process applications in order of receipt. Consider a first-come, first-served approach to help reduce the appearance of discrimination.
Your other option is to evaluate applications through a ranking system. While this is allowed, you must be careful when establishing your grading scale. Ranking factors must be the same for all applicants, particularly for those in protected categories under the FHA.
The ranking system must be solely based on legitimate business criteria, such as credit score, income, and rental history. If two applicants are equally qualified, it’s best practice to choose the applicant who applied first.
Regardless of the method you choose, avoid making promises to applicants about their chances of renting the property. Misleading potential tenants could cause legal problems if the applicant relies on your word and turns down other available rentals or, even worse, gives their current landlord a move-out notice.
Not accepting multiple applications
Receiving your first rental application is exciting, and it can be tempting to move quickly to fill a vacancy. As a sound business practice, consider accepting additional applications in case the first applicant doesn’t work out. For example, they may change their mind—or their screening report may reveal red flags.
Failing to document the screening process
Having proper documentation is necessary throughout the applicant selection process. Not only will this help you stay more organized, but it will also help immensely if an applicant accuses you of violating fair housing laws. Document your process from start to finish. Each time you approve an applicant, note the objective reasons for your decision.
If you contact prior landlords for references, record when you reached out and summarize what you learned—for example, whether the reference mentions late payments, noise complaints, or property damage. Clear documentation helps support your decision if an applicant questions the outcome or disputes a denial.
Following inconsistent policies
Consistency is key when selecting a rental applicant. Whether you use a first-come, first-served approach or a ranking scale, choose one method and apply it the same way each time.
Consistent management policies can help reduce the risk of FHA violations and support legal compliance. If an applicant questions a denial or files a discrimination claim, your documentation can help demonstrate that you applied the same screening criteria across all applicants.
How to Decline a Rental Application
Rejecting applications comes with the territory of property management. While rejection isn’t fun for either side, it’s necessary if you’re going to find the best-fit renter for your property.
Landlords have the right to decline a rental application if there are legitimate business reasons. Appropriate business reasons include:
- Insufficient income-to-rent ratio
- Low credit score
- Poor rental history, such as prior evictions, property damage, or unpaid rent
- Bad references from employers or landlords
- Owning a pet, in the case of a non-pet-friendly rental (exempt if the animal is a certified support animal under fair housing laws)
- Smoking habits, if the property has a no-smoking policy
If you decide to deny an application, it’s best practice to provide a rental application denial letter. In the letter, politely let the applicant know the unit is no longer available and thank them for their interest.
However, if you deny (or approve with conditions) an application based upon information you obtained from reviewing the applicant's consumer/credit report, the Fair Credit Reporting Act (FCRA) requires you to provide an adverse action notice.
To create an adverse action notice, required elements include:
- Date of the landlord's notification
- Property address
- The consumer reporting agency’s name, address, and phone number
- A statement that the consumer agency didn’t make the decision to deny their application
- Advisement that the applicant can request a free copy of the report (within 60 days of the landlord's notification date)
- Advisement that the applicant may dispute inaccuracies with the consumer agency
Comparison: Denial Letter vs. Adverse Action Notice
| Situation | Sample text to include (FCRA letters require more details as outlined above) | Simple denial letter? | FCRA adverse action notice? |
| Unit is no longer available | “We’ve moved forward with another applicant and the unit is no longer available.” | Yes | No |
| First-qualified / first received | “We reviewed applications in order of receipt and have proceeded with the first qualified applicant.” | Yes | No |
| Incomplete / unverifiable | “Missing pay stubs” or “Employment could not be verified.” | Yes | No |
| Doesn’t meet criteria (no consumer/credit report used) | “Your income is below our stated requirement based on documentation provided.” | Yes | No |
| Denied due to a consumer/credit report | “Credit report showed recent evictions/delinquencies/collections.” | No | Yes |
| Conditional approval due to a consumer/credit report | Co-signer/guarantor required, higher security deposit (where allowed), last month’s rent required, or prepayment requirement (where legal) because of report findings | No | Yes |
Screen and Select Applicants with Apartments.com
Receiving applications and screening renters is one of the biggest parts of managing a rental property. If you use Apartments.com’s comprehensive suite of Renter Tools, you can receive and review applications online, making the selection process easy for both parties.
Additionally, you can keep key screening details organized in one place and move qualified applicants forward faster. Plus, built-in screening tools help you apply consistent criteria across rental applicants, supporting a fair, well-documented process.
FAQs
Can you choose the first qualified rental applicant?
Yes. A common, defensible approach is first-qualified (sometimes described as “first-come, first-served”): review applications in the order received and approve the first applicant who meets your written screening criteria. The key is to apply the same criteria consistently and comply with Fair Housing and any state/local rules.
What if two rental applicants are equally qualified?
If two applicants meet your criteria and are genuinely comparable, many landlords choose the applicant whose complete application was received first. Another option is to use a pre-established tie-breaker that’s neutral and applied consistently (for example, first complete application, earliest move-in date that matches your availability, or another objective factor you’ve documented). Avoid “gut feel” tie-breakers.
How long should you keep rental applications and screening notes?
There isn’t one universal retention period because it can depend on state/local law and your business practices. As a general best practice, keep applications and screening notes at least 1–2 years after the decision (and longer if required locally or if there’s a dispute). Also keep any adverse action/denial notices and supporting documentation in the file.
Can you deny a rental applicant for an arrest record?
In general, an arrest record alone isn’t a reliable basis to deny an applicant because it doesn’t establish that the person committed a crime. Follow Fair Housing guidance and any state/local restrictions on criminal-history screening. When in doubt, use consistent, written criteria and consider getting legal guidance for your jurisdiction.
Originally published on January 28, 2021, by Jamia Kenan and has been updated.
