How should I choose between multiple qualified applicants?
While many owners struggle to find qualified tenants for their property, a distinct few may be fortunate enough to have multiple applicants willing to rent their unit. While almost all owners would agree, having multiple qualified potential tenants is a good problem to have; many owners don’t know the exact protocol to follow in order to comply with the Fair Housing Act.
So you have multiple applicants willing to rent your property, what is the first step in order to determine who to rent the property to? First of all, you must create a qualification criteria and apply it equally to all potential tenants. This may be a minimum credit score and minimum income requirement that you will require from your tenants. In addition, you may require documentation of rental payment, as well as one positive reference from a past landlord. The most important aspect is creating a standard and applying this to all applicants.
What if multiple candidates exceed the minimum qualification requirements? In the event that multiple applicants exceed the criteria you have set, you will need to create a fair method to determine the tenant you choose. An example would be selecting the tenant that exceeds the qualification requirements the most. This may be the tenant with the highest credit score, longest documentation of timely rental payments, and/or the most positive references from past landlords. Another example would be selecting the first qualified tenant that was interested in the unit. While there are pros and cons to each, whichever method you choose, be sure to remain consistent and apply to all properties you rent.
Once you determine which applicant you would like to enter into a lease agreement with, be sure to provide written notice to all other applicants. This should include the reason for not renting the unit to the applicant. As long as the reason for denial is not correlated with the applicant’s status in a protected class, you should be in compliance of the Fair Housing Act. In the event it was based on information contained in the applicant’s credit report, you must state this as notice of the denial per the Fair Credit Reporting Act.
The Fair Housing Act can be very confusing and a costly mistake if an owner does not comply. If you would like to learn more about the Fair Housing Act or if you would like assistance in managing your investment, please consider hiring FRE Property Management. We are the premier property management company in Utah and will provide the peace of mind knowing that your investment will be taken care of. Contact us today at 801-673-5692.