Many landlords don’t have a written tenant selection plan. Other landlords who have taken the time to prepare one choose to treat it as an internal document, seen only by themselves or staff (if any), such as a manager. The best approach, however, is to create a written tenant selection plan and make it available to all applicants before they even apply for an apartment.
Letting applicants see your tenancy criteria is smart for customer relations as well as for lowering the chances of a misunderstanding that can lead to an argument or even a fair housing lawsuit. If applicants first learn about an aspect of your screening criteria from a rejection letter, they’re far more likely to get angry and question the legitimacy of their rejection. On the other hand, letting applicants discover your qualifications for tenancy up front removes any mystery, which helps streamline the screening process and lower your risk for liability.
Your tenant selection plan should be written in plain English. It does not need to be long or include legalese and formal language, since you want to communicate your selection criteria to applicants without any misunderstandings. When drafting a tenant selection plan for your rental property, aim to make the plan as clear and concise as possible.
Before you get started writing a written tenant selection plan, a good first step is to jot down all the criteria that you and your staff currently use to screen applicants. This means stating minimum requirements such as your income-to-rent ratio and minimum credit score, as well as indicating if you check an applicant’s employment history, rental payment history, credit report, and criminal background, and noting how such inquires affect an application.
In addition to outlining what you require of applicants, your tenant selection plan is a good place to communicate the fact that you follow all applicable fair housing laws and don’t engage in illegal discrimination. You can do this by including a short statement to this effect at the beginning of your plan. Also, include your state or local occupancy requirements (for example, up to two tenants per bedroom) and any other legal restrictions that you’re bound to follow when selecting tenants. This way, applicants will understand that the law may be to blame for a type of living arrangement they may seek at your rental property.
When applicants see your selection plan, they’ll know that you take tenant selection seriously and don’t choose tenants arbitrarily. They’ll also see exactly what your criteria are for tenancy. This way, appliants who knows they won’t fit your criteria can save themselves (and you) time by not applying. On the flip side, it means you’re more likely to get applicants that have a good chance of passing your screening requirements, since they’ve reviewed those requirements before deciding to apply.
Most importantly, giving your tenant selection plan to all applicants helps prevent an all-too-common situation where a rejected applicant angrily rushes to accuse the landlord of discrimination. If you reject an applicant for valid reasons, in accordance with the framework set up in your tenant selection plan, the applicant will have an uphill battle contesting your decision or proving that you violated fair housing laws.
Your tenant selection plan can become a liability trap if you let it get outdated. If you make a change to your policies (for example, you raise the minimum credit score or you begin to seek prior landlord references), promptly update your plan to reflect all revisions. This way, if a rejected applicant claims you acted unfairly, you won’t be in the difficult position of having to prove you followed your own policies despite what it may say in your tenant selection plan.
The Rental Applications and Tenant Screening section of Nolo.com includes several useful articles on a range of topics to help you find good tenants and evaluate applications legally. Also, check out Every Landlord’s Guide to Finding Great Tenants, by Janet Portman (Nolo), for detailed advice on how to attract, screen, and select the best tenants for your rental property.