A proper rental application process helps landlords prequalify prospective tenants and make the best and most informed decision faster.
For landlords, a proper rental application process helps them prequalify prospective tenants and make the best and most informed decision faster. This is vital if they want to get the best tenants into their properties and minimize vacancies.
They also serve as helpful documentation and proof of the screening process was done in full compliance with the law taking into regards the Fair Housing act. A good rental application can then help protect landlords in the event of a lawsuit.
For tenants, a rental application gives them confidence in the landlord’s professionalism and confidence in whether or not they have efficiently thrown their hat into the ring, as it were. Tenants should be wary of landlords who don’t use rental applications; you want to know all the right steps are being taken when filling a vacancy.
A quick note before we get started is that rental applications are only as good as the follow-up process. It’s no good collecting and sorting through rental applications if you don’t quickly and efficiently follow up with the best prospects.
This is why we’ve put together this Detailed Guide on How to Screen Tenants as a DIY Landlord.
Landlords can charge a small fee to cover their tenant screening costs. In general, a tenant screening report costs between $30 and $50.
A rental applicant shouldn’t be charged a fee unless they are seriously being considered as a potential prospect. You can run a tenant screening report from the Landlord Studio app which costs the tenant $35. This is the fee people are talking about when referencing rental application fees.
The amount you can legally charge a tenant for their tenant application varies from state to state. For example, the maximum you are allowed to charge a tenant as of 2019 in New York is $20. In California, the maximum screening fee you can charge is $50.94 per applicant as of 2019.
A rental application serves as a helpful document for landlords to show that you have carefully and thoroughly looked into all prospects allowing you to choose the best-qualified prospect. You can feel good when signing a lease with your tenant that they will pay rent on time and in full as well as have confidence that they will look after your property.
At the same time, you will have proof to support your decision-making process. An applicant can sue a landlord if they feel their application has been wrongfully denied, so it’s better to be safe than sorry.
Rental applications are a demonstration of a good work ethic and it’s the first step toward becoming a successful landlord.
A rental application is a form that allows landlords to screen potential tenants to determine if they are a good fit for a property by asking for a variety of personal information. Rental applications are a vital first step that a landlord must take before following through with a lease agreement.
A well-designed, detailed form is a valuable tool that consolidates basic information about a potential tenant and streamlines the rental process for both parties. A rental application should be complete with a signature line to obtain consent for the landlord to run a credit check, background check, or other verification processes on the applicant.
A valid rental application ensures equality in the screening process, provided that the same form is distributed to all prospective tenants. This is critical in adhering to the Federal Fair Housing Act.
The Federal Fair Housing Act prohibits discrimination based on race, skin color, nationality, religious preference, gender, age, family status, or disability.
NOTE: In the state of California, landlords are also restricted from asking questions regarding immigration or citizenship status on the rental application.
Below we detail what should be included and why in an all-encompassing rental application form.
All potential tenants should be asked to fill out an application fully after viewing the property if they wish to go ahead. If they do leave elements blank you should investigate further the reason for this.
At the time of the application, the landlord should request information about anyone else who will be sharing the property with the primary resident.
Personally, I like to get every potential tenant over the age of 18 to fill out their own application even if they are applying as a group, and run each applicant through my screening process. But at the very least, at the time of the application, you want to get the names and details of the relationship to the primary applicant of every potential roommate.
This information helps a landlord determine if occupancy regulations are being followed in the unit. In the state of California, the generally accepted limits of occupancy are two people per bedroom, plus one additional tenant.
If an applicant has children, they are not required to list their names in this section of the rental application. The Federal Fair Housing Act prohibits discrimination against renters with children. Listing their names in this section could unwillingly introduce bias against the applicant and ultimately lead to a violation of federal law.
Landlords should ask detailed questions about a tenant’s rental history and their relationship with their prior landlord.
The rental history portion of the rental application should request the following information:
By obtaining this information, landlords can contact previous residences to determine whether or not the tenant caused significant damage to that landlord’s property, filed any lawsuits against them, paid rent on time, was subject to frequent complaints from neighbors, abided by the terms of the lease, and their smoking status.
As a landlord, it is your right to determine whether an applicant has the wherewithal and resources to pay rent on time and in full every month. Normally you should only consider tenants that have a monthly income equal to at the very least twice the monthly rent. In general, we look for three times the rent in income.
Landlords will want to request the following information:
Financial and employment information that is incomplete without explanation, employment history that shows numerous job changes, gaps in their employment history, or a gross monthly income less than your required minimum all possible red flags to renting to a particular tenant.
Due to the additional wear and tear that comes with allowing pets in a rental, as well as the potential increased noise, landlords are well within their rights to restrict pets, with the exception of service animals.
A landlord may choose to:
If a landlord decides to allow pets in their rental unit, they may require the tenant to sign a written pet policy. They may also collect a pet deposit or charge monthly pet rent.
On a rental application, a landlord should ask if the tenant has pets, and if so, what type of animal it is, what breed it is, and how much it weighs.
In this section, the tenant provides all basic personal information that would be required to verify their identity. When designing this section of a rental application, the landlord must be careful to adhere to the Federal Fair Housing Act and state of California regulations pertaining to housing discrimination.
The following pieces of personal information are legal to be requested of the prospective renter:
Asking directly for an applicant’s age is a violation of the Federal Fair Housing Act.
The applicant’s signature is one of the most vital sections of the rental application. Without the applicant’s signature, the information collected may only be of limited use. The rental application clearly states what the applicant’s signature represents.
When a prospective tenant signs a rental application, it should be understood that they consent to the following:
While many rental applications look similar from state to state, each state has its own set of tenant screening laws that may influence the details of an application. In California, there are several regulations that must be considered when a landlord devises a rental application for potential tenants.
To avoid these complications we recommend running your tenant screening report through the Landlord Studio app. The tenant pays the tenant screening company directly – you also don’t need to handle any sensitive data like their SSN.
Thanks for reading and we hope you found this blog interesting! However, do note that the purposes of this article are for general information. We are not licensed financial or legal professionals and as such nothing in this article should be understood to be financial or legal advice. If you require financial or legal assistance please seek the help of a competent professional.