Lease Denial Letter Information
A Denial Letter is a formal way of informing a potential tenant that their application or tenancy has been denied. It is important to send a denial letter in the proper manner and ensuring all requirements are met. As long as your reasons for denying tenancy are fair and legitimate, you can deny any of the applicants.
Some of the most common reasons to deny an applicant tenancy include inadequate income, lack of employment information, untrue or false statements on the tenant’s application, missing certain documents such as, pay stubs, bank statements, ID cards, rental history, and unacceptable credit history. With regards to inadequate income, typically, rent should be about a third of the tenant’s monthly salary. If the rent is higher than a third, it may be a reason to deny the applicant. One of the more important aspects of a tenant’s application is their credit score, which helps the Landlord determine the potential tenant’s financial responsibility.
If a landlord denies an applicant due to their credit score, under the Fair Credit Reporting Act (FCRA), it is possible for the applicant dispute certain information found on their credit report that the Landlord used to reach a determination. Therefore, it is important to provide the applicant in the denial letter which credit agency was used to obtain the credit report. The applicant can then request a free copy of their report within 60 days and may contact the property owner with further information.
The FCRA is an act that helps consumers understand how their credit information is being used in certain decision-making processes and giving them access to that information. Therefore, it is vital for a landlord to include in the denial letter which credit reporting agency was used, as well as information about the act, FCRA.
There are also certain reasons that can NOT be used to justify denying an applicant tenancy. Under the Fair Housing Act, a rental application cannot be denied and a denial letter cannot be sent on the basis of: race, color, national origin, religion, sex, age, familial status or disability. In addition, a landlord cannot deny tenancy based on an applicant’s criminal record, unless the convictions include dangerous crimes that may put other tenants, or the property, at risk. For example, a DUI conviction is not a reason to deny tenancy, however being convicted of gun possession may be.