How and When to Make Exceptions You may be tempted to make an exception for an applicant who is doing their best to recover financially, especially if the situation they were in was out of their control. It's a good idea to prepare for these situations ahead of time, by establishing conditional approval criteria. For instance, for applicants with no credit history, you may want to require extra security deposit (within the legal limit in your state, if any) or a guarantor. Or if your applicant’s credit score
and 5) Did they violate the lease in any way?
is low, but they qualify for LeaseGuarantee, you could require them to purchase LeaseGuarantee, which essentially guarantees your rental income should they stop paying rent. If the conditions are approved by your attorney, the same for all applicants, and part of your written criteria, you are in the clear. The Bottom Line Having written criteria you apply equally to all applicants will reduce your liability, provide transparency, and make it easier to select tenants that will be more likely to follow your lease. Although it’s not required by law to have written criteria, it can help back up your rental decision if a tenant ever disputes it. Lastly, run any changes to your policies by your attorney, to ensure you have covered your bases.
Public Records Public records include bankruptcies, state and federal tax liens, and civil judgments. Most landlords are unaware that tax liens and civil judgments are no longer part of a credit report, so it’s important to order a separate public record report along with an eviction, criminal, and credit report. Tax liens, recent bankruptcies, and outstanding civil lawsuits can mean financial liabilities that may impact a tenant’s ability to pay rent.
Alexandra Alvarado Director of Marketing American Apartment Owners Association (866) 579-2262 alexandra@aaoa.com
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