By Attorney Tristan R. Pettit
Petrie & Stocking S.C.
Let’s face it, most landlords would prefer to never have to reject a rental applicant. It would be great if every application that we received from a potential tenant passed muster — great credit, no prior evictions, awesome job history etc. etc. Unfortunately, most of the time that is not the case. Depending on how tough your screening criteria are, some of you may be rejecting a lot of applicants. It is not fun rejecting a rental applicant, but it goes with the job of being a landlord – it needs to be done.
In most areas of Wisconsin, a landlord is not required to provide a reason for denying a rental applicant. While this may not seem “fair” – it is legal.
CAVEAT: Dane County is a little different in that they require landlords to provide a rejected applicant with an explanation for denying them rental — and the explanation must be in writing. Therefore, if you own or manage rental property in Dane County, I would suggest that you spend some time reviewing the Dane County ordinances and the City of Madison ordinances (if applicable).
Outside of Dane County, there is not one correct way to deny a rental applicant. All property owners handle this situation differently depending on the specific facts of the situation. Some landlords choose to tell the applicant why they were denied while others refuse to do so. Both ways are legally acceptable (again, with the exception of Dane County).
I know of several property owners who require the applicant to put their request in writing in order to receive a reason for their denial. If they receive the written request, then the landlord will provide a written explanation. Oftentimes the applicant will not take the time to make the written request and thus the property owner has avoided the need to provide the explanation.
There is one specific context in which all landlords MUST provide an applicant with a written document — not a written explanation for why they were denied — but a written document referred to as an “adverse action letter.”
If a property owner rejects a rental applicant because of something obtained from the applicant’s credit report, the federal Fair Credit Reporting Act requires that the landlord send the applicant an “adverse action notice” advising them that they have been denied rental in part due to information obtained from their credit report.
An adverse action notice must include the following information:
1. The name, address, and telephone number of the credit reporting agency that supplied the credit report.
2. A statement that the credit reporting agency that supplied the report did not influence the landlord’s decision to reject the application.
3. Advise the rejected applicant of his/her right to dispute the correctness or completeness of the information from the credit reporting agency and the applicant’s right to obtain a free copy of their credit report from the agency within 60 days, if requested.
So, actually an adverse action notice does not require a landlord to state the reason that a rental applicant was denied, but it does tell the rejected applicant that the decision to deny their application was, at least in part, based upon something learned from the applicant’s credit report.
Personally, I provide any applicant that I reject with an explanation. My reasons for doing so are threefold:
1. If I was being rejected for housing I would like to know why so I could see if the reason is something that could be corrected in the future. This is NOT a legal reason for providing the applicant with an explanation but rather a personal one — a variation on the concept of treating others as you would like to be treated.
2. I believe that if I provide a rental applicant with the truthful (and legally valid) explanation as to why I will not be renting to them, they will be less inclined to (incorrectly) assume that I denied them based on discriminatory factors.
3. I’m well-versed in fair housing law and am confident that the basis for my decision to deny a rental applicant is not in violation of federal or state fair housing laws and that my decision can be legally supported.
As mentioned previously, if you do not know if your reason for denial is legally justifiable, then you need to be cautious. You certainly do not want to end up providing the applicant with the only evidence that they need to file — and win — a fair housing claim. If you find yourself in such a situation, I would recommend that you seek legal advice before you make the decision to deny the rental applicant.
Whether you have decided to provide an applicant with an explanation as to why they were denied rental or not, all landlords and property managers should memorialize the reason that they rejected the applicant in writing for their own records. If you are utilizing written screening criteria, then a copy of the criteria is the perfect place to record the reason for denial. Simply circle the specific criteria that the applicant failed to meet. You should also attach any supporting documentation — such as a copy of the applicant’s credit report, CCAP printout showing a prior eviction, or notes from your conservation with the applicant’s current or past landlord, etc. Finally, be sure and notate when you made the decision to deny the applicant and when this was communicated to the applicant. You should retain this paperwork for at least three years, as this is the statute of limitations for the majority of most fair housing claims.
Rejecting a rental applicant can be an uncomfortable situation and even an anxious one if you are not educated about written screening criteria and when you can legally reject an applicant. If you would like to learn more about this very important subject, please contact us:
Attorney Tristan R. Pettit
Petrie & Stocking S.C. 111 E. Wisconsin Ave.
Milwaukee, WI 53202
Fax: (414) 276-0731
Email: [email protected]
For more information, visit: Wisconsin Landlord Tenant Laws Wisconsin Landlord Forms Screening and Qualifying Prospective Tenants Wisconsin Attorney General Issues Opinion That Assists Landlords Regarding Carpet Cleaning
The American Apartment Owners Association provides tenant screening background checks nationwide. Looking for a tenant screening report in a state other than Wisconsin? Visit our tenant background checks page to learn more.