Is it Necessary to Take Rental Applications in Chronological Order?

In short, there is no statute or law that directly states you have to accept applicants in the order that they are received.  There is also no requirement that you have to screen your tenants.  However, based on how discrimination and fair housing laws are written, it is in your best interest to do both.  There still is the chance of various discrimination lawsuits for not following best practices.  It is therefore recommended that you follow the chronological order of applications received and specified screening criteria.

What if I neither Screen nor Accept Applicants in Chronological Order?

shutterstock_43540627Let’s presume that you chose not to screen your tenants and you don’t accept them in the order that they are received.  In this case, there is no verifiable way to explain why you chose one tenant over another.  This can potentially be used as evidence that you discriminated against a potential tenant based on inappropriate criteria.  This includes,

·         race

·         national origin

·         color

·         sex

·         religion

·         family status

·         disability

Is there proof of discrimination?  No.  But what other conclusion is there to be made when there isn’t consistent criterion used for selection?

What If I Just Accept Tenants in the Order they are Received?

This is ok in the sense that you will not be accused of discrimination, but you have not adequately protected yourself as the landlord since you have no idea whether the prospective tenant will be able to consistently pay rent or won’t commit crime, vandalism, etc.  Following chronological order will protect you from lawsuits against you, but there is a higher likelihood to have to take others to court for evictions.

What If I just screen?

As the landlord, you have the right to qualify candidates by credit, criminal, rental history, and more.  If you screen tenants based on their credit rating, it’s important then that you choose the tenant with the best credit.  But what if two applicants were only off by a couple of points and you simply liked somebody else better?  Choosing the tenant with the lesser credit score would show some other personal preference towards the individual and this is subject to discrimination lawsuits.  If you screen on a specified criteria, you need to stick to it.

What if I base the Decision on screening and the Order the Applications are Received?

Excellent, this is the best thing you can do to protect yourself.  The 2012 Fair Housing Handbook of California says that the best way that you can protect yourself is by choosing the “first qualified candidate.”  That translates to Chronological + Screening.  If you find a tenant that qualifies, you can stop screening more candidates.  Lease to that first qualified candidate.  This policy is in your best financial interest in any case.  The landlord wants to fill vacancies as quickly as possible with long-staying residents.

Consistency is Key

Don’t switch things around frequently.  It’s ok to make occasional improvements on the thoroughness of your screening, but you should to the best of your ability screen every tenant in the same way every time.  If you document the application process as you go, you’ll be able to show that you followed a fair and consistent policy if/when inquiries are ever made into the integrity of the application process.

** Always be sure to follow all proper procedures when handling a tenant.  Please be sure that any metric you use in review of an application must be applied to all applications to rent.  A comprehensive view of F.C.R.A. law and procedures can be found here.  Also be sure to follow all fair housing laws and not to discriminate based on race, gender, minority group, etc.  Please also observe local ordinances, which may supersede some federal laws. **