As home prices continue to soar in a historic seller’s market, many Americans are postponing home ownership in favor of renting. According to April 2021 statistics from the U.S. Census Bureau, more than one-third of U.S. homes are occupied by renters.
As a result, many landlords have a wide choice of tenants from which to select. One of the best tools for choosing a quality tenant is the rental application. This legal document includes basic information as well as a series of specific questions that help landlords make sure applicants are a good fit for the property.
A rental agreement not only helps the landlord, but it also gives the renter a better understanding of the property and the terms and conditions of living there. If any legal issues should arise, both parties can rely upon a property structured rental agreement to protect them. This article will examine the purpose of a rental application and what the document should -- and should not -- include.
What is the Screening Process?
A rental application is an essential part of the screening process a landlord should use to find responsible tenants. Although the application does not offer a guarantee that nothing will go wrong, a completed application provides landlords with the identification, references, and other information they need to weed out potential problem renters.
Every landlord wants to know that a prospective tenant will pay their rent on time and take care of the property. It goes without saying that no one wants to be left with unpaid monthly rents and costly repairs.
Setting your criteria in a rental advertisement can begin the screening process and save both you and a prospective renter’s time. For example, your ad should specify your pet policy and smoking policy. Once you’ve narrowed down a list of applicants, you can talk with these individuals over the phone before scheduling a meeting and a tour of the property. You might ask why they are moving and how long they intend to stay in the new home, for instance.
If they seem like a good fit, your next step is to schedule that in-person meeting.
Why is it important to get a Rental Application?
Landlords are uncomfortable with vacancies. However, the use of a rental application underscores the importance of taking the time and effort to find the right tenants. Rushing into a lease agreement without an application could be costly in terms of missed payments or property damage.
When you meet face to face, you should ask the prospective renter to complete an application that outlines your expectations. Another option is to request the individual complete the application online; it’s up to you.
A strong rental application can assure you that someone is a quality tenant who meets the following criteria:
- a monthly income that is three times the rental rate
- no history of prior evictions
- a clean criminal record
- a good credit score
- positive references
- a history of steady employment
You’ll find that the terms “rental agreement” and “lease agreement” often are used interchangeably. However, some landlords use a rental agreement for month-to-month arrangements, while a lease agreement covers 12 months or longer. Make sure your document specifies the length of the contract, and both parties understand and agree to that length.
What should a Rental Application include?
Rental applications can vary from property to property, from city to city, and from state to state. Local, state, and federal regulations determine what you can and cannot ask. However, here is a list of the information a rental application should include:
-
Identification. The full legal name, date of birth, and Social Security number of anyone who will live in the home.
-
Proof of income. The rule of thumb is a quality tenant makes three times the monthly rental. The application asks for proof of this income, such as pay stubs, bank statements, tax statements, or a W-2 tax form. Landlords may contact an applicant’s employer for confirmation of an employment contract and salary.
-
Credit score. A signed rental application usually serves as consent for the landlord to check your credit score. A low score, such as one caused by bankruptcy, can lower the chances of getting an application approved.
If an applicant is just beginning to establish their credit, then the landlord may ask for a cosigner or several months’ rent in advance. If someone is re-establishing their credit, a low score may not be a problem if the applicant can demonstrate clear progression.
-
Background check. A landlord will also use the information from the application to run a background check. This step searches for any criminal history that might reflect the applicant’s dependability. This portion of the application also gives renters the opportunity to provide context to anything, including a prior eviction notice, that might come up in a background check and explain why it will not pose a problem.
-
References. This part of the application asks for the applicant’s rental history and allows the new owner or manager to contact the applicant’s previous landlords. If the applicant has no prior rental history, they may provide personal references, such as teachers and employers.
If pets are allowed in the home, the application also will ask for information on the number, size, and age of any animals.
Prospective applicants may have to pay an application fee – frequently in the range of $35 to $75 per application – to cover the landlord’s time and any expenses involved in handling the screening process.
What is the Federal Fair Housing Act for Rental Applications?
Enacted in 1968, the Fair Housing Act (FHA) protects Americans from discrimination when buying a home, renting a home, applying for a mortgage, or pursuing other housing-related activities.
The federal Act prohibits landlords from discriminating against applicants based on the following:
- race
- national origin
- religion
- color
- familial status
- sex
- physical or mental disability
Many states and communities also prohibit discrimination based on sexual orientation. In limited situations, the FHA does not apply to buildings with four or fewer units that are owner-occupied, single-family homes rented or sold by the owner without an agent, and housing run by private or religious organizations that offer residences to members only.
Another aspect of the FHA is that landlords must ask all applicants the same application and interview questions. For example, a landlord cannot ask for income verification from one applicant and not from another without appearing discriminatory.
The Landlord Chooses the Tenant
While the federal government protects applicants from many forms of discrimination, a landlord can reject an applicant for a criminal background, poor credit history, prior evictions, lack of income, a negative reference from a previous landlord, or false information on the application.
Two other areas in which a landlord can disqualify a tenant involve smoking and pets. The FHA does not cover smoking since it is considered a lifestyle choice. Therefore, landlords can legally add an addendum to a lease agreement that smoking is prohibited on the property.
In the same way, landlords can refuse to rent to applicants with pets. Landlords who allow pets may set size limits, rules for where pets may be on the property, and charge fees and deposits for pets. However, since the law does not consider service animals as pets, landlords must provide reasonable accommodations for service animals.
Most rental applications are in a standardized format that ensures legality and can help both renters and landlords enter into a fair agreement. Visit lawdristict.com to create and download a rental application in just minutes.
Get your Rental Application Updated
Helpful Resources:
Quarterly residential vacancies and homeownership, Third Quarter 2022 | Census
As home prices continue to soar in a historic seller’s market, many Americans are postponing home ownership in favor of renting. According to April 2021 statistics from the U.S. Census Bureau, more than one-third of U.S. homes are occupied by renters.
As a result, many landlords have a wide choice of tenants from which to select. One of the best tools for choosing a quality tenant is the rental application. This legal document includes basic information as well as a series of specific questions that help landlords make sure applicants are a good fit for the property.
A rental agreement not only helps the landlord, but it also gives the renter a better understanding of the property and the terms and conditions of living there. If any legal issues should arise, both parties can rely upon a property structured rental agreement to protect them. This article will examine the purpose of a rental application and what the document should -- and should not -- include.
What is the Screening Process?
A rental application is an essential part of the screening process a landlord should use to find responsible tenants. Although the application does not offer a guarantee that nothing will go wrong, a completed application provides landlords with the identification, references, and other information they need to weed out potential problem renters.
Every landlord wants to know that a prospective tenant will pay their rent on time and take care of the property. It goes without saying that no one wants to be left with unpaid monthly rents and costly repairs.
Setting your criteria in a rental advertisement can begin the screening process and save both you and a prospective renter’s time. For example, your ad should specify your pet policy and smoking policy. Once you’ve narrowed down a list of applicants, you can talk with these individuals over the phone before scheduling a meeting and a tour of the property. You might ask why they are moving and how long they intend to stay in the new home, for instance.
If they seem like a good fit, your next step is to schedule that in-person meeting.
Why is it important to get a Rental Application?
Landlords are uncomfortable with vacancies. However, the use of a rental application underscores the importance of taking the time and effort to find the right tenants. Rushing into a lease agreement without an application could be costly in terms of missed payments or property damage.
When you meet face to face, you should ask the prospective renter to complete an application that outlines your expectations. Another option is to request the individual complete the application online; it’s up to you.
A strong rental application can assure you that someone is a quality tenant who meets the following criteria:
- a monthly income that is three times the rental rate
- no history of prior evictions
- a clean criminal record
- a good credit score
- positive references
- a history of steady employment
You’ll find that the terms “rental agreement” and “lease agreement” often are used interchangeably. However, some landlords use a rental agreement for month-to-month arrangements, while a lease agreement covers 12 months or longer. Make sure your document specifies the length of the contract, and both parties understand and agree to that length.
What should a Rental Application include?
Rental applications can vary from property to property, from city to city, and from state to state. Local, state, and federal regulations determine what you can and cannot ask. However, here is a list of the information a rental application should include:
-
Identification. The full legal name, date of birth, and Social Security number of anyone who will live in the home.
-
Proof of income. The rule of thumb is a quality tenant makes three times the monthly rental. The application asks for proof of this income, such as pay stubs, bank statements, tax statements, or a W-2 tax form. Landlords may contact an applicant’s employer for confirmation of an employment contract and salary.
-
Credit score. A signed rental application usually serves as consent for the landlord to check your credit score. A low score, such as one caused by bankruptcy, can lower the chances of getting an application approved.
If an applicant is just beginning to establish their credit, then the landlord may ask for a cosigner or several months’ rent in advance. If someone is re-establishing their credit, a low score may not be a problem if the applicant can demonstrate clear progression.
-
Background check. A landlord will also use the information from the application to run a background check. This step searches for any criminal history that might reflect the applicant’s dependability. This portion of the application also gives renters the opportunity to provide context to anything, including a prior eviction notice, that might come up in a background check and explain why it will not pose a problem.
-
References. This part of the application asks for the applicant’s rental history and allows the new owner or manager to contact the applicant’s previous landlords. If the applicant has no prior rental history, they may provide personal references, such as teachers and employers.
If pets are allowed in the home, the application also will ask for information on the number, size, and age of any animals.
Prospective applicants may have to pay an application fee – frequently in the range of $35 to $75 per application – to cover the landlord’s time and any expenses involved in handling the screening process.
What is the Federal Fair Housing Act for Rental Applications?
Enacted in 1968, the Fair Housing Act (FHA) protects Americans from discrimination when buying a home, renting a home, applying for a mortgage, or pursuing other housing-related activities.
The federal Act prohibits landlords from discriminating against applicants based on the following:
- race
- national origin
- religion
- color
- familial status
- sex
- physical or mental disability
Many states and communities also prohibit discrimination based on sexual orientation. In limited situations, the FHA does not apply to buildings with four or fewer units that are owner-occupied, single-family homes rented or sold by the owner without an agent, and housing run by private or religious organizations that offer residences to members only.
Another aspect of the FHA is that landlords must ask all applicants the same application and interview questions. For example, a landlord cannot ask for income verification from one applicant and not from another without appearing discriminatory.
The Landlord Chooses the Tenant
While the federal government protects applicants from many forms of discrimination, a landlord can reject an applicant for a criminal background, poor credit history, prior evictions, lack of income, a negative reference from a previous landlord, or false information on the application.
Two other areas in which a landlord can disqualify a tenant involve smoking and pets. The FHA does not cover smoking since it is considered a lifestyle choice. Therefore, landlords can legally add an addendum to a lease agreement that smoking is prohibited on the property.
In the same way, landlords can refuse to rent to applicants with pets. Landlords who allow pets may set size limits, rules for where pets may be on the property, and charge fees and deposits for pets. However, since the law does not consider service animals as pets, landlords must provide reasonable accommodations for service animals.
Most rental applications are in a standardized format that ensures legality and can help both renters and landlords enter into a fair agreement. Visit lawdristict.com to create and download a rental application in just minutes.
Get your Rental Application Updated
Helpful Resources:
Quarterly residential vacancies and homeownership, Third Quarter 2022 | Census
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