Tenant selection is one of the landlord's most consequential decisions.
Your goal is to find the "perfect" tenant: Someone who will pay the rent on time, take reasonably good care of the property and live there forever.
A good process predicts whether an applicant is likely to pay, care for the property, follow the lease, and live successfully in the community. A poor process relies on instinct, inconsistent exceptions, or inaccurate data.
Begin With Written Company Policy
Before accepting applications, establish a written company policy for selecting a tenant. It is good practice to make it the first page of your rental application. When applicants with a sketchy rental history see it, they will instantly know that you are a pro! (Click Here For Rental Application).
Your policy should have at least four major categories and sometimes a few minor ones.
Major Categories
Income
- Establish standards for minimum income.
- A multiple of the rent is very common – for example a minimum of 3 times the net income of everyone who is going to sign the lease.
- Collateral: Official Paystubs from the last two pay periods.
Employment
- Establish minimum standards for time on the job is huge.
- A minimum of at least six months continuous employment with the same employer is a good start.
- Collateral: Official Paystubs from the last two pay periods.
Rental History
- Establish standards for rental history covering evictions, average rental period, reports from previous landlords.
Credit History
- Establish standards for credit score, types of credit, derogatory remarks and entries.
Minor Categories (still important)
Pets Policy
Smoking Policy
- No smoking allowed. Smoking outdoors only. All smoking allowed. Again, it's your call but you must uniformly apply all of these standards to every applicant.
Maximum Number of Occupants
- A common policy is 2 persons per bedroom. Thus a two bedroom home means a maximum of four people.
Swimming Pools Policy
- Check your insurance coverage on this. Generally however, very few good things happen to the property and your liability when a pool is installed.
Trampoline Policy
- Check your insurance coverage on this. Generally, however, NOTHING good happens to the property and your liability when a trampoline is installed.
Maximum Number of Automobiles
- A common policy is maximum 2 vehicles, no work vehicles.
Standards must comply with federal, state, and local fair-housing law. A neutral rule can still create risk if it is unnecessary, inconsistently applied, or has an unlawful discriminatory effect.
Confirmation Process
Application fraud may involve altered pay stubs, synthetic identities, false employers, hidden occupants, stolen Social Security numbers, or fabricated landlord references. Verification should use several consistent sources rather than a single document.
Contact employers and landlords through independently verified information when possible. Compare names, dates, addresses, income, deposits, and explanations across the application and reports. Give the applicant an opportunity to clarify genuine discrepancies under a consistent procedure.
Consumer Reports and the FCRA
Credit, eviction, criminal, rental-history, and reference reports may be "consumer reports" under the federal Fair Credit Reporting Act. The landlord must have a permissible purpose and should obtain clear written authorization.
If information in a consumer report contributes in any way to denial, a higher deposit, a guarantor requirement, increased rent, or another unfavorable decision, the landlord must provide an adverse-action notice.
The notice must identify the consumer reporting agency, explain that the agency did not make the decision, and inform the applicant of rights to obtain a free report and dispute inaccurate information. Written notice is the strongest practice.
Criminal and Eviction Records
An arrest is not a conviction. Records may be incomplete, expunged, sealed, mismatched, or lack the outcome. Blanket exclusions can create fair-housing risk and may conflict with local law.
Eviction filings also require context. A filing may have been dismissed, settled, filed against the wrong person, or caused by circumstances that no longer predict tenancy performance.
Use accurate records, individualized criteria where appropriate, and a defensible connection between the information and legitimate rental risk.
Previous Landlord Reports
No one knows what your rental experience is likely to be than your applicant's previous landlords. A five minute phone call could be gold!
Document the Decision
The file should contain the application, criteria in effect, authorization, reports, verification, notes, decision, required notices, and communication. Sensitive information must be protected and disposed of securely.
Do not write subjective comments that cannot be defended. Record facts and the standard applied.
The Practical Rule
Publish lawful criteria, use the same process for everyone, verify through reliable sources, examine context, provide required adverse-action notices, protect personal information, and preserve the decision file.
The most dangerous sentence in tenant selection is, "I just had a good feeling about them." Good people can be poor rental risks, and awkward applicants can become excellent tenants. Screening should be respectful, thorough, and consistent enough that the same facts produce the same decision every time.
Primary authorities: Fair Credit Reporting Act, 15 U.S.C. §§ 1681–1681x; Fair Housing Act; Sections 760.20–760.37, Florida Statutes; applicable local ordinances.
