Free Rental Application

You may wish to require a co-signer if a potential tenant is just beginning a job, and has not established a credit history, and you want to give the person a chance (for example, an employed person who has lived with relatives, and now wants a place of his or her own). To protect yourself in such a situation, a financially responsible person should co-sign the lease in case your initial instincts about the tenant are incorrect.

The same information should be requested from the co-signer as the Applicant. Be as careful checking the references of the co-signer as an Applicant. You may have to rely on the co-signer's financial ability to pay the rent or any delinquencies. Once you have assured yourself of the co-signer's employment and credit references, be sure to have the co-signer actually sign the lease or a co-signer agreement.

If you feel comfortable with the current landlord's recommendation, and the Applicant's employment situation, you may not want to pursue credit references. But a little time and effort spent before ever renting a unit may save frustration in collecting rent or even eviction proceedings. You may establish criteria and check credit references in certain instances. (For example, if the portion of the Applicant's income that will be paid towards rent exceeds a certain percentage (more than a third, for example), or if there is a substantial increase in the new rent over the prior rent.)

Financial Institutions
Most financial institutions will not provide account information over the telephone. Some merchants with customer charge accounts may release credit references. The best approach is to have the Applicant complete financial verification forms at the time the rental application is taken. The letter must be signed by the Applicant. Be sure to include a self-addressed, stamped envelope when sending the form to the appropriate financial institution. This program offers a financial verification form letter toward the end of the Rental Application document.

Credit Reporting Agency
Some landlord groups belong to a credit reporting agency which provides its members with economical credit checking privileges. If you plan on running a credit check, the Applicant's social security number is required. Be sure that the Applicant provides his or her number on the form where requested. Dealing directly with a credit reporting agency can be rather expensive.

When a credit report is a factor in turning down an application, the Federal Fair Credit Reporting Act requires that the reasons and the name and address of the credit reporting agency must be given to the applicant.

Investigative Report
If an investigative report is made of the applicant's personal life, the applicant has the right to be informed, upon request, of the scope and nature of the report. An investigative consumer report is a special credit report with more detail than a routine report. It includes information about the applicant's character, general reputation, and personal characteristics. It may also include information from interviews with neighbors, friends, or associates, and information concerning the applicant's credit standing, and driving habits and record.

If you have any further questions or concerns about using credit references, or are faced with unique credit issues of a prospective tenant, you may wish to contact your local housing authority or other governmental division to inquire further. An attorney should be consulted if any particularly difficult issues arise.

You are not required to rent to the first person who expresses an interest in the rental unit. The purpose for refusing to rent, though, must be based on a permissible purpose. And the purpose of the rental application process is to determine, through permissible factors, to the best of your ability, whether a tenant is an acceptable renter.

Do not discriminate against an applicant on the basis of an illegal purpose: race, color, religion, sex, national origin, age or disability. Such discrimination AS THE SOLE BASIS OF REFUSAL TO RENT is illegal throughout the United States. You may call the U.S. Department of Housing and Urban Development (HUD) at 1-800-424-8590 to ask questions about discrimination.

Additional Classes of Protection from Discrimination
State laws or local ordinances may provide additional classes which are protected from discrimination, such as marital status, sexual orientation, source of income, family responsibilities, or student status. Call your state's consumer protection office or the local department of housing to determine if any additional classes are protected in your locale.

Establish your Standards
You may discriminate on a tenant's ability to pay, pets, waterbeds, number of occupants, honesty, permanence, or other criteria required of all tenants. Establish your standards for a particular rental unit. For example:

Gross income: Four times rental amount

Employment: At least six months in current position

Credit: No negative reports

Rent: No late payments to prior landlord

Pets: None

Smoking: No

Waterbed: One queen size

Vehicles: Two

References: Two good personal references

Occupants: Three

Permanency: At least one year in last two rental units

Appearance: Clean; average apparel

Verify the fact of employment, length of employment and income. Smaller employers are more likely to verify information over the telephone because the employer personally knows the Applicant and wants to assist the employee in obtaining housing. If the employer is reluctant, you can ask questions that will require a simple "yes" or "no" response. For example, "Jim Johnson would like to rent a house from me. On his application he said he worked for your firm for three years. Is that correct?" "Jim indicated that he makes approximately $35,000 a year. Is that correct?" You might also try calling the Applicant's immediate supervisor.

If the employer is reluctant to confirm any information over the telephone, you can use a form letter to request employment verification. It is a good idea to have a serious Applicant complete and sign verification forms at the time the application is taken. The possibility of receiving a response is increased if you enclose a self-addressed, stamped envelope for the employer to return the verification. This program offers verification form letters.

If an Applicant does not meet your criteria, be sure to document the basis of your decision. The best approach with the Applicant is to be honest, direct, and polite. And don't budge from your predetermined criteria despite an appeal from the Applicant. Outbursts from Applicants may be indicative of a reluctance to follow rules or guidelines. Enduring a small amount of unpleasantness at the time of rejection may save you from having to cope with an unsuitable tenant in the future.

After completing the application, ask the applicant for some form of identification. Driver's license, credit card, passport, or military ID. Otherwise you have no way of knowing if the person whose name is on the application and the references are actually those of the prospective tenant! Also verify the identification with information given on the Application - social security number, driver's license number, current address. Ask for an explanation of anything that does not match. Make a note of the explanation, and then decide for yourself if you believe the explanation.

If landlords do not check references, there is no way of knowing if the information given on the Application is true. Check with the prior landlord and verify the employment at a minimum.

Be careful; unscrupulous Applicants can have a friend impersonate the current landlord. When verifying references over the phone, don't indicate that the Applicant has given the reference as a landlord. Instead, tell the person that they have been given as a reference, and ask them how they are acquainted with the Applicant. The friend might think this is a personal reference and give away their ruse. Indicate that your rental unit is substantially higher (or lower) than the prior rental amount given on the application. The landlord should be able to tell you the correct rental amount.

Questions to Ask Current Landlord
Typical question to ask the current landlord include:

1. Current rent payment amount.
2. How long has the Applicant been a tenant?
3. How many times has the Applicant been late with the rent?
4. Have you had any complaints from neighbors regarding the Applicant?
5. Is the Applicant cooperative?
6. Why is the Applicant moving?
7. Would you rent to this person again in the future?

Verify Factual Information
Also, landlords may be reluctant to give out any information. Tell them you are not asking for a good or bad recommendation, just basic information. Verify as much factual information with a reluctant landlord as you can. For example, the amount of rent and how long the Applicant has been a tenant.

Landlords want to be sure to rent to good tenants who will take good care of the premises and make timely rental payments. Following an application procedure requires time, patience and persistence.

Screening Applicants
Pre-qualify applicants. For example, ask about the beginning date of occupancy, advise applicants as to the amount of deposit required, the number of occupants, ask whether they have pets, and whether they have a waterbed. Don't reveal your criteria to the prospective tenant. Rather, ask open-ended questions such as, "Do you have any pets?" If the tenant does not satisfy your initial criteria, there is no need to even complete an application or take the time to show the premises.

Have all prospective tenants who satisfy the initial criteria complete an application form. The landlord is not obligated to rent to the first applicant. (Please read the Discrimination topic for an explanation of a related matter.) Indicate that you will be taking applications over the next few days, verifying employment, credit and references, and will let the applicant know of your decision. Write the reasons for rejection on the back of the Application form and keep it for at least three (3) years as evidence of your fair rental practices.

Some of the information on the application may appear irrelevant, but is good information if you need to collect rent or delinquent rent. Review the Application as if you were trying to collect a judgment for delinquent rent. If the Tenant does not have stable employment or any assets to attach, how can they pay rent?

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Before you accept an Applicant as a tenant, review your rules and policies with them to avoid any misunderstandings. For example, deposits, rent payment, late payment fees, guests, parties, quiet hours, parking, utilities, garbage, pets, waterbeds, hanging things on walls, changing locks, painting, maintenance, emergencies, window breakage, drain stoppages, lockouts, insurance, and how much notice you require if they plan to vacate the premises.

Let your potential tenants have an accurate understanding of what they can expect from you as their landlord, from other tenants (if any) and what you expect from them. After you explain the rules and expectations, ask the tenants for their agreement. Also, complete the "Rental Inspection Checklist" to confirm the condition of the premises at the time they are rented.

A security deposit is an amount of money given to a Landlord by a Tenant that can be used by the Landlord to offset unpaid rental payments due to a default or premature vacation by the Tenant, as well as any damages to the leased property. Although some states place no restrictions on the amount that can be charged for a security deposit, most states limit the amount (for example, the security deposit cannot exceed one month's rent). This cap may be different depending on the type of lease (less can be charged for leases with a term of less than one year, etc.). If you plan to charge a security deposit in an amount greater than one month's rent, be sure to check your state's law to see if there is any limit applicable to your situation.

In addition, some states require that the security deposit be retained in a separate account, and sometimes, in an interest-bearing account. A few states require that the Landlord inform the Tenant of the name of the banking institution where the funds will be escrowed. Finally, some states require that the Tenant of a residential Sublease be provided with an accounting and/or refund of the deposit within a specified period of time after the termination of the lease.

Personal Checks for Deposit or First Month's Rent
Once the lease has been signed, do not accept a personal check for deposits or the first month's rent. Only accept cash, money orders or cashier's checks. Do not provide a key or allow a tenant to move in (even a "few things") until you have been paid the full amount requested. Provide a receipt for whatever money is paid. The receipt document of the Program may be used for this purpose.

1. The Rental Application should be signed by the Applicant(s) and any Co-Applicant(s). The Applicant(s) should be provided with a copy of the Application.

2. In signing the Application, the Applicant (i) verifies that the information provided is true and correct to the best of his or her knowledge, (ii) authorizes the Landlord to verify the references and employment information provided in the Application, and (iii) acknowledges receipt of a copy of the Application.

3. The Rental Application includes a provision which allows the Landlord to sign after making a determination to accept or refuse the Applicant. NOTE: A SIGNED ACCEPTANCE BY THE LANDLORD CONSTITUTES A LEGALLY BINDING PROMISE BY THE LANDLORD TO ENTER INTO A LEASE WITH THE APPLICANT. While the acceptance of the Application does not constitute a lease itself, the Landlord is required to act in good faith to complete the process by negotiating rental terms that will be evidenced by a real estate lease.

4. If the optional Employment Verification Letter is to be used, it should be signed by the Applicant(s) at the time that the Application is submitted to the Landlord.

5. If the optional Request for Account Verification is to be used, it should be signed by the Applicant(s) at the time that the Application is submitted to the Landlord.