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How To Politely Decline A Rental Applicant

It is possible to politely decline a rental applicant. The most important thing is to communicate all your acceptance criteria right from the start, and to stay true to your policy.

And it doesn’t hurt to express an understanding of how the applicant might feel being rejected.

Woman putting hand out to reject you

When The Applicant Did Not Qualify

Let’s say you’ve had an applicant come through the process, they filled out the application, gave you their application fee, and they didn’t meet all your criteria.

Make sure you have clear qualifications for rental

You can make declining an applicant much easier (and more polite) by starting the process with clear requirements for rental. These requirements should be what you actually use to decide who you’re renting to.

These are things like:

  • Minimum credit score
  • Proof of monthly income
  • No prior evictions
  • Good recommendations from previous landlords
  • Debt to income ratio
  • No history of violent crime

You will want your list of qualifications to be visible to prospective tenants. If they fill out and application and give you $50 for an application fee only to find out they don’t make enough money to qualify, they probably won’t be happy.

I suggest putting your most important criteria in your rental ads and verbally communicating those criteria at least once before you give out the rental application.

Illegal reasons for denial

According to law, there are legally OK reasons to decline an applicant, and illegal reasons. You cannot decline an applicant due to:

  • Race
  • Religion
  • Color
  • Age
  • Sexual orientation
  • Handicap
  • National origin
  • Gender or gender identity
  • Familial status
  • Participation in Section 8 or other rental assistance programs
  • Marital status

Just be sure that when you say no to an applicant, it’s not for any of these reasons.

How to decline an unqualified applicant

Let’s say our applicant did not meet the minimum credit score, how do we politely tell them that we will not be able to rent to them? Whether you send a letter, text or call, I think the same guidelines can be used.

Thank them for their time and their interest in the property. Then remind them of the qualifications for rental, and tell them which qualification(s) they failed to meet.

If you would like to rent to them in the future or have another property they would qualify for, this is a great time to say so. If they wouldn’t qualify for another property it’s totally fine just to wish them luck finding a place.

I might say something like this:

” Hi John,

It was great meeting you and showing your around the apartment at 123 Bacon Street. I’ve finished reviewing your rental application and the information you sent me. If you remember, the qualifications for acceptance were a minimum credit score of 600, minimum monthly income of $3,200, no prior evictions on record, and no history of violent crime.

Your credit score came back at 565. Unfortunately, this doesn’t meet the minimum credit score of 600, so we won’t be able to continue forward in the rental process for 123 Bacon Street.

I would be happy to rent to you in the future. In fact, I have two other rental units that you would qualify for: 456 Lettuce Way and 798 Tomato Drive. Let me know if you’d be interested in viewing either one. We could skip most of the application process since I already have your information.

Thanks again,

Michael”

And if I didn’t have any other property they would qualify for, I would replace the last paragraph with something like this.

“I wish you the best of luck finding a place to stay. If you have any questions for me, or if I can help you in your search for an apartment, my number is 555-123-4567.”

When You Have More Than One Qualified Tenant

There is another situation that can arise, that is arguably harder to handle. What happens when you’ve gone through the entire screening process and more than one tenant has met your criteria for rental?

You can only pick one.

So if you have 2 or 3 applicants that all meet your qualifications for rental, how do you choose who to rent to? And how do you tell the others that you’re not renting to them, even though they met all the qualifications?

Can you just pick your favorite?

I generally try to follow the rule of renting to whoever got there first, but you have the right to choose the most qualified applicant. That’s different than picking your favorite. If credit score is one of your criteria, then you should prefer applicants with higher credit scores. You shouldn’t choose an applicant because they are also a dog lover and like mushrooms on their pizza. Stick to your acceptance criteria.

The reason why I try to go with the first person to fill out an application is that, if the applicants are all similar, then choosing someone other than the first to apply can give the impression of discrimination. The best way to avoid a lawsuit is to make your applicants feel that the process is fair.

The other reason I tend to go with the first qualified applicant is because it’s much easier (for me personally) to tell someone that I went with the person that got there first than it is to tell them I went with someone because they make more money.

Put your tiebreaker in your qualifications

We talked about listing your qualifications in your rental ad, and then verbally reminding potential tenants about those qualifications at least once before they fill out a rental application.

My recommendation is adding your tiebreaker to that list. You can just add a list item like this:

“In the event of multiple qualified applicants, the applicant with the highest credit score will be accepted”

Or

“The home will be rented to the first qualified applicant”

If your tiebreaker has already been communicated a few times before anyone applies, then it will be much easier to politely communicate that they lost the tiebreaker.

Just make sure your tiebreaker doesn’t fall into the list of illegal reasons for denial.

How to decline a qualified applicant

If your prospective tenants already know how you pick from multiple qualified tenants, then turning down those you didn’t choose will be much easier, and hopefully come off more respectfully.

Your decline could sound something like this.

“Hi Joan,

I really enjoyed meeting you and showing you the house at 369 Macaroni Lane. After reviewing your application I found that you met all our rental requirements.

As it turns out we also had two other applicants that met our rental requirements. When I run into this situation, where I have more than one person I want to rent to, I have a rule to try and keep my process as fair as possible. I rent to whoever has the highest credit score. While your credit score was great, there was another applicant with a higher score.

Thanks again for taking the time to come see the property and apply. I would love to rent to you in the future if the opportunity arises.

Best,

Michael”

The biggest to accept the first qualified applicant

There’s one more reason why I generally accept the first qualified applicant, and this is the really big one for me.

I require the applicant to give me an application fee to cover the cost to pay for a credit check and background check. Since I use the American Apartment Owners Association tenant screening service, I will get back the results same day (as long as the applicant accepts the inquiry when they get the email).

If I run the checks in order of when they applied, then I can return the application fee to any applicant whose credit/background check I haven’t run yet.

I don’t think it’s any surprise that potential tenants are much happier being rejected when you can return their application fee. Being able to return that fee is the biggest reason I tend to accept the first qualified applicant.

Conclusion

Turning down rental applicants can be a tough business. In my experience, the best way to make sure you’re being fair and respectful is to plan ahead and stick to your rules, while still showing some human decency.

Make sure your rental qualifications are in your ad, and that you verbally communicate those rules before handing over a rental application. And make sure your process for making a decision among multiple qualified applicants is also communicated before anyone applies.

If you do this, then they should already understand what caused you to make the decision you made. This usually allows everyone to feel respected, even when they are declined.

Happy investing.

Michael

I'm living the path to financial success and sharing everything I learn in this blog. I believe in the power of cash flowing investments, due diligence and time. This is my journey so far.

I learned everything I know from books, podcasts, conversations with friends and family and of course through real world experience as a cash flow investor. And I'm always pushing to learn more.

To see my investing timeline, check out our about page

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