A landlord can deny a rental application for many reasons, but not for illegal reasons. A landlord who is just starting out in her job should review the California Department of Fair Employment and Housing (DFEH) rules regarding housing discrimination. The department's rules list illegal reasons to deny or discriminate against a residential renter.
General Advice for Landlords
In addition to the DFEH rules, a landlord should review the ordinances in his city and county that provide additional protections for renters. He should also talk with an experienced landlord about the best way to interview applicants, provide information about units and prices, and reject applicants. Understanding the norms of the industry will help the landlord avoid accusations of illegal housing discrimination.
A landlord should make sure she has a strong position to deny a rental application. She needs a reason for denial that will stand up to a housing discrimination lawsuit in court. A landlord who is unclear as to whether a reason to reject an applicant is valid should consult with a real estate attorney specializing in residential rentals.
Read More: How to Report Bad Landlords
Legal Reasons to Deny Applications
The numerous valid reasons to deny a prospective renter's application include 13 common reasons that relate to truthfulness, financial history, criminal history and exceptions for senior housing:
1. A landlord can legally deny an applicant who has failed to pay the applicant screening fee stated on the application. She can also state this fee verbally, during the interview process. When an applicant does not pay this fee, he has not fully completed the process of applying for the unit.
2. A landlord can legally deny an applicant with a poor credit rating. He must provide the applicant with a copy of the credit report if requested. An individual can put a freeze on a credit report that prevents unauthorized persons from getting it. An applicant can address this by contacting a credit report service and allowing a particular landlord or property manager to access the report or she can suspend the freeze.
3. In most areas, a landlord can legally deny an applicant with a criminal history. This is not true in Oakland. This city passed an ordinance in January 2020 that banned criminal background checks on renters. In areas where it is legal to do a criminal background check, the landlord should ensure that a criminal background check is accurate because many reports contain false information. For example, some reports contain convictions of other people with the same name, but not the same birthdate or other identifying information, such as race, ethnicity or nationality.
4. A landlord can legally deny an applicant who has a history of being evicted. Using eviction records to deny an applicant can present a concern, though. In many instances, eviction records may be outdated or inaccurate, and an eviction may not be part of a rental history if it is more than seven years old. A landlord may want to provide a copy of the eviction record so the applicant can determine whether it is accurate. In certain locations, renters who would otherwise have an eviction on their record may have had their evictions blocked. And certain cities have chosen to protect renters by passing ordinances to prevent them from getting evicted.
5. A landlord can legally deny an applicant whose identity and housing history do not match the information on the applicant’s rental application. But landlords should be sensitive with regard to information regarding gender. This is particularly true if the applicant is in the process of transitioning to a different gender. California law provides that it is illegal for a landlord to discriminate against an applicant because of the applicant’s gender identity or gender expression. A landlord should also be sensitive with regard to information regarding race and ethnicity, which are also protected classes under state law. An applicant can learn from family members or genetic testing if they are multiethnic or a different ethnicity than originally thought.
6. A landlord can legally deny an applicant whose income or savings are insufficient to pay the rent. State law mandates a landlord cannot deny an applicant because of the applicant’s source of income. A Section 8 housing voucher and a Veteran Affairs Supportive Housing voucher are considered sources of income. In addition, a landlord should not assess an applicant’s ability to pay based on an amount greater than the portion of rent that the applicant would pay. For example, if an applicant was expected to pay 30 percent of his income to rent with a housing voucher that pays the remaining 70 percent, the landlord should assess only the applicant’s ability to pay the 30 percent of the monthly rent amount.
Local ordinances, such as San Jose’s Housing Payment Equality Ordinance, cement the requirement that a landlord consider an applicant who receives financial assistance equally to other applicants. A landlord should not advertise that the complex does not accept housing vouchers nor impose rental terms on voucher holders that differ from the terms for other applicants.
7. A landlord can legally deny an applicant because he has one or more pets, but cannot legally deny an applicant who has an animal that is a service animal, including an emotional support animal. When a landlord has a question as to an animal’s role and qualifications, it is appropriate for him to get written verification from the tenant’s health care provider. The records should be current and provide the age and breed of the animal. The records should state whether the animal is a service animal or an emotional support animal. A landlord may request copies of the animal’s health records to get proof that the animal is not sick, has been vaccinated and is free of parasites, such as fleas.
8. A landlord can legally deny an applicant who smokes, either tobacco or cannabis. This is true even if an applicant smokes cannabis for medical reasons and has written verification from her health care provider that this drug has been recommended for medical use.
9. A landlord can legally deny an applicant who has not completed the rental application. A landlord should also look for large gaps in an applicant’s rental history. For example, if an applicant lived in one apartment from 2019 to 2020, and a different apartment from 2017 to 2018, the landlord may inquire where the applicant lived between 2018 and 2019.
10. A landlord can legally deny an applicant who has not accepted the rental cost of the unit. When an applicant attempts to bargain with a landlord or makes counteroffers to the stated rent, this constitutes not accepting the price of the unit.
11. A landlord can legally deny an applicant whose previous landlords have stated that the applicant exhibited poor behavior and would not be a good fit for the unit. Such qualities include consistently paying rent late or creating disturbances at the complex.
12. If the unit is in a senior community, a landlord can legally deny an applicant if the applicant is too young to live in the community. This is an exception to California’s prohibition against housing discrimination.
13. If the unit is in a senior community, a landlord can legally deny an applicant if she has children. This is also an exception to California’s prohibition against housing discrimination.
Methods of Communicating Rejection
A landlord has many legal and valid reasons to deny the rental application of a prospective tenant. A landlord is at risk of having a complaint filed against her or getting sued if she discriminates against a potential tenant based on the tenant’s ancestry, national origin, disability, familial status, gender identity or gender expression, genetic information, marital status, military and veteran status, race, color, religion, sex (which includes pregnancy), gender, sexual orientation or source of income.
A landlord should reject a prospective tenant in a polite and respectful way. An acceptable way to tell a prospective tenant she has been rejected is: “We apologize, but we have rejected your application. Please let us know if you have any questions.” It is best to reject a tenant in writing to prove that the rejection was communicated in a polite and timely manner. A landlord should not tell a prospective tenant that he has rented the unit to another person unless this is true.
A landlord should treat all tenants equally. If she requires an application and credit report from one applicant, she should require the same information from all applicants. A landlord should use standard, polite letters to communicate rejection. A consistent and respectful method of communication is proof that all rejected applicants were treated in the same manner.
- California Legislative Information: Consumer Credit Reporting Agencies Act Sections 1785.1 - 1785.36, Obligations of Consumer Credit Reporting Agencies
- Experian: How Long Does an Eviction Stay on Your Record?
- CAPRadio: Cities Step in to Halt Last-Minute Evictions
- FOX KTVU 2: The Number of Bay Area Evictions Decline, But Ramifications "Catastrosphic"
- California Department of Fair Employment and Housing: State Law Prohibits Discrimination in Housing
- California Legislative Information: SB-329 State Discrimination Housing: Source of Income.
- CNN: Oakland Becomes the First City to Ban Criminal Background Checks on Renters
- City of San Jose: Housing Payment Equality Ordinance