Should it Be Legal for Landlords to “Use Their Gut” When Screening Tenants?

Must Landlords Select Based on “First Come, First Serve”?

I suspect some of this fuss stems from the fact that Kansas City is a hot real estate market. According to Trulia.com, rents in the area have increased significantly, up about $300 over the past year or so. These numbers lead me to believe that the demand for housing is very strong, and I would bet that most landlords are in the enviable position of having numerous qualified applicants.

So, how then should landlords choose the best applicant in Kansas City—or anywhere else for that matter? Should landlords be forced to select tenants on a “first come, first serve” basis, or should they be able to “use their gut” and pick from a pool of qualified applicants? Can the rental application and qualification process be distilled down to checking “yes” or “no” boxes on a form? Should landlords have to take the first qualified tenant? I’m not completely sure, and there are many property and association rights issues there, but I do think that the tenant application and qualification process can be tailored so that the items used to qualify applicants have a direct bearing on whether or not the applicant will be a suitable tenant even when using your gut feelings.

Here is what I mean.

 

A List of Specific Criteria

All landlords, no matter how small an operation they are, should have a written list of criteria they use to qualify and disqualify potential tenants. This list should have a direct bearing on the individual’s ability pay rent and in general be a good tenant.

This may include items such as:

  • Verifiable sources of income
  • An acceptable rent-to-income ratio
  • A lack of evictions or bankruptcy filings
  • A lack of a major or recent criminal record
  • Evidence suggesting a courteous person who does not use intimidating or foul language
  • A generally clean and well kept appearance
  • Truthfulness on and during the application process

Many other items could be included on this qualification list as long as they do not break the law and as long as you are consistent in their application. You could, for example, not rent to folks who own motorcycles or who smoke or who are full-time students if you wanted to, as none are generally a protected class.

What should not be on your list are criteria that have absolutely no bearing on an individual’s ability to pay rent or otherwise be a good tenant. Many of these are protected classes, and you could get into a lot of legal trouble if you deny an applicant based upon any of the following:

  • A person’s race, color, or national origin
  • A person’s religion, creed, or personal politics
  • Familial status or number of children (subject to some overcrowding guidelines)
  • A person’s age, sex, or sexual orientation
  • A disability that can be reasonably accommodated
  • Their current or former military status

Discriminating against these folks seems stupid to me. Why would you want to shrink the pool of folks willing to give you their money? It just seems like a poor business decision.

Once you have such a list, should you be able to use your “gut feeling” during the application process? Yes, I think so. In fact, I think landlords have to, and I do not know how they could not. As an experienced landlord, my gut tells me when something is wrong, when two plus two is not adding up to four.

Where the “Gut Feeling” Comes in

If you get a bad feeling in your gut, what it is trying to tell you is that the applicant is trying to cover something up. And just like a detective, you have to investigate. You have to dig a little to find out what is not adding up. I’ve had prospective tenants, for example, submit fake check stubs and provide phone numbers that went to friends as a means to verify income and employment. I discovered these attempts at deception because something did not sound or look right. My gut told me something was wrong. Can that be difficult or uncomfortable? Yes, but experience will teach you. Will you catch everyone? No. But every experience will help you revise your qualification criteria periodically to cover those who slip by. This in my view is the proper way landlords should use their gut.

 

Should you take the first qualified applicant? Sure. I would. To me, a qualified tenant is as good as a bird in the hand, and if you’ve set up your criteria properly in the first place, you are not going to find someone better anyway. Plus, it seems like kind of a jerk move to qualify and accept someone, only to reject them later.

The bottom line to me is this: I don’t care if you are gay. I don’t care if you are a middle-aged woman from Nigeria with three kids. I’m not interested in having a religious or political discussion with you. I am interested in having a respectful landlord/tenant relationship with you, where I provide decent housing and rent is paid with minimum hassle. That is what I think my rental qualification process achieves, and yours should as well. Does that take using my “gut feeling” sometimes? Yes. Can you legislate that away? I don’t think so. But when jurisdictions try to do so, perhaps some landlords were not quite objecting to the right part.

Landlords, please chime in and share your experiences. Connect with me on Facebook for More!

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