Q. I denied a tenant application because of several late payment marks on her credit report. She was surprised by the denial because the late payments on her credit report occurred more than 18 months ago. After sending a denial notice, should I engage in further discussions with applicants?
A. No. Communicating with a tenant after denying an application carries the risk of a discrimination claim. As a housing provider, a landlord has an obligation under California’s Unruh Civil Rights Act to not discriminate against any applicant based on sex, race, color, religion, ancestry, national origin, age, disability, medical condition, genetic information, marital status, or sexual orientation. An aggrieved or disappointed applicant may take whatever explanation the landlord offers for the rejection as evidence of discrimination under any of those categories.
Along with proper screening, one of the most important things to do when considering tenant applications is to treat the applicants fairly. Before accepting applications, a landlord should adopt a written policy and standards for screening potential tenants. This will guide the landlord to help ensure that each application is held to the same standard as all the others and minimize the opportunity for a discriminatory decision. Choosing the first qualified applicant will also help minimize claims of discrimination from among otherwise qualified applicants.
Landlords should be aware that applications do not just come from prospective tenants, but also advocacy groups. These groups will sometimes have someone pose as an authentic applicant (known as a “tester”) to inquire about rental listings, and then indicate that they may have a disability, or are a member of some other protected class. If the landlord rejects this faux-applicant, the advocate may refer the application rejection to the Federal Department of Fair Employment and Housing for a potential discrimination complaint, which can result in damages, anti-discrimination injunctions, and other penalties.
The best way for landlords to protect themselves from such claims is to have clear, non-discriminatory criteria for evaluating rental applications, and apply them in a fair and consistent way. This will help prevent claims from arising and create evidence to rebut claims after they have been made. In addition, minimizing communication with rejected applicants reduces the opportunity for an applicant to obtain evidence of discriminatory treatment.
Responding to a rejected tenant may help defuse a question of discrimination, such as explaining that the application failed a credit check, when the tenant might believe it was because of their sexual orientation or national origin. On the other hand, providing a specific reason opens the landlord to further interrogation about that reason. Accordingly, although each rejection should be for a specific reason, the landlord should consider keeping the explanation as general as possible, such as simply stating that the application failed to meet the landlord’s required standards.
Except for this kind of rejection notice, continuing to communicate, debate, explain, or justify the rejection is simply a way for a tenant to generate evidence for a claim against the landlord, and should be avoided.
This Q&A was featured in SFAA's April 2019 Magazine.
© 2019 by Fried & Williams LLP. All Rights Reserved. The information contained in this article is general in nature. For advice on any particular matter, please consult with our attorneys because the facts of your situation may be unique and the law changes from time to time.