Rejecting prospective tenants during the approval process can be tricky and can sometimes have legal implications if you don’t approach it properly and professionally. You must screen tenants to avoid potentially unsuccessful or problematic tenancies, and you’ll usually have to reject at least one unlucky applicant. But what’s the best way to do this, and what grounds can and can’t you reject someone on?
It’s important to tread very carefully when screening and rejecting. You have every right to find a tenant that you feel good about, but you need to be wary of not discriminating. Screening applicants is the first line of defence is avoiding bad tenants, so what are the warning signs that you need to be looking out for?
What makes a bad tenant?
There are a few tell-tale signs that should serve as big red flags when screening prospective tenants. The relevance and importance of each is likely to differ from landlord to landlord, but here’s a few things we would always advise you to look out for when searching for your perfect tenant.
If a tenant has no credit history, there’s no way of knowing what you can expect from them or how they will treat you. Obviously, there could be a perfectly good reason why someone doesn’t have a credit history – they could be young and moving into their first home away from the family, never having paid bills. In this case, just ask for a guarantor, such as a parent, on the application for security and peace of mind. That way, if your new tenant misses their rent payments you have someone else to turn to. What you definitely need to be aware of is anyone with a bad credit history. Generally speaking, if someone has trouble paying their bills on time, they will likely have trouble paying you on time too.
If someone has a criminal record, it’s perfectly acceptable to decline them on this basis. You could be setting yourself up for property damage, theft, drugs within the property or, even if your tenant is on their best behaviour, they might attract unwanted attention to your property. That being said, it’s also important to not immediately and unfairly tarnish everyone with the same brush. Someone with a criminal record could turn out to be the perfect tenant. Go with your gut on this one and make sure you verify everything on their application, following up with work and past landlord references.
Gaps in someone’s residence history could be a warning sign. What are they trying to hide? Sure, they could have been travelling during this time or living back at home, but perhaps they had a bad tenancy that they don’t want you to find out about. Make sure you ask the questions and gauge their reactions.
Other warning signs to keep an eye out for include trying to haggle over deposits, fees and rent prices, unemployment or not having a big enough income (the general rule of thumb should be three times the rent price), lying on an application and not living or working nearby as this could indicate that they have the intention to secretly sublet your property.
What can and can’t I reject a tenant over?
You should only reject a tenant with good reason, else you might be discriminating which is actually against the law. You cannot reject a tenant for being married, pregnant, transexual, disabled, or on account of their sexuality, gender, race, nationality or religion. These are called the ‘protected characteristics’ as part of The Equality Act.
If you were to explicitly reject a tenant because they are over 70, a man or because they have mental health issues, you’d be breaking the law. It doesn’t mean that you have to favour these characteristics over other tenants – it just means that you cannot refuse to rent someone for any of these reasons.
You can choose not to rent to someone if you believe that they won’t look after your property, if they smoke, if they don’t earn enough, you get a bad previous landlord reference, or even if you just get an uneasy feeling about them. In fact, you can choose not to rent to someone for whatever reason you like – so long as it isn’t because of one of the protected characteristics.
On the other side of discrimination, positive discrimination is allowed. This is when someone’s protected characteristic might actually give them an advantage over other tenants. A property may have been specially adapted for wheelchairs and disabled people or the elderly, which means that you can choose a disabled or elderly person over anyone else.
What’s the best way to reject a tenant?
So, you’ve got a pool of prospective tenants but there’s one or two that you know don’t pass your criteria. Make sure you reject them as soon as you can, so that they can continue looking for another rental property. Don’t leave them hanging if you know that you don’t want to rent to them. When rejecting a tenant, it’s best to do it over email so that you have evidence of your correspondence.
In an ideal situation, you’ll have already chosen your ideal applicant when rejecting your others. That way, you can let the unsuccessful tenant know that the property is no longer available as you have chosen to rent to someone more suitable. If this is not the case, it may be tempting to give this excuse anyway as it avoids any awkward conversations over the reason for rejection. This is not advisable however. You should always avoid lying to a tenant as things could easily become messy and if you have to re-list the property, they might be coming to you for answers.
It’s perfectly acceptable to simply send an email that says something along the lines of, ‘We’re sorry but we have rejected your application for [property address]. If you have any questions, please let us know.” If they do ask you why, you’ll hopefully have a good and legitimate reason to give, such as not having a big enough income. Always be polite and don’t invite too many questions if you’re not all that comfortable answering them.
If someone suspects that you have rejected them due to unlawful discrimination, it will be difficult for them to prove it – particularly if you have followed the correct protocol. However, don’t let this tempt you to act in a discriminatory way. You should always have legitimate reasons for refusal and give every tenant the same chance during the screening process.
Rejecting a tenant will always be a tricky and unpleasant part of a landlord’s job – mainly because you’ll more often than not be letting down perfectly suitable tenants due to others being a slightly better fit. Be sensible and fair when choosing your tenant and always approach the situation as a professional.