Adverse action notices: what landlords must send

Requiring a co-signer is adverse action. So is asking for a larger deposit, quoting a higher rent than advertised, or approving with conditions the applicant did not ask for. Landlords tend to think the notice obligation begins and ends with the word no, and it does not.

The rule to write on your process today is short: if a consumer report played any part in giving an applicant something worse than what they applied for, a notice goes out. That includes cases where the report was a minor factor, which is the part the FTC’s guidance for landlords calls out by name.

What counts as adverse action

The Fair Credit Reporting Act defines it broadly. For a transaction the consumer initiated, an adverse action is a determination made in connection with that application which is adverse to the consumer’s interests (15 U.S.C. § 1681a(k)(1)(B)(iv)).

Applied to a rental, that covers:

• Denying the application
• Approving it at a higher rent than advertised
• Requiring a larger security deposit than the standard one
• Requiring a co-signer or guarantor
• Requiring prepaid rent or a shorter term as a condition
• Approving one applicant on a joint application and not the other

It does not cover a decision made with no consumer report involved at all. If an applicant is declined purely because their verified income came in under your written multiple, and you never pulled a report, § 1681m(a) is not the operative rule. Say so honestly in your file, because that distinction is worth exactly nothing if the report is sitting in the folder.

What the notice has to contain

Section 1681m(a) sets out the required pieces. The FTC’s landlord guidance lists them in the same terms:

1. Notice of the adverse action itself. Oral, written, or electronic is permitted by the statute. Written is the only version that proves it happened, so write it.
2. The name, address, and telephone number of the consumer reporting agency that furnished the report. Not the software you used to order it, if those are different. The agency.
3. A statement that the agency did not make the decision and cannot give the applicant the specific reasons for it.
4. The applicant’s right to a free copy of the report from that agency, if requested within 60 days.
5. The applicant’s right to dispute the accuracy or completeness of any information the agency furnished.

Notice what is not on the list: your reasons. The statute does not require a landlord to explain which criterion the application failed. Some state and local laws do, and naming the criterion is good practice anyway, because it is the same answer you would give a fair housing investigator later. But the federal notice is about the applicant’s rights, not about your reasoning.

The extra step when a credit score is involved

If you used a credit score in reaching the decision, more is required. Alongside the notice, the applicant gets the numerical score you used and the associated disclosures: where the score came from, the date, the range of possible scores under the model, and the key factors that adversely affected it.

In practice the agency usually supplies those factors on the report, and copying them across is the whole task. Skipping it is the most common gap in an otherwise correct notice. The same written-floor discipline applies upstream, to the income behind the decision: how to verify tenant income and employment covers the documents worth trusting.

Timing, and who sends it

You send it. Not the agency, not the software. The obligation attaches to the user of the report, which is the landlord.

The statute does not set a number of days, which reads like freedom and is not. Send it when you make the decision, on the same day if you can. A notice that arrives three weeks later looks reconstructed, and it also runs down the applicant’s 60-day window to get a free copy of the report they now need.

If you are notifying several applicants at once, send each one separately. A single message that names other applicants is a privacy problem you created for no reason.

Information from somewhere other than an agency

There is a second, quieter rule in § 1681m(b). If you deny an application, or worsen the terms, based on information from a third party that is not a consumer reporting agency, you must clearly inform the applicant of their right to request the nature of that information, and disclose it if they ask in writing within 60 days.

A previous landlord’s answer to a reference call is exactly this kind of information. The reference call script is worth running with that in mind: the notes you took may end up being the thing you have to characterize.

Keep proof that you sent it

A copy of the notice, the date, and the address or email it went to. Nothing elaborate.

This is the part that makes the difference between an obligation you met and an obligation you believe you met. Keep it on the application record with the decision rather than in a sent-mail folder, so it is still findable when the tenancy is long over. Screening in LeaseRooster keeps the application, the report, the decision, and the date on one record for that reason.

A short template of the moving parts

Not legal text, and not a substitute for one your attorney reviews. The pieces, in the order they usually appear:

• The unit and the date of the decision
• The action taken, stated plainly
• A line saying the decision was based in whole or in part on information in a consumer report
• The agency’s name, address, and phone number
• The line that the agency did not make the decision and cannot explain it
• The right to a free copy within 60 days, and the right to dispute
• The credit score block, where a score was used
• Your name and contact details

Draft it once, save it, and send the same one every time. Consistency here does the same work it does everywhere else in screening: it makes the process describable, and a describable process is the one that survives being questioned. If you need the upstream half first, the tenant screening checklist every landlord needs covers permissible purpose and consent, and a standard rental application is where the authorization language belongs.

This is general information, not legal advice. Rules change and local ordinances vary. Confirm current requirements with your city, county, or an attorney before you act.