Approve, deny, or approve with conditions. Landlords plan for two of those and improvise the third, which is unfortunate, because the third is the one with a federal notice attached to it.
Requiring a co-signer, a larger deposit, or a higher rent than advertised is adverse action under the Fair Credit Reporting Act when a consumer report contributed to the requirement. So the first fix is a small one: add a third outcome to whatever you use to record decisions, and treat it as a denial for notice purposes.
Then work the outcomes in order.
Before any of them: decide in what order applications get considered
If two applications are on your desk, the order you consider them in is a decision you should have made weeks ago.
First complete application received, first considered, is the cleanest rule. It is easy to document, easy to explain, and in California it is one of only two processes a landlord charging a screening fee is permitted to run: Civil Code § 1950.6(c)(2) requires either considering completed applications in the order received and approving the first one that meets the established criteria, or refunding the entire fee to everyone not selected. The same section sets the deadlines that attach to each.
Wherever you rent, write the rule down and timestamp applications on arrival. Taking every applicant on the same form, such as a free rental application, makes “complete” easy to judge.
Outcome 1: approve
The applicant met every written criterion. Do four things, in this order, on the same day.
- Record the decision against the criteria, with the date. One line is enough: which criteria were met, who decided, when.
- Send the approval in writing, stating the unit, the rent, the deposit, the start date, and how long the offer is open. An open-ended approval leaves you unable to move on when the applicant goes quiet.
- Tell the other applicants, promptly. If a report contributed to any of those decisions, that is a denial and a notice goes out.
- Move to the lease while everything is still in front of you.
Point three is the one that slips. An applicant who never hears back is the applicant who files a complaint, and “we went with someone else” is a message that takes fifteen seconds.
Outcome 2: approve with conditions
This is a real, useful outcome. An applicant who is strong on income and thin on credit history might be a fine tenant with a co-signer, and a rule that only allows yes or no throws away perfectly good tenancies.
It comes with three requirements.
The condition has to be written into the criteria in advance, applying to any applicant in that situation. A co-signer offered to one applicant and not to another with the same file is the clearest form of inconsistent treatment there is, and 42 U.S.C. § 3604(a) reaches making a dwelling unavailable, not only refusing outright.
The condition has to be lawful in your state. Deposit caps and what may be charged alongside them vary, and a condition that exceeds the cap is not fixed by the applicant agreeing to it. Our state-by-state deposit limits covers the caps.
And if a consumer report contributed, an adverse action notice goes out even though the answer was technically yes. The FCRA’s definition of adverse action reaches any determination adverse to the consumer’s interests in a transaction they initiated (15 U.S.C. § 1681a(k)(1)(B)(iv)), and being asked for an extra month of deposit qualifies. Adverse action notices covers the contents.
Outcome 3: deny
Keep the denial itself short and factual. It does not need to argue.
What goes in the file, though, is longer: which written criterion the application failed, the verification or report line that established it, the date, and a copy of whatever notice went out. The denial message and the file are different documents with different jobs.
Send the adverse action notice the same day when a report was any part of it. The federal statute sets no deadline, which is not a reason to wait: a late notice shortens the applicant’s 60-day window to get a free copy of the report and reads as reconstructed.
One thing to resist. Do not add reasons after the fact because the first one felt thin. The reason is whichever criterion the application actually failed, recorded when you found it. A file with two different explanations in it is worse than a file with one imperfect one.
Moving an approved applicant into a lease
The handoff is where records get lost. The application, the verifications, and the decision live in one place, the lease gets drafted somewhere else, and six months later nobody can connect them.
Keep them attached. The lease that comes out of the application should carry the same unit, the same rent, the same deposit, and the same start date the approval stated, and any condition you attached in outcome 2 needs to appear as an actual lease term rather than as a verbal understanding.
Clauses that carry a fee or a number are the ones to check twice, because several states constrain them. If you are drafting from scratch rather than from a template, state lease templates are a faster starting point than a blank page.
The record to keep, per applicant
Same list every time, approved or not:
- The application and its arrival timestamp
- The written criteria in force on that date
- Income and rental history verifications
- The consumer report, if one was obtained
- The decision, naming the criterion, with the date and the decider
- The notice sent, and the date it went out
Keeping that on the application record rather than across an inbox and a folder is most of what screening in LeaseRooster does. The decision, its date, and what it rested on stay on the applicant, which is the form the question takes when somebody asks about it years later.
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.