Posted by: phillipsre | April 11, 2013

Reminder to Landlords on Disclosure of Screening Criteria

peopleTenant advocates brought forth cases where undisclosed screening criteria resulted in denial of tenancy, citing the tenants would not have applied if they knew the criteria. The denied applicants complained of damages due to the expense of screening fees. Some applicants had applied at more than one location and lost multiple fees. The advocates answer to this issue was SB 6315. This new law affects the business of being a landlord, requiring landlords to provide rental applicants with a broadened list of screening criteria used in decision making before they apply.

SB6315: “Prior to obtaining any information about a prospective tenant, the prospective landlord shall first notify the prospective tenant in writing, or by posting, of…what types of information will be accessed to conduct the tenant screening (and) what criteria may result in denial of the application.”

Just over a year ago, the Fair Credit Act was revised to require that an Adverse Action Letter be sent to applicants that are denied, stating the cause for denial. A letter is also to be sent if the applicant is accepted with advanced conditions, such as only accepted with payment of first and last month’s rent or a larger security deposit. These are considered additional conditions not pre-disclosed. These new terms change the terms of the original rental offering, therefore, are preferred to be documented in writing.

To help ensure our client’s property’s compliance with SB6315 and continue with compliance with the Fair Credit Act, Phillips has revised our Application to Rent form, which now provides additional screening criteria categories and other content required of the law. We also revised our Adverse Action letter and the application denial process to help ensure written follow up letters explaining the precise causes for declination or conditions of acceptance are sent from our offices rather than by the site managers for improved controls. Some exceptions are made in our 100 unit+ locations with full time staffing. If you have any questions on this or need more information, please contact us.

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