” Accepting or Denying an Applicant “

After receiving their background check and verifying the information listed on their application is correct, you will have a good idea of whether or not the tenant is worthy of your rental property. Sometimes, you will receive applications from multiple parties who both qualify. To avoid discrimination complaints, always process applications on a first-come, first-serve basis – processing the application until you discover they do not qualify. If someone doesn’t qualify, move on to the next.

When you deny an applicant, it is important that you clearly document your reasons for why you are denying them to avoid discrimination complaints. Always inform the tenant with written notice. I always send a letter to the tenant stating that they did not meet the minimum requirements for tenancy for “such and such” reason. Be sure to keep a copy of all records pertaining to the prospective tenant so you can back up your reasons for denying a tenant.

When you find an applicant that meets all your requirements, you can verbally let them know that they are approved. However – your job is not yet finished. Many times a good applicant will be approved but still find another place to rent, leaving you wondering what happened to that applicant. Therefore, it is important to require a deposit to hold the vacant property. This deposit is non-refundable and should be due within 24 hours of being accepted. Simply let the approved applicant know that you cannot hold the property indefinitely so if they want to guarantee their position they will need to pay the deposit within 24 hours.

(Some landlords actually require that the deposit-to-hold be paid when the application is filled out and the landlord simply returns the deposit if the tenant doesn’t qualify. While I don’t personally use this technique, it may work for your location if there are a lot of qualified applicants trying to rent your house.)

This deposit will turn into their security deposit (which we will get to later) so it’s not an unexpected cost for the applicant. When you collect this deposit, be sure to sign two copies of a “deposit to hold agreement” that states what the deposit it for and what the terms are. Essentially, this document will state:

  • The applicant has until “such and such” date to sign a lease agreement.
  • If not signed by that date, the deposit will be forfeited to the landlord.

Both you and the prospective will receive a copy of this agreement, which will serve as a receipt for the applicant. I try to schedule the lease signing for as soon as possible, to minimize the amount of time the property is left vacant and costing me money. Typically, I will not hold it longer than two weeks unless I absolutely love the tenant and don’t want to lose them. This is up to you and your discretion.


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