As a landlord, you will need to be fully versed in your rights to deny an applicant according to his background check, credit references and history. Compliance with federal and state law should be your top priority. Federal and state law prohibit discrimination based on race, ethnicity, faith and medial conditions. As long as you apply fair standards throughout the board, then you can deny a lease agreement to any applicant who does not satisfy your criteria.

Right of Refusal

As a private citizen running a business, you have the right to deny tenancy to any applicant who fails to meet your requirements based on income, credit, background checks and references. The only standard you must abide by is to apply your tenancy requirements equally across the board. As an example, you cannot set forth income or financial standards for married renters and different standards for two renters living collectively in the unit. Keep your acceptance policies uniform across the board and you’ll be able to deny unqualified candidates depending on your tenant standards.

Adverse Action Notice

Landlords often utilize tenant screening solutions to assess backgrounds of potential tenants. If you deny an applicant based on information employed at a tenant screening report, credit report, or reference-checking service, you must send the applicant an Adverse Action Notice under the Fair Credit Reporting Act (FCRA). The Adverse Action Notice must state the reason for the denial, in addition to the credit reporting bureau used and its contact info.

Non-Compliance

Failure to issue the Adverse Action Notice places you at risk. The denied applicant could file a lawsuit in federal court based on your non-compliance with the FCRA. The applicant could potentially receive compensation, court costs and reasonable legal fees. If the applicant can prove you intentionally failed to comply with the FCRA, he also could seek punitive damages from the court.

Unlawful Discrimination

You cannot discriminate against a tenant applicant dependent on the colour of the skin, the contour of the face, faith, sexual orientation, marital status, source of income or medical impairment. A full listing of illustrations is supplied under the Fair Employment and Housing Act (FEHA), code section 12900 et seq.. The FEHA prohibits unlawful discrimination and gives legal remedies for the wronged party to pursue in court.

Record a Complaint

A denied applicant can file a complaint under the FEHA together with the California Department of Fair Employment and Housing (DFEH). The DFEH uses an administrative procedure to research the applicant’s complaint. If a settlement cannot be reached, the DFEH takes you to appear before an administrative hearing or civil trial to find out if a violation of the FEHA happened. The denied applicant alternatively can file a lawsuit and take you to court for unlawful discrimination.

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