Renting out a property is a good way to earn extra money, but it also involves quite a bit of work. In addition to preparing the property for rental, you must choose a qualified tenant. Therefore, it is essential that one does a Landlord Credit Check on all applicants who are being considered. Then you must make sure that you are in compliance with all state, federal and FCRA laws when approving or declining an applicant.

A Landlord Credit Check is a right that all landlords are entitled to. However, one must not use the results of a landlord credit check to discriminate against any individual. The Fair Housing Act is very clear on what constitutes discrimination: denying housing to an applicant based on race, gender, family status, country of origin, religion, age, sexual orientation, or disability. Still, depending on how a rejection is handled, there is always a chance that a discrimination claim could be filed by a rejected tenant—even if there was a legitimate and non-discriminatory reason based on the landlord credit check.

To avoid false claims of discrimination:

   1. make sure to have a solid reason for the rejection—and support it with paperwork—such as the results of a landlord credit check.

   2. communicate the reason to the applicant in writing. The tenant could make up his own reasons for the rejection, including his race or religion. (note: law requires that every time a landlord credit check is performed, you must notify the applicants in writing.)

   3. Establish minimum standards for approving tenants and apply them equally to every applicant.

   4. Full disclosure to all applicants up front is a good idea. Your lease application should convey your standards. For example:

      * That a landlord credit check will be performed on all adult applicants.

      * That a minimum income level is required to rent the unit.

      * That previous rental history and employment will be checked, including Timely rent payment, property maintenance, and fulfillment of previous Leases

      * include a statement that you do not deny the right to rent/lease based on race, gender, family status, country of origin, religion, age, sexual orientation, or disability