Every experienced landlord will inevitably have to know how to deny an applicant based on the information on their tenant screening report. Let’s face it the whole point of the background check is to uncover the information that helps you determine who you should trust to be a good tenant. And while you hope they check out so you can fill the vacancy, you have to be prepared in the event they don’t.
Regardless of the reason, whether it’s a judgment or an eviction, the action of denying the tenancy is considered an Adverse Action. According to the FCRA, this action requires a process of communication that must be followed.
When is an Adverse Action Notice Required?
When the landlord takes an adverse action based on the background check. This includes denial of tenancy as well as approval with additional terms such as additional deposit or anything imposed outside of the landlord’s standard rental terms due to “higher risk”.
Step by Step Guide to Issuing Adverse Action
Determine if the Adverse Action is going to be approving tenancy with conditions, such as extra security deposit or additional lease terms not otherwise imposed, or complete denial.
Prepare an Adverse Action for either choice.
Here are some free ones we offer on the RentPrep site in the Landlord Essential Kit:
Adverse Action Letter – Approval with conditions
Adverse Action Letter- Denial
Be sure to mail the Adverse Action notice with “A Summary of Your Rights Under the Fair Credit Reporting Act”. A free copy of this can also be found on the RentPrep site in the FCRA Compliance section of the Resources.
Is the Landlord Required to Give a Copy of the Background Check to the Tenant?
Technically no. Once the Adverse Action notice is given, the tenant or applicant can communicate directly with the screening company as advised in the letter with contact information provided. The screening company can then provide a Consumer Copy once the tenant or applicant verifies their identity by sending a photo copy of their driver’s license or other form of ID. RentPrep provides instructions and the request form on the Renters Relation page on the site.