Introduction
Tenant screening is one of the most important steps in the rental process—but it’s also one of the most legally sensitive. While property managers and landlords want to protect their investments and ensure qualified tenants, they must do so within the bounds of fair housing laws and privacy regulations.
Using illegal or discriminatory screening criteria—whether intentional or not—can lead to serious legal consequences, including lawsuits, fines, or fair housing violations.
In this post, we’ll explain what tenant-screening criteria are legally allowed, which factors you can (and can’t) use, and how to create a fair, consistent screening process that protects your property and complies with the law.
Why Legal Screening Matters
Using compliant screening criteria helps you:
- Avoid Fair Housing Act violations
- Reduce the risk of discrimination lawsuits
- Create a consistent, transparent rental process
- Build trust with applicants and regulators
Even well-intentioned landlords can run afoul of the law if they rely on vague or subjective decision-making. Let’s break down what’s allowed—and what’s not.
Legally Allowed Tenant-Screening Criteria
Here are the main criteria property managers and landlords are legally permitted to use—assuming they are applied fairly and consistently to all applicants.
1. Credit History
Landlords can review credit reports to assess financial responsibility. Key factors include:
- Credit score
- Payment history
- Debt-to-income ratio
- Bankruptcies or collections
Allowed: Using a minimum credit score (e.g., 620) as long as it applies to all applicants.
Not Allowed: Making exceptions only for certain people based on assumptions or personal bias.
2. Income and Employment Verification
You can require tenants to demonstrate sufficient income—typically 2.5x to 3x the monthly rent.
Methods of verification:
- Pay stubs
- Employment letters
- Tax returns (for freelancers/self-employed)
- Bank statements
Allowed: Requiring proof of stable income or employment.
Not Allowed: Refusing someone solely because they receive public assistance (in states where “source of income” is a protected class).
3. Rental History
Landlords may contact previous landlords to evaluate:
- Timely rent payments
- Lease compliance
- Property condition upon move-out
- Eviction history
Allowed: Denying based on documented evictions or lease violations.
Not Allowed: Making judgments based on gut feeling or hearsay without evidence.
4. Criminal History (With Limitations)
Landlords can consider certain types of criminal records, but they must:
- Focus on recent, relevant convictions
- Avoid blanket bans (e.g., “no felons”)
- Ensure decisions are based on actual risk, not stigma
Allowed: Screening for violent or property crimes within a certain timeframe (e.g., last 7 years).
Not Allowed: Rejecting applicants with arrest records only or with unrelated minor offenses.
Tip: Follow HUD’s guidance on individualized assessment of criminal records (2016 memo).
5. Number of Occupants
Landlords may set reasonable occupancy limits based on:
- Unit size
- Local/state housing codes
Allowed: Following HUD’s “2 persons per bedroom” guideline (with some flexibility).
Not Allowed: Restricting families with children or setting arbitrary limits that effectively discriminate.
6. Pets (If Allowed)
You can screen for:
- Type, breed, size
- Vaccination status
- Behavioral history
Allowed: Charging pet deposits or setting breed restrictions (check local laws).
Not Allowed: Rejecting service animals or emotional support animals—they are not considered pets under the law.
7. Valid Identification
Landlords can require:
- Government-issued photo ID
- Valid visa or work permit (if relevant)
Allowed: Requiring ID for identity verification.
Not Allowed: Discriminating based on national origin or immigration status (check state/local laws).
Tenant Screening Criteria That Are Not Legally Allowed
To remain in compliance with federal, state, and local laws, landlords must avoid screening based on protected characteristics.
Prohibited Under the Federal Fair Housing Act:
It is illegal to discriminate based on:
- Race
- Color
- Religion
- Sex (including gender identity and sexual orientation under HUD interpretation)
- National origin
- Familial status (e.g., presence of children)
- Disability
This means you cannot:
- Deny families with children
- Ask about religion or citizenship
- Refuse applicants with service animals
- Charge higher rent to someone based on gender or race
State & Local Protected Classes
Many states and cities offer additional protections such as:
- Source of income (e.g., Section 8, disability benefits)
- Marital status
- Age
- Criminal record (with restrictions)
- Gender identity or sexual orientation (if not already covered federally)
Example: In California and New York, it’s illegal to reject someone because they use a housing voucher.
Always check your local Fair Housing laws.
Best Practices for Legal and Fair Screening
Use a Written Tenant Screening Policy
Define your screening criteria clearly and apply it equally to all applicants.
Include:
- Minimum credit score
- Income threshold
- Disqualifying criminal convictions
- Pet policies
- Required documentation
Apply Criteria Consistently
Never make exceptions based on gut feeling or personal relationships. If you deny one applicant for a 580 credit score, deny others at that level too.
Document Every Decision
Keep records of:
- Application responses
- Screening reports
- Correspondence and decision rationale
This protects you if challenged legally.
Provide Adverse Action Notices
If you deny an applicant based on credit or background, you must provide an Adverse Action Notice under the Fair Credit Reporting Act (FCRA). Include:
- Reason for denial
- Name of the screening company
- Statement of rights
Conclusion
Tenant screening is both an art and a science—but above all, it’s a legal process. Using the right criteria helps you find reliable tenants while staying compliant with fair housing laws.
Stick to objective, clearly defined factors like income, credit history, and rental references—and steer far away from protected characteristics. The result? A more consistent, equitable, and risk-free leasing process.
