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Tenant Rejection Letter | Adverse Action

A tenant rejection letter is a formal document given by a landlord to a person that applied to rent an apartment, home, or other residential property to inform them that they were not accepted. It must be issued to the tenant if their denial was influenced by results from a consumer credit report. The form provides the tenant the exact reason they were rejected, a statement that protects the issuer of the report (used for denying the tenant), and information regarding their right to dispute and acquire a copy of the report.

Contents

Versions (3)

Version 1 – eSign

Download: Adobe PDF, MS Word (.docx), OpenDocument (.odt)

 


Version 2 – TransUnion

Download: Adobe PDF

 


Version 3 – General Template

Download: Adobe PDF

 


What is a Tenant Rejection Letter?

A tenant rejection letter is a relatively simple form that provides tenants with official documentation after being denied the right to lease residential property. Landlords are required by law to provide tenants with the form if they ordered a consumer report anytime during the application process. A consumer report is an official record that a landlord can request on a tenant; it can include background information regarding criminal, rental, employment, and/or credit history. The law that requires landlords to use tenant rejection letters is the Fair Credit Reporting Act (FCRA) and is enforced by the Federal Trade Commission (FTC).

As stated by the FTC’s article on adverse action, the form must be used even if information from the report wasn’t the main reason for the tenant’s rejection.

What Must it Include?

In order to be deemed as sufficient by the FTC, it must include the following:

  • The contact information of the reporting company used (for the background check). This needs to include the reporting company’s name, address, and phone number.
  • A formal statement saying the company that ran the report for the landlord was not involved in the decision to deny the tenant, and that they can’t provide any reasons for it to the tenant.
  • Information that states the applicant has the legal right to dispute the accuracy or completeness of the report (or any other information provided by the reporting agency regarding the applicant), and that they can acquire a free report from the company so long they request it within 60 days.

So long the information above is included, the letter can be customized to meet the preferences of the landlord or property manager.

Valid Reasons for Rejecting a Tenant

Prior to listing what a tenant can be rejected for, it’s equally important to know what factors they cannot be denied for. As stated by the Fair Housing Act (FHA), a landlord cannot deny an applicant because of their:

  • Race
  • National Origin
  • Color
  • Disability
  • Religion
  • Sex
  • Familial Status
  • Disability

Examples of what a landlord can lawfully reject a tenant for include:

  • They smoke;
  • They have poor references;
  • They have a too-low credit score;
  • They didn’t complete the rental application in-full;
  • They lied on the application;
  • They don’t have any rental history;
  • They don’t earn enough money;
  • Their income can’t be verified;
  • They have a history of not paying rent;
  • They have a history of damaging rental properties;
  • They have a criminal record; and
  • They’ve been evicted before.

Landlords can aid in protecting themselves from liability by screening each applicant in an identical way. A rental application template is the most common way of doing this. By using the same template for each person, they can easily compare applicants based on attributes that don’t discriminate on any of the eight (8) factors listed above.

How to Write

Download: Adobe PDF, MS Word (.docx), OpenDocument (.odt)

Step 1 – Lease + Tenant Information

Start by writing the date of rejection. The landlord should attempt to deliver the letter as close to the rejection date as possible. On the next line, write the first and last name of the applicant. The landlord can establish the details of what the applicant was applying for in the grey box. Enter the:

  • Address of the property;
  • Monthly rent ($);
  • Security deposit ($); and
  • Lease term (in months).

Step 2 – Reason for Rejection

Providing information on why the tenant was rejected is a common courtesy, and lets them understand where they can approve upon prior to applying for other rentals. Place a checkmark in the corresponding box next to each application reason.

Step 3 – Sign it

Signing the letter adds to its formality, and makes it a legally-official decision from the landlord. The signature can be handwritten or signed electronically using eSign. Once completed, the letter can be delivered, mailed, or emailed to the applicant tenant.