Can a Landlord Accept Multiple Applications?

Last Updated: October 18, 2023 by Cameron Smith

Landlords can legally accept multiple applications, and it’s also considered best practice. By accepting many applications, landlords give themselves the best chance of finding a great tenant or to have a backup in case an accepted applicant drops out.

Why Should a Landlord Accept Multiple Applications?

Average rent across the U.S. has surpassed $2,000 per month, which means that landlords are usually in a hurry to fill any vacancies they have. However, evictions generally cost between $3,500 and $10,000, so a landlord’s biggest priority is to find a good tenant and keep them in the property for a long time.

Even if accepting multiple applications means the landlord might have to wait an extra week to fill the unit, it’s often worth it to find that top-level tenant.

When Wouldn’t a Landlord Accept Multiple Applications?

In general, landlords usually want many applications, but there are a few reasons why this may not be the case:

1. The landlord is renting to a friend or family member – There’s not really any reason to accept other applicants in this situation. In fact, it’s a bad idea to open up and accept applications if you already know who you’re renting to. Someone much more qualified than your friend or family member may apply and try to sue you when rejected.
2. The first applicant is absolutely perfect – It’s still a good idea to accept multiple applicants even if that first one is perfect. However, if you only receive the one application the first few days and you complete the screening process, there’s no reason to keep it open just for the sake of having multiple applicants to choose from.
3. The landlord wants to keep screening costs down – In most cases, landlords will pass on screening costs to applicants. However, some states prohibit this or have a maximum amount that can be charged. Also, landlords may wish to keep application fees low to entice more applicants. In these cases, the more applicants the landlord screens, the more expensive it is.
4. The landlord wants to avoid discrimination issues – Each applicant that gets denied opens the door for a discrimination lawsuit. Landlords who keep good records and have documented standards for rejecting applicants usually won’t have any real issues.

Legitimate Reasons for Denying an Application

When denying an application, landlords can’t use whatever criteria they would like. There are discrimination laws and other regulations that set forth certain stipulations for rejecting applications.

Here are some of the most common reasons to legitimately deny an application:

• Debt-to-income ratio is too high
• Can’t verify income
• Poor credit history
• Has filed for bankruptcy
• History of late payments
• Prior evictions
• Prior convictions
• Provided false information
• Won’t do a background check
• Evidence of illegal activity
• Does not agree to your rental terms
• History of damaging property
• Smokes
• No rental history
• Incomplete rental application
• Has a pet
• Bad review from reference
• Poor job history
• Moves frequently
• Too many vehicles
• Intends to run a business from the rental property
• Belligerent or disrespectful
• Too new to the area

As a landlord, it’s best if you can document a valid reason for denying an application. Typically, those reasons above qualify, but not always.

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How to Avoid Discrimination When Rejecting Applicants

The Fair Housing Act (FHA) sets forth a list of protected classes. A landlord cannot reject an applicant based on anything related to one of these protected classes.

Here’s the list of protected classes:

• Race
• Color
• National Origin
• Religion
• Sex (including gender identity and sexual orientation)
• Familial Status (including marital status, pregnancy, and number of children)
• Disability (including owning a service animal)

Find a Legitimate Reason for Rejecting Applicants

The best way to avoid discrimination is to be sure that you have a legitimate reason for denying an application and to document it. For example, if someone has prior evictions or low income, you’re just fine to deny their application.

However, if they have seven children and the landlord is worried they’ll cause property damage, that’s not a legal reason to deny an application.

Keep Documentation of Rejected Applicants

For every applicant that you reject, there are two things that you should do:

1. Keep a record of why you rejected an applicant.
2. Notify the applicant of why you rejected them.

The first will help you when working with an upset applicant or if you’re taken to court for discrimination. The second will help nip potential lawsuits in the bud by giving a legitimate reason they were denied.

Another good practice is to document your minimum requirements and stick to them. For example, you could have a document for your reference that says you require at minimum:

• 600 credit score
• 40% debt-to-income ratio
• No tolerance on evictions
• No tolerance on violent felonies

You can add much more to this list, but it’s another good way to avoid discrimination if you can show that you have this document and that the person you denied fell below one of your criteria.

Always Comply with the Fair Credit Reporting Act (FCRA) When Rejecting Multiple Applications

When receiving multiple applications, landlords will also have to deal with rejecting applicants based on items found in a consumer report or run the risk of being fined for violating the FCRA. In this case, consumer reports come in the form of credit reports, rental history, criminal background checks, eviction history, reference checking reports, and more.

One piece of the FCRA specifically details that if a landlord takes an “adverse action” against an applicant for something found in a consumer report that they must give them written notice.

An adverse action includes the following:

• Denying an application
• Requiring higher rent
• Requiring higher deposit (or any deposit if other applicants would not be required to supply one)
• Requiring a co-signer

When notifying an applicant of an adverse action, the notice must contain the following:

• Contact information of the consumer reporting company that put together the report.
• Statement that the consumer reporting company did not choose to take the adverse action and cannot speak to why the landlord chose to do so.
• Notice that the applicant has the right to dispute the report and request a copy within 60 days.

Choose From Multiple Qualified Applications on a First-Come, First-Serve Basis

When sorting through multiple applications for a property, it’s likely that a landlord will be able to narrow down the applicants to just a few. There’s a good chance that all of these remaining applicants could be great tenants.

Now, how can a landlord avoid discrimination lawsuits when faced with rejecting qualified tenants, especially if the one picked isn’t more qualified?

The best practice to choose between tenants is to pick the applicant that applied first. This is seen as a legal reason to have picked the applicant, as long as all else remains equal.

If a landlord picks someone other than the first applicant in this situation, they can legitimately ask why they weren’t picked. As it’s standard practice to use first-come, first-serve among equally qualified candidates, they could easily make an argument that the landlord “just didn’t like them” or even conjure up a discrimination charge.