How to Screen Tenants Without Getting Sued
The Fair Housing Act draws a hard line between smart screening and illegal discrimination. Here is what you can ask, what you can check, and what to never put in writing.
The Legal Framework: Fair Housing Act Basics
The federal Fair Housing Act prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, and disability. Most states add additional protected classes: source of income (Section 8 vouchers), sexual orientation, gender identity, age, and marital status. New York City has over 17 protected classes. The law applies to advertising, application questions, screening criteria, and rejection decisions. Violations can result in HUD complaints, civil lawsuits, and damages that include compensatory damages, punitive damages, and attorney fees.
The key legal principle: you can screen aggressively on financial and behavioral criteria, but those criteria must be applied consistently to every applicant. Document everything.
Build Written Screening Criteria Before You List
The single most important thing you can do is establish written screening criteria before you accept the first application. These criteria create a paper trail showing you applied the same standards to every applicant. Your criteria should specify minimum income (typically 2.5-3x monthly rent), minimum credit score (typically 620-680), rental history requirements (no evictions in X years), criminal background policy, and employment verification requirements.
Once written, your criteria must be applied uniformly. If you waive the income requirement for one applicant, you must be prepared to explain why — and be sure it was not based on a protected characteristic. Keep rejected applications on file for at least three years.
What You Can and Cannot Ask
You can legally ask about and verify: income and employment, rental history and landlord references, credit history, criminal background (with important limitations), number of occupants, and move-in date. You cannot ask about: race, national origin, or where someone is from, religion or religious practices, disability or medical history, familial status or whether someone has children, sexual orientation or gender identity, and in source-of-income protected jurisdictions, whether someone has a housing voucher.
Criminal background screening requires particular care. HUD guidance warns that blanket criminal history bans may violate the Fair Housing Act through disparate impact. Best practice: conduct individualized assessments considering the nature of the crime, how long ago it occurred, and evidence of rehabilitation. Many jurisdictions now prohibit inquiring about criminal history before a conditional offer is made.
Running Credit and Background Checks Legally
You must obtain written consent before running any credit or background check. Use a compliant tenant screening service — FCRA-compliant providers include TransUnion SmartMove, RentSpree, Buildium, and AppFolio. Screening fees must not exceed your actual cost in most states. If you reject an applicant based on a credit report or background check, the Fair Credit Reporting Act requires you to provide an adverse action notice identifying the reporting agency used.
What to look for in a credit report: payment history, collections (especially prior landlords or utilities), outstanding debt load relative to income, and public records including evictions and judgments. A 580 credit score does not automatically disqualify someone — evaluate the full picture. A 750 score with a prior eviction judgment is a bigger red flag than a 620 score with a clean payment history.
The Application Process: Documentation Best Practices
Require a written application from every adult who will occupy the unit. Verify everything — call employers, call prior landlords (not just the current one — the current landlord may provide a glowing reference to get rid of a problem tenant), and confirm pay stubs against tax returns for self-employed applicants. When you make a decision, document why. When you reject an applicant, provide the legally required notices and retain your documentation. If you ever face a fair housing complaint, your records are your defense.