Tenant Qualifying Standards
Lawful Requirements All Tenants Must Meet
Tenant qualifying standards are lawful requirements that all tenants must meet in order to rent your property. They are standards that should be part of the screening process for every prospective tenant at your rental property. Just because a prospective tenant passes the qualifying standards, does not mean they will go on to be an actual tenant. These are the minimums tenants must meet in order to reside in one of your units.
Same Standards for All:
You do not want to be accused of discrimination. Therefore, you must have the same qualifying standards for all prospective tenants.
It is illegal to alter these requirements or have different requirements because of someone’s age, race, gender, religion or any other characteristic protected under the Federal Fair Housing Act. For example, it would be illegal to have a qualifying standard that the tenant cannot have any children because this would be discrimination against families.
Examples of Qualifying Standards Include:
Qualifying standards allow you to screen tenants according to the same basic criteria. Every landlord may have slightly different qualifying standards, and that is fine, as long as the standards are not in violation of any laws. Here are some examples.
- Maximum Number of People Per Apartment- For safety purposes, there is a maximum number of people that can reside in each rental unit. This is usually contingent upon the number of bedrooms a unit has and your local fire codes. Two people per bedroom is a general rule of thumb. So, for a two bedroom apartment, you can have a maximum occupancy of four people, unless your local code says otherwise.
- Copy of Valid Photo ID- You want to make sure the tenant is who they are claiming to be. One way to do this is to ask for a valid government issued photo identification card. On a driver's license, you will be able to verify their current address and their date of birth.
- Income Verification– You want to make sure that the tenant is actually bringing in the income they claim to be. You can verify this income by asking for W-2's, copies of pay stubs or copies of bank statements.
- Sufficient Income Level- You can require that all tenants have a monthly income of at least ‘X’ times greater than the monthly rent. You just have to make sure this requirement is the same for all tenants.
The income requirement will change based on the price of the rental. For example, if you are requiring an income level of two times the monthly rent, for a rental that is $1,000 a month, the tenant must have a monthly income of at least $2,000, but for a $2,000 a month rental, the income must be at least $4,000 a month.
- Employment Verification- You want to verify that the tenant works where they claim to work, that they make the amount they claim and that they are employed for the foreseeable future. You can send a written notice to the tenant's place of employment requesting this information.
- Credit Checks Will Be Run on All Applicants- A credit check can help you determine if there is sufficient debt that could affect a tenant’s ability to pay their rent on time or if they have a generally poor credit history. The tenant must provide written consent to run the credit check.
- No History of Evictions- A credit check can inform you if the tenant has been involved in any legal issues, such as an eviction. You want tenants who are going to pay their rent and stay for their entire lease term.
- No Criminal History- A background check can turn up any history of criminal activity. This is important because you do not want to place a tenant in your building who is a threat to the safety of the other tenants.
- Security Deposit of ‘X’ Amount Required- The amount you can request will differ based on your state laws.