Hi all,

Hoping someone can set me on the right path. I have an applicant that I plan to accept, with an increased SD. Everything came back fine on their eviction and credit report, but when I verified rental history with previous landlord, they disclosed lots of late payments for one of the applicants.

I have had to send an adverse action letter before, but typically it has been due to one of the reports pulled - not essentially a reference.

1) Do I still need to provide a letter in this case?

2) If so, does it still need the info of the Credit reporting agency? Most adverse letter templates contain the number of the credit reporting agency, so tenant to request a copy and dispute any inaccuracies. In this case, they would pull a perfect report.

I'm only aware of the law requiring an adverse action letter when the information used to deny or alter the terms comes from a credit reporting agency. Info from private landlords are not included. Neither is the criminal background or any other reference you choose to pull (i.e. social media, employer, personal reference), to my knowledge.

Odd that they paid rent late but everything else on time. In my experience, typically it's the other way around...at least according to the applicant. "I know my credit is terrible, but I always pay rent on time!"

Sid,

Something along that line, yes.

Now I will say this... the more "traceable" you make that conversation the better, especially if the applicant(s) in question are a member of a protected group. Even though your reasoning may be fully legit and within the boundaries of what is permitted, an upset applicant can always throw a fuss and decide to register a complaint. Be sure to dot your i's and cross your t's about everything to prove that you were not making the decision based on anything other than the info about late pays from the landlord. Have a copy of a letter, an email, or a ledger from the past landlord showing the pattern of late pays. Something to CYA if you ever end up having to explain your actions.

The last thing we want to do is end up in front of a judge in a "he said, she said" situation over a FHA complaint. For that reason, some landlords won't do an increased deposit because even when you have evidence that it's legit, they don't want to risk any complaint that they treated someone "differently", even if it's warranted. I understand where they're coming from, but as I do double deposits frequently for 1st time renters or folks with spotty credit--including people who DON'T qualify under any protected classes--I can easily show a pattern of business that proves I treat everyone fairly based on our written qualifications.

James, did that LL say they were an otherwise fine tenent would rent to them again? If you are interested in moving forward ask the prospect why they were late w/ rent and see if they have a solid answer. Don't share all you know at first and see if they admit to being late 10 times.