Tenant Screening Laws Every Landlord Should Know

The FCRA is the primary federal law governing tenant background checks. It applies whenever a landlord orders a consumer report — including a credit report, criminal background check, or eviction history — from a consumer reporting agency (CRA).

Before ordering a report, you must provide the applicant with a clear written disclosure that a consumer report may be obtained, and obtain their written authorization. You cannot order a background check without the applicant's consent.

If you take adverse action — such as denying a rental application — based in whole or in part on information in a consumer report, you must follow the FCRA's two-step adverse action notice process. This includes providing the applicant with a copy of the report and a summary of their FCRA rights before taking action.

The Fair Housing Act prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, and disability. These are federal protected classes. Many states and cities add additional protected classes, such as source of income, sexual orientation, and gender identity.

Tenant screening criteria must be applied consistently to every applicant. A policy that is neutral on its face but has a disparate impact on a protected class can still violate the Fair Housing Act. For example, a blanket policy of rejecting all applicants with any criminal record has been found to have a disparate impact on certain racial groups.

Document your screening criteria in writing and apply them uniformly. If you deviate from your criteria for one applicant, you must be able to justify that deviation in non-discriminatory terms.

Beyond federal law, many states and cities have enacted tenant screening laws that go further than federal requirements. These laws vary significantly by jurisdiction and are changing rapidly.

Some states limit how far back a landlord may look at criminal history — for example, restricting consideration of convictions older than seven years. Others require an individualized assessment before denying an application based on criminal history.

Several jurisdictions restrict the use of eviction records, particularly evictions that were filed but not adjudicated, or evictions that occurred during the COVID-19 pandemic. Some cities have enacted "just cause" eviction ordinances that also affect screening criteria.

Always check the laws in your state and city before implementing a screening policy. When in doubt, consult with a qualified landlord-tenant attorney.

Many states regulate the application fees landlords may charge prospective tenants. Some states cap application fees at the actual cost of the background check and credit report. Others require landlords to provide applicants with a copy of the screening report if the application is denied.

Keep receipts and documentation of your actual screening costs. If your state caps application fees, make sure you are not charging more than the cap allows.

A compliant tenant screening process starts with a written screening policy that specifies your criteria, applies them consistently, and documents your decisions. Use a reputable, FCRA-compliant background check provider that supplies the required disclosure and authorization forms.

Train anyone involved in the screening process — property managers, leasing agents, assistants — on your policy and the applicable legal requirements. Keep records of every screening decision, including the criteria applied and the reason for any denial.

Review your screening policy at least annually. Laws change, and a policy that was compliant last year may not be compliant today.