Finding a place to live is hard. Being denied an Apartment Rental application makes the search harder and more expensive. (Those non-refundable application fees can really add up.) You need to know why your application was denied so that you can fix what is wrong to keep it from happening again. While you have the legal right to this information, most likely you did not get it.
As explained by the CFPB:
Federal law requires a landlord who denies your tenant application, due to information in a tenant screening report, to inform you of that fact.
The Fair Credit Reporting Act provides you with rights as both a rental applicant and a tenant. This federal law requires a landlord, who rejects or denies your tenant application due to information in a tenant screening report, to inform you of that fact. This notification is called an “adverse action” notice, and it must:
- Be given in writing, orally, or electronically.
- Provide the name, address, and phone number of the company that provided the report.
- Notify you of your right to a free copy of the report if you request it within 60 days of the adverse action.
- Explain your right to dispute inaccurate information.
An adverse action not only includes being denied a rental, it could also include:
- Requiring a co-signer on the rental agreement or lease.
- Requiring a larger deposit or a higher rent payment than other applicants.[1]
What are Tenant Screening Reports?
The tenant background check industry creates reports that include extensive personal information, such as credit history, civil and criminal records, and credit scores, as well as the proprietary risk scores on which many landlords and property management companies base their decision to rent to a prospective tenant.[2] The CFPB has a list of the major tenant screening agencies, where you can request a copy of your tenant screening report.
What are Some Common Problems with Tenant Screening Reports?
- Tenant background check content for landlords has questionable relevance, particularly given the lack of rental payment history: Prior rental payment history is overwhelmingly not reflected in the reports or algorithmic risk scores assigned to tenants. Industry estimates of the coverage of rental payment history in the consumer reporting system range between 1.7% to 2.3% of U.S. renters.
- As corporate landlords have increased their rental holdings, the demand for digital, algorithmic scoring of prospective tenants has increased: The automated property management systems with centralized databases relied on by corporate landlords and private equity firms substitute a single algorithmic score for the more nuanced and holistic evaluation of prospective tenants done historically by smaller landlords and property managers.
- Renters pay for the reports, but often do not see them, and struggle to get errors fixed: A reported 68% of renters pay application fees when applying for rental housing. These fees are often used to pay the cost of tenant background check reports. But renters often have little to no visibility into the information they contain prior to a rental decision being made, and they have little recourse when the information is wrong, misleading, or old. Renters who attempted to correct their reports found they could not get them corrected, and even had the same bad information show up on future tenant background check reports.
- Market dysfunctions result in companies selling erroneous data to landlords: Tenant screening companies appear inclined to include negative information on a report even if that information might be inaccurate. The tenant scores produced for landlords make decision-making easy, but the social scores can hide data errors and magnify the negative impact of erroneous and outdated information.
- Renters often do not receive adverse action notices, a legal right for renters: Many landlords do not consistently inform prospective tenants of their right to dispute information in reports or provide them the information necessary to do so, as required by the Fair Credit Reporting Act. Without these notices, renters may remain unaware that a version of their tenant background check report was pulled and unable to address any errors on the report.[3]
How We Can Help You
Chances are good that the apartment complex that rejected your application and keeping your deposit, did not provide you with the adverse action letter required by law. You need the letter to find out what report the landlord relied on. We can help you get that information. Mor importantly, WE CAN HELP YOU FIX ANY ERRORS on the report. We can also bring suit against the apartment complex for failing to provide you with an adverse action letter.
We work on a contingency basis such that we only get paid if we win or settle your case. Under the Fair Credit Reporting Act, we can force the defendants we sue on your behalf to pay our attorney’s fees and costs. Please call, text, or email us today for a free consultation.
[1] https://www.consumerfinance.gov/ask-cfpb/what-should-i-do-if-my-rental-application-is-denied-due-to-a-tenant-screening-report-en-2105/
[2] https://www.consumerfinance.gov/about-us/newsroom/cfpb-reports-highlight-problems-with-tenant-background-checks/
[3] Supra n. 2.