As you know, we are doing a lot of lease business in this market. In that context, we often find ourselves being asked by a prospective tenant why their lease application was denied. Please understand that this can be a very problematic conversation and you have to be very careful how you respond. After all, the Fair Housing Laws apply to rental properties and, as a result, the landlord cannot discriminate against a potential tenant based on their membership in a protected class. As a result, discrimination in a leasing decision based on gender, religion, age, familial status, race, sexual preference or national origin is illegal. These problems can come up in obvious and not so obvious ways. For example, not wanting to rent to a family with small children could be seen as familial status discrimination. Similarly, we recently had a lease listing near a university, but the landlord did not want to rent to students. While I don’t think that is familial status discrimination, the contrary argument could be made. Also, even if not a factor in your landlord’s decision, the prospective tenant’s membership in a protected class could cause sensitivity. So, even if a denial has nothing to do with my religion or sexual preference, if I have been subject to discrimination before, I might not believe your explanation.
As a result, if you are the listing agent, and a lease application is denied, please be very careful when you talk to the prospective tenant. When asked for an explanation as to why the application was denied, you should answer in one of two ways. First, and preferably, tell the tenant that you don’t know. Try to avoid getting an explanation from your landlord thereby allowing that answer. You are not obligated to ask the landlord for her rationale and, in that case, saying “I don’t know” is a truthful response and cannot be misconstrued. Next, if you have been told why the application was denied , and even if it was for purely financial reasons and was not discriminatory (which it should always be), still try not to give a reason. That is where problems come from. Instead, tell the tenant that the decision was made by the landlord and not you. Try to leave it at that. If pushed, just say you can’t talk about it. But stay away from explanations. They are the only way to get you, or your client, in trouble.
As always, please let us know if you have any questions
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