No, but you might want to.
If your rentals are in demand and your marketing efforts are attracting many interested applicants, congratulations.
It should also cause you to proceed with care, because accepting applicants out of order, though not illegal, could give the impression of discrimination and may cause legal problems for you.
Your Right to Rent to Qualified Tenants
As a landlord, you have the freedom to choose the “most qualified applicant”, but be careful of appearances.
You are allowed to make decisions based on legitimate business reasons. You have the right to seek information about applicants to give you confidence that they’ll be good tenants and pay their rent in full and on time.
Many landlords, in fact, engage in some degree of tenant screening, which often includes, for example, inquiries into applicants’ credit and criminal history, a review of pay stubs and tax returns, and contacting prior landlords as references.
With any luck, you’ll find applicants who are interested in your rentals and meet your screening requirements.
Accepting Applicants Out of Order Can Lead to Problems
You might think that as far as a landlord’s goal of finding a qualified applicant is concerned, choosing one QUALIFIED applicant over another shouldn’t make a difference. While it’s not illegal to choose one qualified applicant over the other, regardless of the order the applications were submitted, it can lead to the appearance of discrimination.
In fact, the 2012 Fair Housing Handbook of California says on page 24 “The landlord should take the time to check out the information and make a selection based on the first qualified applicant(s).”, although there is no actual statute or law to support this. In California, like many states, it’s recommended but not law.
Choosing tenants in a non-chronological order can lead to fair housing accusations from rejected applicants. Even if you believe an accusation is groundless, the last thing you want is to have to spend time and money defending your actions and clearing your good name.
The Fair Housing Act, a federal law that applies to rental housing across the United States with few exceptions, bars discrimination based on the following seven protected classes:
- national origin
- familial status
Many states and municipalities have their own housing discrimination laws that include additional protected classes, such as sexual orientation, age, or source of income.
Inclusion or Exclusion, it’s Still Discrimination
If a landlord finds a qualified applicant but chooses to rent to someone who’s not qualified because he prefers that person’s race or religion, for example, that’s a clear fair housing violation.
It’s also illegal if both applicants in question are qualified but a landlord chooses the one who applied later for this type of discriminatory reason. (See relevant sections of the Fair Housing Act and its regulations at 42 U.S.C. Sec. 3604(a) and (d) and 24 C.F.R. Sec. 100.50(b)(1),(3) and (5); 24 C.F.R. Sec. 100.60(b)(1),(2) and (4); 24 C.F.R. Sec. 100.70(d)(3); 24 C.F.R. Sec. 100.80.)
It Doesn’t Have to Be Intentional
You might think that as long as you’re fair-minded and don’t intentionally discriminate, you have nothing to worry about when it comes to the order in which you accept qualified applicants.
However, many landlords unwittingly invite discrimination claims through inconsistent policies such as accepting qualified applicants in a non-chronological order.
An applicant who discovers that a landlord rejected her in favor of a later applicant might jump to the conclusion that it’s because of her religion, sex, or other protected class status and not think twice about filing a fair housing compliant against the landlord.
Consistency Is Key
Consistency is one of the best strategies a smart landlord can follow when it comes to fair housing compliance.
Being consistent means treating similarly situated people the same way, such as by processing applications in the order in which you receive them (or in another manner that’s fair and consistent, as long as you identify it in a written tenant selection plan and carefully document your adherence as you go along).
Following consistent policies helps ensure that you don’t violate fair housing laws. Plus, in the unlikely event that an applicant questions a rejection or accuses you of discrimination based on the order in which you accepted applicants for your apartments, you’ll be able to defend yourself by pointing to your history of following a fair, consistent policy.
If you have multiple applicants, all of whom qualify for the unit, you are allowed to choose the most qualified applicant based on income, credit, references, and other business reasons.
However, accepting applicants out of the order in which they submitted applications can lead to the appearance of discrimination based on race, color, religion, national origin, sex, disability, and familial status. It can be costly to defend a false accusation in court, and therefore you should try to accept applicants in order whenever possible.