What do I need to know about the application process?
In addition to using the EBRHA rental application, an owner must be aware of regulations and best practices that pertain to the application process, including:
- Maximum application fees
- First qualified applicant
- Rental references
- Occupancy guidelines
- Notice of adverse action (application denial)
- House rules
- Insurance
- Recordkeeping regulations
Application Fee
- Maximum allowable application fee an owner can charge in 2020: $50.94 (Not to exceed the owner's out-of-pocket expenses, per Civil Code 1950.6)
First Qualified Applicant
To avoid potential conflicts or fair housing complaints, fair housing organizations recommend that you rent to the first QUALIFIED applicant based on above stated rental criteria.Best practice: Evaluate one application at a time in the order received, and return all unused credit check fees to applicants who were not screened.
Rental References: Questions to Ask
- Did applicant live at your property during the time period indicated? If not what were the dates of occupancy?
- How many times during the past 12 months did applicant pay rent late?
- Was any check from applicant returned due to non-sufficient funds?
- Did you ever file for an unlawful detainer against applicant for unpaid rent? If so, what was the result?
- Did applicant provide notice for ending residency according to the terms of the rental agreement?
- Does this person have an open account with your bank? Can I have a rating?
Occupancy Guidelines
- There are no laws regarding an owner’s ability to limit occupancy standards in a unit, but there are guidelines.
- The Department of Fair Employment and Housing has used a “2 per bedroom plus 1 additional person” as an enforceable standard. Per this standard, a two-bedroom unit could accommodate 5 people (i.e., two in each bedroom + one in the living room).
- Occupancy standards can be challenged, so rental owners should consult with a Fair Housing specialist for more information, an and consider factors like size of the unit.
Notice of Adverse Action
The owner should only deny an applicant when he or she does not meet the objective written standards. If the owner's conditional acceptance or denial is based off information from a credit report, a property owner must provide the applicant with an "Adverse Action" notice.
House Rules
House rules ensure that all residents are aware of the expectations concerning noise, smoking, use of facilities, guest stays, parking, garbage/recycling practices, storage, etc. House rules must apply to all residents equally. You can establish specific house rules for your property through the Rental Agreement Addenda.
Insurance
Owners are encouraged to have insurance for coverage against wrongful eviction especially in Just Cause/eviction controlled jurisdictions. Rent laws in California and the Bay Area make it lucrative for residents to sue owners. Many local eviction ordinances allow residents to recover damages if they prevail in litigation.
Record Keeping Laws
- Keep submitted rental applications, including denied applications, in a lockable file cabinet for at least 5 years. Any notes and associated forms should be clipped to the application.
- Credit reports should be in a lockable file cabinet for 6 years.