Denying a Rental Applicant in Arizona: What You Must Tell Them, and When
When dealing with rental applications in Arizona, landlords must ensure that they follow the proper procedures to deny a tenant application legally. This guide will walk you through the necessary steps, including providing an Adverse Action Notice and adhering to specific timing requirements.
Permitting, Zoning, or Statutory Basis
In Arizona, landlords must comply with state and local zoning laws when renting properties. However, there is no specific statute that governs the denial of rental applications directly. Instead, landlords must adhere to federal and state fair housing laws, such as the Fair Credit Reporting Act (FCRA), when making decisions based on credit reports.
The FCRA requires landlords to provide a notice of adverse action within three business days if they deny an application based on credit report information. This notice must include specific reasons for denial and give the applicant a reasonable period to dispute the decision.
Lease Clauses, Notice Periods, and Timing Requirements
When denying a rental application in Arizona, landlords must provide an Adverse Action Notice within three business days of the denial decision. This notice should be in writing and must include:
- The name, address, phone number, and email address of the landlord.
- A statement that the application has been denied.
- The specific reasons for denial, including any information from credit reports or other sources used to make the decision.
- A statement that the applicant has the right to dispute the denial within three business days of receiving the notice.
- A statement that the applicant can request a free credit report from one of the major credit bureaus if they dispute the denial.
The notice must be sent to the applicant’s last known address, as provided on their application. If the applicant has not provided a valid address or if the landlord is unable to locate the applicant, the notice must be sent via certified mail with a return receipt requested.
Defensible Record-Keeping & Compliance Checklist
To ensure that your rental application denial process is defensible and compliant with Arizona law, follow these steps:
- Review Application: Carefully review the applicant’s application and any supporting documents to ensure that all information is accurate and complete.
- Credit Report Check: If you are using credit report information to make a denial decision, ensure that the reports are accurate and up-to-date. Landlords must obtain credit reports from one of the major credit bureaus (Equifax, Experian, or TransUnion) and must adhere to the FCRA.
- Document Reasons for Denial: Keep a detailed record of the reasons for denying the application, including any information from credit reports or other sources used to make the decision.
- Provide Adverse Action Notice: Within three business days of making a denial decision, provide an Adverse Action Notice to the applicant in writing. The notice must include all required information and be sent to the applicant’s last known address.
- Keep Records: Maintain all records related to the rental application denial process, including copies of the applicant’s application, credit reports, and any correspondence with the applicant. These records must be kept for at least six years after the denial decision.
- Respond to Disputes: If the applicant disputes the denial, respond promptly and provide any additional information or documentation requested by the applicant.
- Follow Up: Follow up with the applicant to ensure that they have received the Adverse Action Notice and any additional information or documentation requested.
By following these steps, landlords can ensure that their rental application denial process is defensible and compliant with Arizona law. Remember to always adhere to federal and state fair housing laws, such as the FCRA, when making decisions based on credit report information.