Can landlords deny applicants with prior evictions?

Tenant Screening and Prior Evictions: Guidance for New Jersey Landlords

When screening prospective tenants, one common concern landlords face is how to handle applicants with prior evictions on their rental history. In New Jersey, landlords must balance the legitimate need to protect their property and income with the state's legal framework designed to prevent discrimination and unfair tenant selection practices. Understanding how eviction records can influence tenant-screening decisions is crucial for New Jersey landlords aiming to comply with state laws while maintaining effective rental operations.

Can New Jersey Landlords Deny Applicants with Prior Evictions?

Yes, New Jersey landlords are legally permitted to consider an applicant’s prior evictions when deciding whether to approve a rental application. A history of eviction often signals to landlords potential risks such as non-payment of rent or lease violations, which are legitimate concerns in tenant screening.

However, landlords must apply this consideration fairly and in compliance with relevant state laws, including the New Jersey Law Against Discrimination (NJLAD) and the Fair Credit Reporting Act (FCRA) when screening tenants.

Key Points About Denying Based on Prior Evictions in New Jersey:

• Permissible Screening Factor:

Prior evictions are considered negative rental history, and New Jersey landlords may lawfully use this information as grounds for denial.

• Consistency Is Crucial:

Landlords should apply eviction history policies consistently across all applicants to avoid claims of discrimination.

• Consider the Context:

While eviction history can be a legitimate reason for denial, landlords are encouraged to consider the circumstances of the prior eviction, including how long ago it occurred and whether the applicant has taken steps to remedy past issues.

• Follow Fair Screening Practices:

Use written rental criteria that clearly state that eviction history is part of the screening process. This helps ensure transparency and reduces subjective decision-making.

Legal Considerations for Using Eviction Records in Tenant Screening

1. The New Jersey Law Against Discrimination (NJLAD)

The NJLAD prohibits discrimination in housing on the basis of protected characteristics such as race, religion, national origin, gender, disability, familial status, sexual orientation, and source of lawful income, among others.

• Eviction History Cannot Be a Proxy for Discrimination:

Landlords must ensure that eviction history is not used in a manner that disproportionately excludes applicants based on protected characteristics. For example, blanket policies that reject any applicant with an eviction without regard to circumstances could lead to disparate impact claims if such policies disproportionately affect protected groups.

• Source of Income Protections:

New Jersey law protects tenants who use lawful sources of income, such as Section 8 vouchers or other public assistance. A prior eviction that was not related to payment issues should not be used to reject a qualified applicant using protected income sources.

2. The Fair Credit Reporting Act (FCRA)

If landlords use a third-party background check service to obtain eviction records, they must comply with the FCRA’s requirements:

• Disclosure and Consent:

Landlords must provide the applicant with a clear written disclosure that a background and credit check will be performed and obtain written consent before doing so.

• Adverse Action Procedures:

If the landlord denies an application based on information from a consumer report (including eviction history), they must provide an adverse action notice. This notice informs the applicant of the denial, the name of the reporting agency, and the applicant’s right to dispute the information.

• Verification and Accuracy:

Since eviction records can sometimes contain errors, landlords should verify the accuracy of the information before taking adverse action based on it.

Best Practices for New Jersey Landlords When Screening Applicants with Evictions

To ensure fair and legally compliant screening processes, New Jersey landlords should consider the following best practices:

• Develop Clear Rental Criteria:

Include eviction history policies in your tenant screening criteria and share these with all applicants at the outset. For example, specify whether any eviction within the past 3 to 5 years will result in automatic denial or whether exceptions apply.

• Conduct Individualized Assessments:

Evaluate each applicant holistically rather than denying based solely on eviction history. Consider factors such as: - How long ago the eviction occurred - The circumstances surrounding the eviction (e.g., COVID-19 related non-payment vs. chronic non-compliance) - Efforts made by the applicant to reestablish credit and rental stability

• Document the Decision-Making Process:

Maintain records of applications, screening results, and reasons for denials to protect against discrimination claims.

• Communicate Clearly:

Inform applicants promptly of denials and comply with adverse action notification requirements when using consumer reports.

• Stay Informed on Local Ordinances:

Some municipalities in New Jersey have additional tenant protections or screening regulations. Verify whether local rules impact your screening criteria, particularly regarding eviction consideration.

Conclusion

In New Jersey, landlords are allowed to deny rental applicants with prior evictions as part of a lawful tenant screening process. However, this must be done in a careful, consistent, and transparent manner that respects anti-discrimination laws and fair screening standards.

By developing clear policies, performing individualized assessments, complying with FCRA requirements, and maintaining documentation, landlords can effectively manage risk while treating applicants fairly and in accordance with New Jersey law. This balanced approach helps ensure a positive rental experience for both landlords and tenants.