Can landlords deny applicants with prior evictions?

Tenant Screening and Prior Evictions: What South Dakota Landlords Need to Know

When screening tenants, one of the most common questions landlords have is whether they can deny applicants based on prior eviction records. As a landlord operating in South Dakota, it is important to understand the legal landscape and best practices around tenant screening, especially when it comes to applicants with a history of eviction. This guide provides a clear overview of how South Dakota landlords can handle this aspect of tenant screening responsibly and in compliance with applicable laws.

---

Can South Dakota Landlords Deny Applicants with Prior Evictions?

Yes, South Dakota landlords may deny rental applications based on prior evictions. In fact, a history of eviction is often considered a valid reason to decline an applicant because it may indicate a higher risk for non-payment or lease violations. However, landlords need to approach this screening criterion carefully to avoid potential legal pitfalls, including claims of discrimination.

---

Legal Considerations for Denying Applicants with Evictions

1. Fair Housing Laws

South Dakota landlords must comply with federal and state fair housing laws that prohibit discrimination based on protected characteristics such as:

• Race
• Color
• National origin
• Religion
• Sex
• Familial status
• Disability

When denying an applicant due to a prior eviction, the rejection must be based purely on the eviction’s relevance to tenancy rather than any protected characteristic. For example, if a landlord consistently rejects applicants with evictions but applies this rule uniformly, this practice generally complies with fair housing laws.

2. The Use of Consumer Reports and Background Checks

When screening tenants, landlords often rely on consumer reports, which may include eviction history. Under the Fair Credit Reporting Act (FCRA), landlords must:

• Obtain the applicant’s written permission before running background or credit checks.
• Provide an “adverse action notice” if they deny the applicant based on the information in the report, including explaining the reason and providing the contact details of the reporting agency.

Failing to follow these procedures can lead to legal consequences.

---

Practical Guidance for South Dakota Landlords on Screening Evictions

Evaluate the Eviction Context and Timing

Not all evictions carry the same weight. Consider:

• How recent the eviction was: An eviction from many years ago may hold less relevance than one that occurred within the past year or two.
• The reasons behind the eviction: Evictions for non-payment of rent might indicate financial instability, whereas evictions due to lease violations unrelated to payment might require more scrutiny.
• Mitigating circumstances: Applicants who can demonstrate that they have addressed the underlying issues (e.g., improved credit, steady income) should be considered carefully.

Develop Consistent Screening Criteria

Create written tenant screening policies that clearly outline how eviction history is evaluated. Consistency helps reduce the risk of claims related to discriminatory or unfair practices. Key points to include:

• Time limits for considering eviction records (e.g., only within the past 3-5 years)
• Clear definitions of what types of evictions will lead to automatic denial versus those that warrant further review
• Incorporation of other screening factors such as income verification, credit score, employment stability, and references

Use a Holistic Approach

Relying solely on eviction history may exclude otherwise qualified tenants who have taken steps to improve their situation. It’s a best practice to evaluate the entire application package, including:

• Income verification (ideally, income at least 2.5 to 3 times the monthly rent)
• Credit history and scores
• Landlord references
• Criminal background check (if permitted and relevant)

Such a thorough approach ensures more informed decisions and minimizes risk.

---

Writing Rejection Notices for Applicants with Prior Evictions in South Dakota

If you decide to deny an application based on an eviction record obtained through a tenant screening report, comply with the FCRA by providing an adverse action notice that includes:

• The name, address, and contact details of the consumer reporting agency that provided the eviction history
• A statement that the agency did not make the decision to deny tenancy and does not know the reason
• Information on how the applicant can obtain a free copy of their consumer report and dispute any inaccuracies

This transparency protects you and keeps your screening process compliant.

---

Summary

In South Dakota, landlords can legally deny applicants who have prior evictions, as these often signal potential risk factors for tenancy. However, to ensure good landlord practices and legal compliance, keep the following in mind:

• Denial based on eviction history must be consistent and applied fairly to all applicants.
• Screening practices must comply with federal and South Dakota fair housing laws, avoiding discrimination.
• Obtain applicant consent before running background or eviction checks and provide the necessary adverse action notices if denying tenancy.
• Consider the timing, circumstances, and applicant efforts to mitigate past eviction issues.
• Use comprehensive screening criteria that look beyond eviction histories alone.

By following these guidelines, South Dakota landlords can effectively manage tenant screening processes and make informed decisions that protect their interests while respecting the rights of applicants.