Can landlords deny applicants with prior evictions?

Tenant Screening and Prior Evictions: Guidelines for Texas Landlords

When screening prospective tenants in Texas, landlords often review the applicant’s rental history to assess their suitability. One frequent concern is how to handle applicants with prior evictions. Understanding the legal framework and best practices around this issue is crucial for Texas landlords to make informed, fair, and compliant decisions.

Can Texas Landlords Deny Applicants Based on Prior Evictions?

The straightforward answer is yes, Texas landlords can deny rental applications based on an applicant’s prior evictions. Evictions serve as a significant indicator of rental risk, and Texas law grants landlords broad discretion in selecting tenants, provided discrimination laws are followed.

Key Points:

• No Legal Prohibition Against Denial Based on Evictions: Texas state law does not prohibit landlords from denying applicants due to prior evictions.
• Consideration of Consumer Reporting Laws: Many landlords use background or credit reporting agencies to obtain eviction records. They must comply with the Fair Credit Reporting Act (FCRA) when using these reports.
• Consistency and Non-Discrimination: Although landlords have discretion, they must apply tenant screening criteria consistently to avoid claims of discrimination under the Texas Fair Housing Act or the federal Fair Housing Act.

Why Are Prior Evictions a Concern for Texas Landlords?

Evictions indicate that a tenant previously failed to uphold lease obligations, most commonly due to nonpayment of rent or violation of lease terms. This history makes an applicant a higher risk because:

• Financial Reliability: Prior evictions often suggest past financial difficulties or irresponsibility.
• Lease Compliance: A prior eviction implies possible previous lease violations.
• Potential Legal Costs: Evicting a tenant requires time and money, prompting landlords to minimize eviction risks.

Best Practices for Texas Landlords in Screening for Evictions

To protect your investment and comply with applicable laws, follow these guidelines:

1. Obtain and Review the Applicant’s Rental History

• Request a detailed rental history including landlord references.
• Use tenant screening services that report eviction records accurately.

2. Use Background Checks Responsibly

• If using a consumer reporting agency (CRA) to obtain eviction info, comply with the FCRA:

- Obtain the applicant’s written permission before running the report. - Provide adverse action notices if denying based on the report.

• Review the eviction report for accuracy, including dates, outcomes, and context.

3. Establish Clear Screening Criteria

• Create uniform policies on how prior evictions affect applicants.
• For example, you might decide not to rent to anyone with an eviction within the last 3-5 years.
• Apply these criteria consistently to all applicants.

4. Consider the Circumstances Behind the Eviction

• Did the eviction result from financial hardship that has since been resolved?
• Was the eviction related to lease violations other than nonpayment?
• Has the applicant demonstrated reliable behavior since the eviction?

Some landlords choose a more nuanced approach, weighing current income, credit history, or references against prior eviction history to balance risk.

5. Avoid Discriminatory Practices

• Ensure denial decisions are based on legitimate rental criteria, not protected characteristics such as race, religion, sex, familial status, disability, or national origin.
• Document your decision-making process to defend against potential claims.

6. Inform Prospective Tenants of Denial and Rights

• If you deny an applicant based on an eviction report, provide an “adverse action notice” that includes:

- The name and contact information of the reporting agency. - A statement that the agency did not make the decision and cannot explain it. - Information on the applicant’s right to obtain a free copy of the report and dispute inaccuracies.

Legal Summary and Practical Considerations

• Texas landlords have discretion to deny rental applications based on prior evictions.
• Using eviction reports from consumer reporting agencies requires compliance with FCRA federal law.
• Screening policies should be uniform, objective, and documented.
• Take care to avoid decisions that could result in discrimination claims.
• Communicate clearly with applicants about screening criteria and adverse decisions.

Conclusion

Prior evictions are a valid and commonly used factor in tenant screening for Texas landlords. By establishing consistent policies, conducting thorough tenant screenings, and complying with legal requirements, landlords can reduce the risk of future evictions and maintain a successful rental operation. Taking a fair and professional approach benefits both landlords and tenants in the Texas rental market.