Picking the perfect tenant is a good feeling but there is a downside to the selection process – rejection. It’s simple math: if you have ten applicants, you have to turn down nine people. This rejection can be stressful for both you and the applicant.
As a landlord there is always a concern that what you are going to say could be misconstrued as discrimination or that you could get into an argument over why you are not renting to the them. Applicants can often feel entitled to your unit and if they don’t get it they can often demand a reason why not. You are under no obligation to rent to anyone and there is no requirement to give a reason for declining an application. At any time of the tenant selection process you can decide to not go forward with an application. It is important to know that you have this right and if you notice any red flags or just don’t have a good feeling about a potential tenant you should stop the process before you get too far.
As a landlord you are in control of who you rent to and the easiest way to decline an applicant is to start the process by letting the applicant know that you have a strict tenant selection policy. It is a fine line between being professional and scaring away potential tenants. You need to make sure that your process is not so arduous that no one is interested in applying. The best way to ensure this is by setting expectation from the beginning. Let your applicants know that you have a process to go through when selecting a tenant but that if they have any questions about any of your checks you are open to discussing the process with them.
A perfect example of this is the social insurance number (SIN) and the credit check. People are weary of any process that involves a close look at personal information such as a credit check. If an applicant wants to know why you run a credit check or need references this is not necessarily a red flag. There are all sorts of scams out there and it is normal to expect an applicant to want to be informed about the kind of information you will be gathering about them. The Personal Information and Protection Act (PIPA) allows a landlord to ask for a SIN but it cannot be a condition of renting to an applicant. In other words you can ask but they can decline and that alone cannot be a reason to decline an application.
The Human Rights Code makes it very clear what a landlord cannot discriminate against and it is very easy to follow as none of the criteria listed in the Human Rights Code would directly effect the suitability of an applicant. Discrimination based on the race, colour, ancestry, place of origin, religion, marital status, family status, physical or mental disability, sex, sexual orientation, age or lawful source of income of that person or class of persons, or of any other person or class of persons is prohibited. There are a few exceptions listed in the Human Rights Code such as being able to have a 55-plus building or being able to discriminate against minors based on their age.
There are a few points the Human Rights Code lists that can cause some confusion, including marital status, family status, and lawful source of income. Each one of these points can be easily misunderstood and often lead landlords to feel uncomfortable in declining applications as they may fear that they could be considered discriminating and in violation of the Human Rights Code.
Marital status and family status are often concerns in situations where the landlord is trying to rent a small space that is only suitable for one person. Neither of these criteria listed in the Human Rights Code are meant to strip a landlord’s right to determine the number of people to reside in the rental unit. For marital status, you cannot discriminate based on the status of the applicant’s relationship while family status generally means you cannot discriminate based on the fact that an applicant has children. If a unit is only suitable for one person and a family of six applies for your rental unit, you are not obliged to consider them, not because they have children but because there would be too many occupants.
An applicant’s lawful source of income is another point you are not able to discriminate on. The confusion here is that it is often misunderstood that you cannot discriminate against someone that cannot afford your rental unit. What the code means is that you cannot discriminate based on how an applicant earns their money so long as the means is legal. If your applicant has a job, no matter what you may feel about the profession, if it is legal, you cannot discriminate against them based on this. Income assistance such as employment insurance, disability or SAFER are legal sources of income and a landlord cannot decline an application based on an applicant receiving this kind of support. However, you can discriminate against someone that has an unlawful source of income such as drug dealing.
So how do you decline an application once you know you do not want to go forward? The easiest way is to call or email the applicant and simply inform them that you are not able to approve their application and leave it at that. You are not obligated to give them a reason and often once that conversation about why you do not want to rent to them starts it turns into a an argument that is hard won. If you have chosen another applicant, tell them so to take the pressure off. However, if you do not have a tenant yet you can say that you are considering other applicants.
If after the first contact with an applicant you know you do not want to rent to them, an easy way of ending the process is by telling them that you have their information and if you want to move forward you will contact them. This lets them know that no contact means you are not interested. We do not recommend using this tactic with applicants that have gotten further in your tenant selection process as it often ends in angry phone calls or emails.
When can’t you say no? Once you have already said yes… or implied a yes. Once you have established a tenancy you cannot back out of it without following the standard rules on ending tenancies. Many things establish a tenancy but the general rules are that if you have signed an agreement with the applicant(s), accepted a security or pet damage deposit, accepted rent, or verbally agreed to rent the unit to the applicant(s), you have entered into a tenancy agreement.