There is a bill that may pass that will mandate the first qualified applicant to be accepted by the owner or management company. The property owner must publish what their criteria are for applicant approval, but whoever the first applicant is who meets that standard, their application must be approved. Often, we have owners who may like, but not love an applicant who meets their qualifying standards, but they want to hold out for a better applicant. This may intentionally or unintentionally lead to discrimination and a violation of fair housing. The first qualified applicant may be a family of 5, but the owner prefers a tenant without children, for fear of the additional damage the children may bring upon the property. But this is precisely a violation of fair housing laws because families are a protected class in California. The legislature has heard the stories and is now responding by eliminating that potential for this kind of behavior.
The good news is that the owner can pick any qualifying standards they want. But of course, the more difficult they make those qualifying standards, the harder it is for tenants to qualify. Requiring any tenant to have a credit score north of 800 and gross income four times the rent will limit the applicant pool, and the owner can’t change those standards mid-course otherwise they may have rejected qualified applicants after the fact. At Progressive, we post our qualifying standards on our website and communicate them quickly to prospective tenants:
Credit score of 600+ for all applicants
Gross verified income three times the monthly rent.
No evictions in the past 5 years
No violent criminal history in the past 10 years
We don’t co-manage our properties with our owners. Once they agree to our qualifying standards, they agree to allow us to accept the first qualified applicant. To qualify as the first qualified applicant, a tenant must provide all the documentation we require. If they are not provided income verification, prior rental history and allow us to run their credit on our system, we can continue to entertain other applicants.
Here is our general policy: the more an owner gets involved with the management of their rental, the more liability they assume. They should allow us to choose the tenant, the vendors and decide on the deductions from the security deposit once the tenant moves out. An owner has hired us to professionally manage their property, not to co-manage with us. The more they treat the property as an investment, not just an investment property, and allow us to manage this important asset, the better experience they, and we, will have.