When considering renting a property to a prospective tenant, you must select the right one. This is the idea of using a comprehensive tenant screening process. Some landlords may choose to execute the process on their own while others may go the route of a screening service.
Before getting to that point though, prospective tenants must indicate their interest in the property by completing a Tennessee rental application form.
In keeping within the confines of Tennessee law while ensuring that you choose the right tenant, there are some essential insights to bear in mind, which are all covered below.
What To Include
First, note that a Tennessee rental application document can take two different forms. The first is the standard application, which is likely the one you'll be using to find a tenant for your rental property. There's also the Department of Housing and Urban Development (HUD) rental application form.
This variation is aimed at those who have rental properties that fall under the Section 8 Housing umbrella.
In any event, your rental application form is the first element of the screening criteria. Therefore, you want to ensure it captures essential insights. Some of the typical pieces of information requested are:
- Personal data of all intended tenants
- Employment information
- Rental history
- Written consent for credit report generation, alongside other background checks
- Income details
What Not To Include
On the flip side, there are things that landlords may not ask as they attempt to seek tenants for their rental properties. These prohibitions are at the federal level and form a part of the Federal Fair Housing Act (FHA). Essentially, a rental application document may not request any of the following protected classes of details:
- Disability status
- Familial status
At the state level, Tennessee prohibits landlords from creed queries on rental application forms.
Rental Application Fee Laws
In the state of Tennessee, there is no limitation on how high an application fee can be. Nevertheless, landlords are advised not to charge any excessive amounts.
Considering that security deposits are a form of insurance that will come into play if a tenant is accepted, application fees need only cover administrative expenses such as those associated with the screening process.
Types of Background Checks
The tenant screening process will typically include background checking to verify that a potential tenant is worthy of establishing a lease agreement with. They tend to fall under the following three categories.
Criminal History Check
As the name implies, the criminal history check will see if there are any records of potential renters being associated with any crimes. This includes a check at the state database level, as well as more broadly scoped ones, such as the national sex offender public registry.
Rental History Check
Technically speaking, this is more of an eviction check. Tennessee landlords will want to know what kind of eviction history tenant hopefuls have. The information available will span the last seven years and will include any filings or judgments against the said tenant.
The credit history part of the application process follows written consent being provided either as a separate document or as a signature to a preset statement. It is the Federal Credit Reporting Act (FCRA) that requires this permission to be provided before a credit check can be done.
The idea of this element of screening is to get details on the applicant's income, credit score, employment history, and more.
Landlords are aware that they need to inform their prospects about certain details such as what the security deposit will look like and the extent of application fees. However, the eligibility notice requirement may not be so widely known.
Essentially, applicants need to be made aware of what the screening criteria for the property are, so they can understand what may lead to an approval or a denial. There must be a signature of acknowledgment completed to indicate that this was shared.
Security deposits are often a hot topic, but their necessity comes in the form of protection that they provide for landlords just in case there is damage or other expenses that are incurred when the tenant is leaving.
The actual security deposit figure, like the application fee, is not limited by any laws. However, several guidelines must be followed, which are:
- The security deposit must be placed in a separate account and the tenant must be notified of such
- Violations of the lease agreement, nonpayment of rent, and damages are all grounds for the deposit to be retained
- When security deposits are to be returned, there is a 60-day window to do so
- The deposit must be transferred to the new owner if the property is sold
- There is a walkthrough inspection allowance
Eviction Record Search
As indicated before, following the submission of a Tennessee rental application form, a landlord may wish to get an understanding of the applicant's eviction history. Such records in the state fall under the umbrella of publicly accessible information.
Online access is permitted following the creation of an account with the Tennessee Appellate Case Search.
Adverse Action Notice
After acquiring a background check report during the screening element of the rental application process, you may wish to take adverse action against the applicant. Such actions include rejecting applications, requiring an extra signature, increasing the rent, or increasing the security deposit requirement.
While not prohibited, you will need to ensure that the tenant hopeful receives a letter of notice with the relevant details. This is what is called the adverse action notice.
Note that even in an instance where the information from the report is not the main reason for the action being taken, the notice must still be provided. The applicant is given a 60-day window to dispute the contents of the report.
Build Your Own
With the application fee paid and the screening done, you will eventually come to a consensus on who you think is most appropriate for your property. In this case, a lease agreement will likely be next on your radar. You can use the standard variation, available in Word and PDF format, or you can build your own here.
Now, you have a good grasp on the Tennessee rental application workflow and the considerations you need to make from an informational and legal perspective.
While it can sound like a handful, you don't have to do it all on your own. DoorLoop is willing to help you with your form generation and you can even take advantage of a comprehensive screening service for added convenience!
Can Tennessee Landlords Be Asked for Refunds of Application Fees after Unsuccessful Rental Applications?
No. Application fees in Tennessee constitute a non-refundable payment.
Why Must Tennessee Rental Applications Be Followed By a Comprehensive Screening Process?
You cannot know everything about anyone. However, the screening, when done well, provides an accurate representation of how aligned the tenant is with the property.
What Should Be Considered in Deciding How High to Set Application Fees?
It's always a good idea to reasonably set the application fee based on the amount of administrative spending that needs to be done. For example, you may need to pay for a screening service for the process.