• Many landlords use screening services when processing tenant applications.apartment mailboxes image by Aaron Kohr from Fotolia.com
  
  Laws permit landlords to use information received through background checks in their rental decisions. At the same time, there are federal and state laws they must follow when obtaining a background check and in notifying a tenant of a denial of his housing request.
  
  

Background Check Permission

• Federal law requires landlords to obtain a prospective tenant's written permission before running a background check. Many landlords include this request in their housing applications.
  
  

Using the Report

• A landlord is free to set his own business standards for using tenant background checks in application decisions. It is in the best interests of a landlord to ensure that he and his employees are consistent in the application of these standards to avoid charges of discrimination. For example, it is perfectly legal to deny rental housing to someone with bad credit. But if a landlord who routinely rents to people with a low credit score denies the application of a disabled applicant with bad credit, that landlord may be vulnerable to a fair housing lawsuit.
  
  

Adverse Action Rules

• Federal law requires a landlord to notify a tenant in writing if information from a background check results in an "adverse action" against the prospective tenant. An adverse action can be an outright denial of the housing application, the requirement that the tenant pay an extra security deposit, or have a co-signer. If a landlord does take an adverse action against the applicant, the landlord must inform the tenant of the name and contact information of the credit bureau or tenant screening agency, as well as information on how the tenant can get a free copy of this report.
  
  

Criminal Background Exception

• While it is legal for a landlord to deny a prospective tenant housing because of a criminal background, there is a significant exception to this rule. A landlord can deny housing to an applicant who has convictions for drug sales or manufacture. However, federal disability laws protect recovering drug users, so the landlord cannot use a conviction for simple possession or use of drugs to deny someone housing.