Two much or not enough?

September 5, 2011 9:42 AM

Two prospective renters both coming from out of town to look at my house next Saturday. Is my plan for handling potential conflict reasonable?

We live in a house we are trying to rent out so as to buy another. Two prospects have responded to a for sale/for rent ad I've placed. Both will potentially drive in from out of town (2-3 hours) to look at the house. Obviously, I will schedule the visits at two different times. Is the following plan fair in the event both want to rent it?

- I will take their application and their deposit and tell them I'll notify them as soon as I run the background check.
- if the 2nd person in line (based on the initial contact, not the time of the appointments) wants it, I will take their application and deposit, informing them that IF the first person in line wants to apply, they have first priority, assuming their background check is clean, and that if that other application is successful, I will return their check (I would also return the check to either one in the event they failed the background check).

Passing the background/credit check clean will be my only criteria, and I will inform these prospects of that. I will run all checks and inform all parties of their status as soon as possible.

Does this seem fair, and do I expose myself to any liability for violating any laws if I handle it this way? I live in Alabama.

posted by randomkeystrike to law & government (19 answers total)

I wouldn't take money from either person until they moved in.
posted by roomthreeseventeen at 9:45 AM on September 5, 2011 [4 favorites]

Sounds reasonably fair (can't speak to the legality of it) but I'd also add that if they're driving in from out of town, I'd let whoever is #2 in the queue know ahead of time that someone else has 'first dibs'. Personally, if I knew I wasn't first in line, I'd rather wait to see if the other guy wants it before making the trip - unless I was viewing multiple properties in the same day.
posted by missmagenta at 9:47 AM on September 5, 2011 [5 favorites]

Have you ever been a landlord before? I would be willing to bet you don't actually want the background check to be your only criteria.

Ancient advice to check out the condition of the car. If the inside is a filthy pit, that's likely how they're going to treat your home. Same for lots of dings and scratches. Yes, I get that there are outliers, people with crappy cars who keep pristine homes. But, why take the chance?

Also, be extremely aware of the rental laws in your location. Nobody on metafilter can give you the kind of legal advice you're asking for. Rental law may vary in some cities in your state, but even if it doesn't, nobody here is actually your lawyer. It would be worth it to you to get one, pay a few hundred bucks, and protect yourself.

For instance, you may not be allowed to hold a deposit, but you may be allowed to charge for the background check. As it's possible that both of these potential renters may not pass muster, it would be reasonable to not eat that cost. But it might not be legal.
posted by bilabial at 9:47 AM on September 5, 2011 [1 favorite]

I'd not make any promises to whoever manages to get there first or who called first. Take the application, payment for the credit check, and then you can decide based on the background check, your gut instincts, and so on.

Alabama landlord tenant pdf.
posted by Ideefixe at 9:50 AM on September 5, 2011

I think your first come, first serve idea is totally wrong. What you want are the best possible tenants. The choice is yours. Meet them, get references, do background checks, etc. And listen to your gut.

I was last in line for an apartment once and was the preferred (and victorious) tenant because I was the best possible match.
posted by RJ Reynolds at 10:13 AM on September 5, 2011 [3 favorites]

As RJ Reynolds says, the priority is the tenant who checks out well in all particulars (credit, background, ref from landlord, clean car), not the one who came first. If it's a tie, then by all means, give the first applicant dibs.

(Also, be prepared for them to not show up at all.)
posted by thomas j wise at 10:21 AM on September 5, 2011 [2 favorites]

Is it normal for somebody to pay up front for the background check conducted by a potential landlord? It seems to me that cost should be covered by the landlord. You don't ask the prospective tenants to pay for advertising, right? It seems like you should just take the applications, do whatever background checks are necessary, and don't take any money at this point. Rank your applicants, and then accept money once your new tenant actually sign the lease.

And as a complete aside, I probably would not rent your house to buy another. But that is another thread for another time.
posted by Seymour Zamboni at 10:22 AM on September 5, 2011

I once was one of two prospective tenants viewing an apartment at nearly the same time. The landlord said we seemed okay. He said the same thing to the others, so I whipped out my checkbook and wrote him a deposit check on the spot to seal it.

Seemed like a fair tie-breaker to me. But I would have wanted to know about the possibility of "losing" in that manner had I driven hours to see the place.
posted by michaelh at 10:55 AM on September 5, 2011 [1 favorite]

Have a set of criteria you want your eventual tenants to have (clean credit check, non-smoker, whatever). The first person who meets your requirements and writes you a deposit cheque, regardless of order of initial contact, gets the apartment. Done.
posted by auto-correct at 11:51 AM on September 5, 2011

Don't try to be "fair". Aim for legality first and self-interest second.

And there's no need to share your process with the prospectives--but if you want to warn them that you've had a lot of interest (which they should expect anyway) you can call them up to confirm the appt time and mention that you've had alot of interest and are looking forward to finding a good match.
posted by vitabellosi at 12:08 PM on September 5, 2011

Is it normal for somebody to pay up front for the background check conducted by a potential landlord?

In my experience, yes. And that fee is non-refundable.
posted by Narrative Priorities at 12:56 PM on September 5, 2011

Depending on what company is doing the background check (it can be cheaper if you're in a apartment owner's association), the fees can rack up into the hundreds of dollars very, very quickly; if it's legal in your area, by all means charge. You can give the successful applicant a credit back on the first month's rent, if you want.
posted by thomas j wise at 1:01 PM on September 5, 2011

Depending on what company is doing the background check (it can be cheaper if you're in a apartment owner's association), the fees can rack up into the hundreds of dollars very, very quickly; if it's legal in your area, by all means charge. You can give the successful applicant a credit back on the first month's rent, if you want.

FYI, every time I've rented an apartment or a house, I've been charged between $25 and $50, non-refundable, as an "application fee" that includes a background and/or credit check. I have never gotten a credit back. This is very standard. I've also given a deposit check at the time of the application every time I've rented an apartment or house. I.e., I give one check for the application fee and one check for the deposit. The application fee is cashed immediately so the landlord can process the application, and if I'm approved and we sign a lease, the landlord then deposits the deposit check.

Also, I nth everyone who has said that you should take applications from anyone who expresses interest and rent to the applicant who checks out in all particulars. First come-first served is ONE way to go about renting a place, but by no means the only way, particularly as you are renting YOUR HOUSE.
posted by devinemissk at 1:29 PM on September 5, 2011

I'd say "I'll email you the application tomorrow and I'll take whoever sends back a completed application (that qualifies) first." I'd give them the chance to send you their free credit report rather than paying you to run it (everywhere I've ever rented has allowed this). Then maybe tell the winning party that they have a week to mail you a deposit or you'll give it to the next person in line.
posted by salvia at 1:33 PM on September 5, 2011

I have been a landlord. Get references. Check them. Visit your state's attorney general's website and read up on tenant rights. Visit legal aid in your area and do the same thing. Develop a rental agreement specifying responsibilities - yours and theirs. Take lots of pictures of the condition of the house at move-in.

Interview the applicants. Ask then about pets, musical instruments. If you have nice hardwood floors, make them have rugs, or get big, cheap polyester rugs.

If I were a renter, I'd balk at paying a deposit without being assured of the rental.
posted by theora55 at 4:04 PM on September 5, 2011

Thanks for the advice so far, everyone. Yes, I have told each of the other's interest, and will make sure they're aware. You've sort of told me what I was hoping - that I could ethically go with the BEST tenant prospect.

I sort of oversimplified on the background check - I didn't mean that I was literally going to just look at that and be blind to things I actually see and pick up on, only that it was not going to be a popularity contest or the like.
posted by randomkeystrike at 6:35 PM on September 5, 2011

and yeah, I do need to be careful about what I say and how I say it. I have a tendency to be too nice a guy that I'm going to have to carefully check.
posted by randomkeystrike at 8:21 PM on September 5, 2011

Is it normal for somebody to pay up front for the background check conducted by a potential landlord?

Yes, but this is controlled by state and sometimes local law, in terms of the maximum amount charged, whether it is non-refundable, and so forth. (To OP: As a landlord, you must make sure you know and comply with the law in your area.)

To be sure, the background check is not actually "conducted by" the landlord, most of whom would have no idea where to start. There are numerous firms which provide this service.

IF the first person in line wants to apply, they have first priority

This is wrong. You have no obligation to any tenant based on when, uh, you scheduled their appointment. Simply tell each applicant that you will review their information, get the background check they have paid for, and let them know.
posted by dhartung at 9:48 PM on September 5, 2011

I would never agree to pay a landlord anything without having a lease to sign in front of me. And I've never been asked to in any state in which I've rented (Massachusetts, Michigan, Maryland) although I believe a realtor that I went through last time paid the landlord some kind of application fee.
posted by Ralston McTodd at 4:04 AM on September 6, 2011