Denying a rental application is never easy, but it is a necessary part of property management. California landlords are allowed to reject applicants who don’t meet their written screening criteria, but the process must be handled carefully to avoid claims of discrimination or retaliation. Every denial must be based on objective, legal reasons and documented clearly. Understanding how to legally deny a rental applicant in California helps you protect your business, stay compliant with fair housing laws, and maintain a consistent and professional screening process.
Use Consistent and Legal Screening Criteria
The first step to legally denying an applicant is having clear, written rental criteria that apply equally to every applicant. If you’re rejecting someone, it must be for a valid reason that’s based on those published standards—not for personal preferences or subjective decisions.
Examples of acceptable screening criteria include:
- Gross monthly income of at least 2.5–3x the rent
- Credit score above a minimum threshold (e.g., 620 or higher)
- No recent evictions or unpaid landlord judgments
- Clean criminal history or no recent felony convictions
- Verifiable employment and positive rental history
The key is to apply the same standards to every applicant, regardless of background. Avoid using vague or unwritten rules, and never make exceptions for some applicants while being stricter with others.
Know What Is and Isn’t Legal to Consider
California’s fair housing laws prohibit landlords from denying applicants based on protected characteristics. Even an unintentional violation can result in a discrimination complaint, so it’s important to know what factors you may not use as part of your decision.
You cannot deny a tenant based on:
- Race or ethnicity
- Religion or creed
- Gender, gender identity, or sexual orientation
- National origin or immigration status
- Marital or familial status (e.g., having children)
- Disability, including mental or emotional disabilities
- Source of income, including housing vouchers and government benefits
- Age
- Military or veteran status
You may deny an applicant for failing to meet income, credit, rental history, or criminal background standards—as long as those standards are applied equally and do not have a discriminatory effect.
Document the Reason for Denial
Always keep detailed records of why an applicant was denied. This documentation can protect you in the event of a dispute or legal claim. Include a copy of their application, your screening checklist, and any background or credit reports used to make the decision.
Reasons to deny may include:
- Income too low to meet the rent standard
- Poor credit history or high debt-to-income ratio
- Negative reference from a prior landlord
- Incomplete or unverifiable application information
- Recent eviction history
- Criminal conviction that presents a legitimate business concern (e.g., violent or property-related offenses)
Avoid using vague phrases like “bad fit” or “we chose someone else.” These can be seen as cover for discrimination and are harder to defend in a legal setting.
Provide a Written Denial Letter
California landlords are not required by law to provide a written denial letter in every case, but it is strongly recommended. If the decision involved a credit report or background check, the Fair Credit Reporting Act (FCRA) requires you to provide an adverse action notice.
A denial letter should include:
- A brief statement that the application was denied
- The specific, lawful reason for the denial
- Contact information for the screening agency, if a credit report was used
- A notice of the applicant’s right to request a free copy of their report
- A reminder that the screening agency did not make the decision
Providing this letter demonstrates transparency and professionalism while helping applicants understand the reason for the denial.
How to Comply With FCRA Requirements
If you used a third-party service to pull credit, criminal, or eviction history, you must follow the FCRA rules when denying the application. This includes sending a written adverse action notice to the applicant.
Your FCRA notice must contain:
- The name, address, and phone number of the screening company
- A statement that the screening company did not make the decision
- Notice of the applicant’s right to dispute inaccuracies in the report
- Instructions for requesting a free copy of the report within 60 days
Failing to send this notice can result in legal penalties, so it’s essential to include it with your rejection letter when credit or background checks are part of the decision.
Avoid Retaliation and Discriminatory Timing
Even if the denial is based on legal reasons, the timing of your decision can lead to legal issues if it appears retaliatory. For example, if an applicant files a complaint about your rental listing and is then denied, it may look like retaliation—even if the decision was unrelated.
Best practices to avoid retaliation claims:
- Make the decision based on written criteria and document it immediately
- Avoid making sudden changes to your screening criteria mid-process
- Do not deny applicants for reporting issues or exercising legal rights
- Keep communications polite, factual, and professional
Consistency and timing matter. If your reason is legitimate, but your actions suggest retaliation, you may still be at risk for legal claims.
Be Cautious With Applicants Using Housing Vouchers
California law prohibits landlords from discriminating based on source of income, which includes Section 8 and other housing assistance programs. You may not deny an applicant simply because they use a voucher or subsidy. However, you may evaluate their portion of the rent (not the total rent) when considering income qualifications.
For example:
- Rent is $2,000
- Section 8 covers $1,600
- Tenant pays $400
- You may evaluate whether the tenant can afford the $400, not the full $2,000
Landlords must include language in their rental listings stating that all lawful sources of income are accepted and apply income standards accordingly.
Keep a Consistent and Transparent Process
A transparent and documented screening process is your best protection against legal claims. Create a written rental policy, train your team to follow it, and keep a clear record of every application and decision.
Elements of a good screening policy:
- Minimum income and credit score requirements
- Maximum allowable debt-to-income ratio
- Criminal background criteria that comply with California law
- Required documentation for employment and income verification
- A consistent method for contacting and evaluating references
The more consistent your screening process, the easier it is to legally justify any denial—and the less likely you are to face complaints or legal challenges.
Denying a rental applicant is part of the business, but it must be done in a professional and legally compliant way. By using written criteria, documenting your decisions, providing proper notices, and avoiding discrimination, you can protect yourself from costly legal issues and build a fair, reliable screening process.