Why Tenant Screening Matters
A bad tenant can cost you tens of thousands of dollars. Between lost rent, legal fees, property damage, and the stress of eviction proceedings, one poor screening decision can wipe out years of profits. In New York and New Jersey, where eviction processes can take 6-12 months, proper screening is your most important protection.
But screening must be done correctly. Fair housing violations carry severe penalties, and both states have additional protections beyond federal law. This guide shows you how to find great tenants while staying fully compliant.
Legal Framework: Know the Rules
Federal Fair Housing Act
You cannot discriminate based on:
- Race or color
- National origin
- Religion
- Sex (including sexual orientation and gender identity)
- Familial status (families with children)
- Disability
New York State Additions
NY Human Rights Law adds protections for:
- Age
- Marital status
- Military status
- Source of income (including Section 8 vouchers)
- Lawful occupation
New Jersey Additions
NJ Law Against Discrimination adds:
- Ancestry
- Domestic partnership status
- Gender identity or expression
- Source of lawful income
The Screening Process
Step 1: Consistent Application
Use the same written application for every applicant. Your application should collect:
- Full legal name and all occupants
- Current and previous addresses (past 3 years)
- Current and previous landlord contact information
- Employment and income information
- Authorization for background and credit checks
Step 2: Credit Analysis
Pull credit reports from a reputable screening service. Look beyond just the score:
- Payment history: Focus on housing-related payments and utilities
- Collections: Medical debt is treated differently than credit card debt
- Debt-to-income ratio: Can they afford the rent?
- Recent changes: Is credit improving or declining?
Remember: NYC limits security deposits to one month's rent regardless of credit score.
Step 3: Background Screening
Criminal background checks require special care:
- NYC: Cannot inquire about arrests that didn't result in conviction
- Must consider: Nature of offense, time elapsed, rehabilitation evidence
- Cannot use blanket policies that reject all applicants with records
Step 4: Income Verification
Standard requirement is income of 40x monthly rent (annually), meaning a $2,500/month apartment requires $100,000 annual income. Verify through:
- Recent pay stubs (last 2-3)
- Employment verification letter
- Tax returns for self-employed applicants
- Bank statements showing consistent deposits
Step 5: Landlord References
Contact previous landlords (not just current, current landlords may give good references to get rid of problem tenants). Ask:
- Did they pay rent on time?
- Did they maintain the unit properly?
- Were there any lease violations?
- Would you rent to them again?
Red Flags to Watch For
- Previous evictions or landlord-tenant judgments
- Inconsistent information on application
- Gaps in rental history they can't explain
- Reluctance to provide landlord references
- Pressure to skip screening steps
- Cash-only payment requests
Adverse Action Requirements
If you reject an applicant based on screening information, you must:
- Provide written notice of the adverse action
- Include the name of the screening company used
- Inform them of their right to dispute the report
- Document your reasons (for your protection)
Professional Screening Services
Property Perfected handles all tenant screening with thorough, compliant processes developed over years of NJ/NYC property management. We find qualified tenants while protecting you from fair housing liability. Request your free portfolio analysis to learn more about our leasing services.
