Tenant Rejection Letter (How to Write) – Free Templates

The landlord or property manager sends a rejection letter to a tenant informing them that their application for residential housing has been declined. Whether you are a landlord or a property manager looking for an ideal tenant for your property, or merely a renter looking for a perfect place to rent, part of the process for both parties typically involves a rental application. This application helps determine whether or not an applicant will be approved to move into the property. 

Many landlords and property managers believe that they have to accept the first tenant to come along with the money or risk the grief of a lawsuit and that they cannot reject a tenant application for any reason. Any landlord should know the various legitimate reasons that can be used in determining the approval or rejection of a rental application. Consequently, the potential tenant should know the reason(s) why their rental application has been rejected.

The primary goal of any landlord is to find someone who will best fit their property based on their ability to meet the rental requirements. 

Common Reasons for Application Rejection

Below are some of the factors that may result in the cancellation of a rental agreement:

• Credit: According to the Fair Housing Act, a rental denial based on poor credit history or no credit history is legal at the local, state, and federal levels. As a landlord, before leasing your property, you should ideally integrate a rental application letter with a background check and credit report. 
• The credit report will provide you with an insight into the history of the applicant and the likelihood that they will be able to pay their rent each month. Landlords usually set a minimum score requirement on rental applications. A bad credit report with a low score, significant debts, or judgments on outstanding debt can be considered legal grounds for denial. 
• When looking to rent a property, it might be a good idea to learn more about your credit score before sending in your application. You should contact your banker to determine where your credit score currently stands and where it needs to be for you to be accepted by most landlords.
• Criminal History: In most states, federal acts allow the denial of an application based on the finding that an applicant has a criminal history. Even though it is illegal for a landlord to reject your application for having a criminal record or for being arrested, the law gives the landlord the right to deny you such applications if you have been convicted of a dangerous crime that would put the community, property, or other tenants at risk. 
• Smoking and Pets: Some landlords and property managers do not allow smoking in their properties. This is due to the potential damage and associated costs that pets and smoke can cause. You can, however, be excluded if you have a companion or a service pet. Landlords usually indicate in rental listings whether their premises are pet-friendly or smoker-friendly. 
• When applying for a rental property and you own a pet, make sure to check with the landlord about their specific pet policy. It is good to disclose that you have a pet before moving in to avoid any inconveniences that arise after that. 
• Record of Evictions: Most landlords, when running background checks, will always be on the lookout for any rental evictions in your history report. An eviction provides insight into the ability of the tenant to pay rent on time. If you have any evictions on your record when applying for a rental property, understand that this will be a major flag for many landlords and property managers. 
• Reference History: Most landlords ask applicants to include references in their applications. If you fail to include the references in your application or if the references don’t check out, then your application may be rejected. 
• Gaps in History: As a landlord or a property manager, it is always good to check out any red flags in an application. If you find any missing years from a residence history, you should follow up with the applicant about these years. It might be that they were trying to hide a bad situation with a prior landlord.
• Dishonesty: Dishonesty is one of the surest ways to get a rental application rejected. If you lie on your application and the lie is detected, then the landlord will most certainly reject your rental application. Leaving essential components of the application blank can also lead to automatic rejection. 
• Insufficient Income: The ultimate concern for any landlord is making sure that the tenant has the financial means to clear their rent each month. An application letter for rental can be rejected if the applicant does not make enough money to financially meet the rent requirement. Usually, this requirement is a ratio of three times the income to rent. When reviewing a rental application, what the landlord will look at is your ability to meet all of your typical budgetary needs in addition to the rental amount. 
• Poor Reference Checks: Most applicants usually assume that they can just use any person as a reference when writing an application letter. In most instances, the landlord contacts the references included in your application to have a clear understanding of who you are and whether they should approve your request to rent.

Five Stages of a Good Screening Process

• First Contact: When the tenant calls to inquire about the property and the lease. The first thing to do is to ask some pre-screening questions to make sure that they are not going to waste your time.
•  The Showing: The next step after the tenant satisfies all the questions you had for them is to meet them face to face to show them the property.
• The application: If the prospective tenant is still interested in renting the property, the next step is to have them fill out a rental application. That includes references from prior landlords and employers. Make sure you run a complete background check on the tenant. 
• Approval Process: If the tenant seems like a great fit for your property, accept them and gently decline all other applicants. 
• Lease Signing: If the tenant meets all the requirements for renting your property, the last step is to have them sign the lease. You should go through the lease with the tenant to ascertain that they understand all the rules and that all their questions are answered. 

The Legality of Rejection

There are specific reasons, according to the Federal Fair Housing Act, that prohibit a landlord from rejecting a rental application.

These include discrimination based on:

• Race 
• Color
• Religion
• Sexual orientation 
• Marital status
• Gender identity
• National Origin
• Gender
• Familial status
• Age
• Physical or mental Disability

How to Write a Rejection Letter

Thank the applicant for his/her interest

Even though you are rejecting their application to rent, it is important to keep the tone of the letter polite throughout. Show your appreciation to the applicant for choosing your property over all others and showing interest in renting it out. Thank them for the same.

Give reasons for your refusal

Inform them politely that you deeply regret that you will not be able to rent the property to them due to unfavorable or undisclosed information that you have come across during the screening process.

Attach supporting documents to your letter

If you have any proof to support your reason for rejecting the application, it is advisable to accompany it with the rejection letter. This will help in case the tenant becomes upset about being rejected and demands an explanation as to why they have been denied.

Be brief and concise

Avoid including unnecessary details when writing this letter. Limit its content to at least three paragraphs. Also, ensure that it is free of any grammatical errors.

Help the applicant with alternative options

Your reason for rejecting a tenant may be because you have already rented out to someone else, or their application didn’t arrive on time. If that is the case, you may offer to direct the applicant to some other known alternatives, which may be useful before signing off.

Analysis

This rejection letter from Oakwood Property Management effectively communicates a difficult message with professionalism and empathy. It starts by acknowledging the applicant’s effort and expressing gratitude for their interest, setting a respectful tone. The letter then clearly states the decision not to offer tenancy, attributing it to specific, objective criteria like income verification and credit history, which helps the applicant understand the basis for the decision without feeling personally judged.

By emphasizing that the decision reflects the high volume of applications and the need to adhere to leasing criteria, rather than the applicant’s personal qualities, the letter mitigates potential negative feelings. This approach maintains the applicant’s dignity and leaves the door open for future interactions.

The offer to provide feedback and the encouragement to apply for future vacancies demonstrate the company’s willingness to support the applicant’s housing search, further softening the blow of rejection. Providing contact information for further inquiries shows openness and readiness to assist, enhancing the company’s image as considerate and tenant-focused.

Overall, the letter balances the delivery of disappointing news with a supportive and respectful communication strategy, reflecting well on Oakwood Property Management’s professionalism and its commitment to maintaining positive relations with potential tenants.

About This Article

Authored by:

David Waterman

Legal Writing, Tax Law, Real Estate, Technology Start-ups | Graduate in Tax Law BA in History

David Waterman, an accomplished legal writer and expert in tax law, real estate, and technology start-ups, hails from Rutland, Vermont. He completed his undergraduate studies with a BA in History in 2010 before graduating from Georgetown University Law Center in 2014. During his time at Georgetown, David actively contributed to the Tax Journal and dedicated his efforts to the immigration clinic as a volunteer. Since graduating, he has honed his expertise in tax law, showcasing his passion for the subject matter. Alongside tax law, David's professional interests also extend to the realms of real estate and technology start-ups, reflecting his diverse and dynamic approach to the legal field.