🛑 Understanding Adverse Action Letters: What Landlords Need to Know

🛑 Understanding Adverse Action Letters: What Landlords Need to Know

Under the Fair Credit Reporting Act (FCRA) and Fair Housing laws, landlords are legally required to provide a notice of adverse action in the following situations:

• You decline a rental application, or
• You conditionally approve an application, but require additional terms such as a co-signer or increased security deposit.

📄 What Is an Adverse Action Letter?

An adverse action letter is a formal notice informing a rental applicant that their application was either denied or conditionally approved with additional requirements (such as a co-signer or higher deposit). This is required by the Fair Credit Reporting Act (FCRA) and Fair Housing laws when decisions are based in whole or in part on information from a consumer report (credit, background, or eviction report).

To be valid under the FCRA, the letter must include specific disclosures, such as:

• A statement that adverse action was taken based on a consumer report
• The name, address, and phone number of the consumer reporting agency (CRA) that provided the report
• A statement that the CRA did not make the decision and cannot explain why the decision was made
• A notice of the applicant’s right to obtain a free copy of the report from the CRA within 60 days
• A notice of the applicant’s right to dispute the accuracy or completeness of any information in the report

Rent Perfect automatically includes these required disclosures in every adverse action letter generated, ensuring you stay compliant without the guesswork.

📬 How to Send an Adverse Action Letter in Rent Perfect

For your convenience, Rent Perfect generates a FREE adverse action letter with every applicant report. You have two delivery options:

1. Print and Mail – Download and send the letter yourself.
2. Email – Have the letter emailed directly to the applicant.

📨 Sending the Letter: Step-by-Step

1. Go to the View Reports screen in your Rent Perfect account and locate the applicant.
2. Click the Adverse Action circle next to their name to open the letter.
3. Select the appropriate checkboxes for the reasons you're declining or conditionally approving the application.
4. Scroll to the bottom of the letter and choose your delivery method:
    • Click Print to mail it yourself
    • Or click Email to send it electronically

✅ Important Tips for Compliance

• Be sure to select the appropriate checkboxes indicating the reasons for denial or conditional approval.
• If conditionally approving, use the provided field to clearly state the additional requirements (e.g., co-signer, higher deposit).
• Always document your decision and ensure the applicant receives the letter promptly.