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Contents
This article provides general information and is not legal advice. For accuracy and specific guidance on landlord-tenant laws, consult an attorney before making any decisions or taking action.
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Every landlord's goal during tenant screening is to find responsible and reliable renters who are non-problematic. That's why we recommend that landlords in the Lone Star State of Texas be very thorough when conducting tenant screening. This not only helps them to minimize risks for damages but also maintains a positive rental experience.
Texas tenant screening laws are unique and differ in certain ways when compared to other parts of the country. For example, landlords are prohibited from discriminatory and retaliatory practices during Texas tenant screening. Also, they are also required to disclose screening criteria to applicants to ensure transparency and fairness.
This article will cover the latest information about tenant screening laws in Texas in 2024. We'll also be providing some tips and software to help you find a tenant who is a perfect match for your rental.
Create a free Landlord Studio account and easily run a comprehensive tenant screening report on your top applicants. Reports start at $45 and fees can be charged to the tenant.
If you don't already have plenty of applicants for your vacancy, you can even use Landlord Studio to create a free rental listing and share it across top channels like Zillow and Zumper with a click. Collect leads, manage rental applications, and of course, run tenant screening reports.
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Below are some key Texas tenant screening laws landlords should know and follow to ensure compliance with state laws when screening tenants.
The Fair Housing Act prohibits discrimination in housing-related activities based on various protected characteristics, including race, color, religion, national origin, sex, familial status, and disability.
This law applies to tenant screening in Texas as well as renting, selling, and financing properties and is enforced by the U.S. Department of Housing and Urban Development (HUD).
Under this Texas statute, landlords must provide applicants with a written notice detailing the criteria for tenant selection and the reasons an application may be denied at the time of application submission. This law aims to enhance transparency and fairness in tenant screening Texas, thereby safeguarding tenants from arbitrary discrimination.
The Texas Fair Housing Act expands upon federal protections against discrimination in housing. It prohibits landlords from discriminating against tenants based on race, color, national origin, religion, sex (including gender identity and sexual orientation), familial status, disability, and source of income.
Per tenant screening laws Texas, landlords are allowed to request an application fee, along with an additional application deposit from an applicant.
Below is an overview of some key aspects landlords should know before collecting an application fee or deposit for Texas tenant screening.
Unlike other states, there is no limit on the amount landlords can charge for tenant screening and application fees in Texas. However, landlords are restricted to charging only what is necessary to cover the actual costs of the screening process, as mandated by Texas tenant screening laws.
Typically, the average cost for tenant screening in Texas is around $50, but it can vary significantly, ranging from $15 to $90 depending on the service provider used.
Texas law allows landlords to charge an application deposit, which serves a different purpose than the application fee.
According to Texas Property Code § 92.351, an application deposit is a sum of money given to the landlord in connection with a rental application. An application deposit is usually charged to hold a property and can be refunded if the application is rejected.
Typically, application fees are non-refundable, regardless of whether an application is approved or denied.
However, there is an important exception when a landlord denies a tenant's application but does not supply a written notice detailing the selection criteria and reasons for the rejection. In this case, landlords are required to refund both the application fee and any associated application deposit, according to Texas Property Code § 92.3515.
Tenant screening laws Texas mandate landlords to disclose the selection criteria they use to accept or deny a potential tenant's application. This disclosure requirement is according to Texas Property Code Sec. 92.3515 and requires the landlord to provide a notice of eligibility.
Per tenant screening laws in Texas, the notice must be provided at the time the background check is issued and should include the following key elements:
To ensure the validity of this notice, applicants are required to sign an acknowledgment confirming receipt of the information. This acknowledgment serves as proof that the applicant was informed about the selection criteria before submitting their application.
If this acknowledgment is not signed, it creates a presumption that the notice was not provided, potentially impacting the landlord's ability to deny the application based on these criteria.
Landlords are required to obtain a tenant's written consent before conducting a tenant background check in Texas. This requirement is governed by both federal and state laws.
Under the Fair Credit Reporting Act (FCRA), landlords must secure written permission from prospective tenants before accessing consumer reports, which include background checks and credit evaluations. This ensures that tenants are aware their personal information will be reviewed and helps protect their privacy rights.
Additionally, Texas law requires landlords to inform applicants about how their information will be used and obtain their acknowledgment before running any background check in Texas for rental applications.
To comply with these regulations, landlords typically include a consent clause within the rental application form. This clause should clearly state that by signing the application, the applicant authorizes the landlord to conduct necessary background and credit checks.
Failure to obtain proper consent can lead to legal repercussions and undermine the integrity of the screening process.
Below is a summary of the steps involved in a typical Texas tenant screening.
Begin the tenant screening process by asking pre-qualification questions to determine whether applicants meet essential criteria, such as income level, rental history, and their desired move-in timeline.
Next, gather vital information from applicants, including their contact details, previous addresses, employment history, proof of income, and consent for conducting background checks.
Proceed to perform a thorough tenant background check in Texas that includes credit history, criminal records, and rental history. Utilizing an online screening service can streamline this process and ensure you access these reports legally and efficiently.
When selecting an online tenant screening service, prioritize the accuracy and comprehensiveness of the information provided about potential tenants. Consider factors such as pricing, data security measures, and the speed of report delivery.
For example, Landlord Studio's tenant screening service offers comprehensive reports for Texas landlords that include credit scores, rental history, background checks, and eviction records. Reports can be generated in as little as 30 minutes, with prices starting at $45.
After reviewing the reports, assess each application using consistent criteria to ensure compliance with tenant screening laws in Texas.
It is essential for landlords to promptly inform applicants of their decisions and provide clear explanations for any denials to uphold transparency throughout the process.
While finding the desired tenant is a top priority during tenant screening, it's also important for landlords to ensure they are in compliance with Texas tenant screening laws. This includes laws surrounding application fees, consent for background checks, disclosures, and more.
Not following these regulations can lead to a lot of legal issues, such as discrimination claims or improper handling of application fees. That's why we recommend you always research tenant screening laws Texas 2024 to stay up-to-date.
An easier alternative is to use a reliable tenant screening service, like Landlord Studio. This software can further streamline compliance by providing comprehensive background checks and ensuring that all necessary disclosures are made.
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