Here, learn about application fees, tenant selection policy, security deposits, and other things to consider before applying to rent a place to live. Understand the importance of seeing the actual unit; what information should be included in the rental application; and the relevance of your credit history. because application fees and deposits are usually nonrefundable. Tenants should be certain that they want to live in a unit before applying for it or putting any money down.
Disclaimer: The contents of this article are summarized and reproduced from the website of the Austin Tenants Council. The Austin Tenants Council serves the Austin, Texas, area, but its website has useful information for all Texas residents.
Tenant Selection Policy
When giving prospective tenants a rental application, the landlord must also provide a written “tenant selection policy.” The policy should state the grounds for which the rental application may be denied, including things such as the applicant’s criminal history; previous rental history; current income; credit history; or failure to provide accurate or complete information on the application form. By receiving the policy before applying or putting any money down, the applicant can decide whether he/she will qualify to live in that particular rental unit.
An application fee is often required as a fixed cost to compensate the landlord for checking credit reports and processing the application. Typically application fees are $25 to $35 per person, but there is no limit on what a landlord can charge for an application fee. Thus, applying for a rental unit can quickly become expensive if it costs two roommates $50 every time they apply.
Many applications state that if a prospective tenant turns down the rental unit after submitting an application, the deposit will be forfeited. Typically there is no grace period to back out of the application once it is signed. If the landlord states that a tenant can cancel the application and get the deposit back, it should be included in writing in the application agreement.
Even if an application agreement is not signed, the landlord may have grounds to keep some or all of a deposit based on losses the landlord suffered. If a tenant has entered into a lease with a landlord and paid a security deposit or prepaid rent and does not move into the unit, the tenant is entitled to a full refund only if the tenant finds a replacement tenant satisfactory to the landlord who moves in by the date the lease was to begin. On the other hand, if the landlord secures the replacement tenant, the landlord may deduct from the security deposit or rent prepayment any amount agreed to in the lease as a lease cancellation fee or the landlord can deduct actual expenses incurred including an amount for the landlord’s time in finding a replacement tenant. Money should never be put down on a rental unit unless the tenant finds the unit acceptable.
See the unit, not a model, before applying.
A tenant should never apply for a rental unit until the actual unit has been seen. A tenant should never accept being shown a model apartment. A model apartment is just that—a model. No one lives in the unit, and it is usually in considerably better shape than the other units. Relying on seeing a model apartment is the same as buying a used car based on being shown an example of what the dealer’s used cars are like. If a landlord will not show the actual apartment, there is probably a very good reason—it’s a dump!
Tenants also need to make certain that all information about the rental unit is indicated on the application. This is important since it may be difficult to change the terms of the proposed lease once the application is signed and the deposit has been received. Otherwise, the landlord may approve the application based on terms that are unacceptable to the tenant. If the tenant then refuses to sign the lease, the landlord may keep the application deposit. As with all written agreements, the tenant should insist that the landlord provides a copy as soon as it is signed.
What the Application Should Include
- The unit number;
- The amount of the security deposit;
- The amount of the rent;
- The move-in date and the length of the lease term;
- The names of all people who will live in the unit, including all children;
- Pets and the amount of the pet deposit;
- Whether the landlord pays for any utilities;
- Written documentation of any oral promises by the manager or leasing agent such as painting the unit prior to move-in, cleaning the carpet, etc; and
- Any other information that will be used to fill out the lease.
How long does it take to process the application?
Management should disclose in writing somewhere on the application how long it will take to process the application. Section 92.352 of the Texas Property Code states that if the landlord does not notify the tenant within seven days after accepting an application or application deposit, the application is considered rejected. Notice from the landlord can either be by telephone to the applicant, co-applicant, or a person living with the applicant or co-applicant or the notice can be made by mail if postmarked on or before the seventh day after the application is submitted. If the landlord has rejected an application the deposit should be refunded immediately.
Credit History and Co-signers
To approve the application, a landlord may require more from a prospective tenant who does not have a good rental or credit history. The landlord may require an extra deposit, advance payment of the last month’s rent, or a co-signer on the lease. Generally a co-signer needs to be someone who has good credit and a good rental history. Both the co-signer and the tenant should be aware that the co-signer, or guarantor, is liable for the terms of the lease if the tenant does not live up to them. In other words, if a parent co-signs for a child who breaks a lease, the debt will be reported on the parent’s credit record as well as the child’s, and either one or both can be sued for damages due under the lease agreement. In any case, the guarantor is liable only for the original lease term unless otherwise specified in the signed lease or in a subsequent written agreement. According to Sections 92.021(c) and (d) of the Texas Property Code, a guarantor may be held liable for the renewal of the lease only if the original lease states that the guarantor will be liable under renewal and the renewal of the lease involves the same parties as the original lease and does not increase the guarantor’s potential financial obligation for rent.
Other Issues to Ask about before Putting Down a Deposit
- Are any utilities included in the rent?
- Do the units come with A/C, central heat, and/or ceiling fans?
- Are the appliances electric or gas?
- What are the average utility bills in the summer and the winter?
- Are there complex rules?
- Are there regulations for the parking lot?
- How long is the lease term?
- How and when must the rent be paid?
- How much are late fees?
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