You are legally free to choose among prospective tenants as long as your decisions are based on legitimate business criteria.  You are entitled to reject applicants with bad credit histories, income that you reasonable regard as insufficient to pay the rent, or past behavior….such as property damage or consistent late rent payments….that makes someone a bad risk.  A valid occupancy limit that is clearly tied to health and safety or legitimate business needs can also be a legal basis for refusing tenants. It goes without saying that you may legally refuse to rent to someone who cannot come up with the security deposit or meet some other condition of the tenancy.

Fair Housing laws specify clearly illegal reasons to refuse to rent to a tenant.  Federal law prohibits discrimination on the basis of: race, religion, national origin, gender, age, familial status, or physical or mental disability (including recovering alcoholics and people with a past drug addiction).  Many states and cities also prohibit discrimination based on marital status or sexual orientation.

Anybody who deals with prospective tenants must follow Fair Housing laws.  This includes owners, landlords, managers, and real estate agents, and all of their employees.  As the property owner, you may be held legally responsible for your employees discriminatory statements or conduct, including sexual harassment.

Consistency is crucial when dealing with prospective tenants.  If you do not treat all tenants more or less equally….for example, if you arbitrarily set tougher standards for renting to a member of a racial minority…you are violating federal laws.