Phil Querin Q&A: Applicant's References Never Respond

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January 18, 2018
Phil Querin
MHCO Legal Counsel

 

Question:  We recently received an application from a prospective purchaser of a home.  Everything appears to be in order concerning the applicant’s financial capacity, except their references have never responded.  I don’t know why and am concerned about approving the applicant without more reference information.  What can I do?

 

 

Answer:        You should discuss this with the applicant.  Reasonable cause for rejection includes the failure of their references to respond to your request for verification within the time allowed for acceptance or rejection. If your rental application provides that it must be rejected within the 7-day statutory approval period (or it is deemed accepted), you may need to terminate first and then ask questions.  If you carry on a dialogue with the applicant and let the 7-day period expire without rejection, the law provides that you will have automatically accepted them.  So the best approach is to issue the rejection first and then find out the nature of the problem.  You can always rescind your rejection once you are satisfied.  Additionally, in the future, if you feel that the statutory 7-day period is too short, you may increase it, so long as the applicant agrees.  The 7-day statutory period only applies in the absence of the landlord and applicant agreeing to a longer time.  Subject to your attorney’s approval, I suggest you consider inserting a provision in your applications expressly stating that the approval time will be 10, 12, or some other number of days that you feel is reasonably necessary.  Once it is in writing and on the application, then have the applicant sign and agree.

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