Is a Rental Application Legally Binding?

December 27th, 2018
Is a Rental Application Legally Binding?

As a landlord, it’s normal procedure to ask potential tenants to fill out a rental application. After all, you are renting out a property to them and they are essentially strangers to you. Because of this, it’s also common to run background checks on potential tenants.

But does this mean that the rental application is a legal binding contract between you and your future tenants? When you collect a rental application from an applicant, it is crucial to understand what will be required of you and the applicant at that point. Knowing if a rental application is legally binding can help you to handle the rental application process the right way.

Man signing a rental application contract

Is a Rental Application Legally Binding?

Is a rental application legally binding? As someone who is renting out a property, this should be one of the more important things you should understand.

When you talk about rentals, many people are inclined to believe that the rental application is legally binding. However, that isn’t the case; the main purpose of a rental application is to not lock you and your tenant into a legally binding agreement. Rather, the application is meant for you to gain more information about your tenants, in order to make an informed decision on who to rent the property to. It’s important for you to know that a filled-out application doesn’t equate to rental commencement.

For the purpose of screening, standard rental applications that you hand out will usually include a spot for signatures for screening consent.

The signature on a rental application ensures that:

  • The information that the applicant provided on the rental application is correct and answered truthfully.
  • You can run a credit and other background checks on the applicant.
  • You can request verification of the information found on the rental application.

Since the rental application is a part of the screening process, there is no required
payment of rent nor a security deposit.

When the process is done, and you have accumulated multiple rental applications, it’s a good idea to retain the applications of your tenants. That means if you find out that your tenant has lied or stated false information on their application, you have a record of the information provided. Plus, keeping the applications can also provide protection for yourself. A finished application can be used as proof that applicants gave their consent for tenant screening reports.

To summarize, it is a standard procedure to have your potential tenants fill out a written or online rental application form. Although it is not legally binding in a traditional sense, prospective renters usually do give consent and will submit themselves to various background checks. The only traditionally legally binding agreement that is made between a tenant and a landlord is usually the “rental agreement”, or a “lease agreement”.

Magnifying glass on a rental application

Is a Rental Application a Contract?

A typical rental application is neither a legally binding document to rent out a dwelling nor should it be considered a contract. The purpose of a rental application is to inform you of important or relevant information that you’ll need when deciding which tenant will move into the property.

However, a rental application can have some legal significance as listed above when a tenant signs the document.

Rental Applications and Agreements

Only after you approve a tenant’s rental application would you then move on to sign a lease agreement. Once the lease agreement is signed, that will constitute a legally binding agreement between you and the tenant to reside in a dwelling unit.

In Closing

So, is a rental application legally binding? The use of a rental application is designed to assist in choosing a tenant and does not create a legally binding relationship between yourself and the tenant. The responsibility is instead handled by a lease agreement. But you should keep in mind that even though a rental application is not a contract, it still has legal significance related to your ability to legally carry out the tenant screening process.