Job instability and tenant screening — what landlords can (and can’t) base decisions on

Answer

Intro: Many landlords ask whether they can deny an applicant for “job instability” — irregular hours, frequent job changes, or recent unemployment. In short, landlords may consider employment and income as part of screening, but they must apply policies consistently and follow federal, state and local rules that limit certain practices and protect specific groups.

Main points to understand: landlords commonly verify income and employment to assess an applicant’s ability to pay rent (for example, using pay stubs, bank statements or an employer contact). However, employment status itself is not a federally protected class under the Fair Housing Act, so a neutral screening rule that fairly evaluates ability to pay is generally lawful — provided it does not have a discriminatory effect on protected groups or run afoul of local laws. At the same time, many jurisdictions add protections for “source of income” (for example, rental vouchers, disability benefits or other public assistance), so refusing applicants solely because they rely on a protected source can be illegal in some places.

Practical screening steps and fair practices:

• Use clear, written criteria (income thresholds, acceptable documentation, co-signer rules) and apply them to every applicant to reduce discrimination risk.
• Verify income with consistent documents — pay stubs, bank statements, 1099s or employer verification — rather than subjective impressions of “stability.”
• Consider alternatives when legitimate gaps exist: proof of savings, a co-signer, a larger deposit (where legally allowed) or a shorter initial lease term.
• Keep records of decisions and the documents relied on (dates, who reviewed the application, basis for denial) to defend against complaints.

Consumer-report and notice obligations: if you use credit or tenant-screening reports, follow federal consumer-reporting rules: obtain written authorization, provide any required disclosures, and issue an adverse-action notice when you deny or change terms because of a consumer report. Applicants can request the report and dispute errors, so document your process carefully.

Special considerations: if an applicant’s job instability stems from a disability, pregnancy, or other protected characteristic, treat requests and explanations carefully — a blanket refusal could trigger a fair-housing or reasonable-accommodation issue. Also watch local ordinances: some states and cities recently expanded protections against income-based denials, and rules change often. For example, several jurisdictions have enacted or strengthened source-of-income protections in recent years.

Bottom line: you may consider employment history and stable income when screening tenants, but adopt neutral, documented criteria, check local source-of-income and tenant-screening laws, comply with consumer-reporting rules, and treat protected-class issues and accommodation requests carefully. It’s advisable to consult a licensed local attorney or an experienced property manager before refusing an applicant solely for “job instability” to ensure your policy complies with federal, state and local law.