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Minimum Requirements for Lease Application Approval

1. All Lease Signatories Must Personally Visit the Property & Approve Its Condition

All Prospective Tenants must personally visit the property and approve its condition before the Broker will prepare and present a Lease for signature. This policy applies to all Prospective Tenants, including both spouses of a married couple and individuals moving from out of town or out of state who do not want to travel to the Birmingham area to view rental properties before executing a Lease. Viewing by a third party, including a Real Estate Agent, friend, family member or viewing by video conference, will not be accepted by the Broker in lieu of personal visit by all Signatories.

2. Pre-Paid Leases Are Not Allowed in Certain Situations

In the listing agreement between the Broker and the Owner, the Owner instructs the Broker to accept or not accept offers for pre-paid leases.  In the situation where the Owner instructs the Broker to accept a pre-paid lease offer the Applicant must have a Debt to Income ratio of no more than 36%.  In the situation where the Owner prohibits pre-paid leases, Broker will not contact the Owner to ask them if they would reconsider as this could be considered a violation of Federal Fair Housing Laws.

3. Minimum Credit Score, Rent to Income Ratio & Debt to Income Ratio For Unmanaged and Managed Leases

For property listed on or after December 8, 2024, the Minimum Credit Score Requirement correlates with the Rental Rate Range as follows:

  • 600 – 639 for properties that rent between $1500 to $1999
  • 640 – 679 for properties that rent between $2000 to $2999
  • 680+ for properties that rent for $3000 or more

The Gross Income to Rent Ratio shall be at least 3 to 1.

The Debt to Income Ratio for “Lease Only” Properties shall be no more than 36%.  

The Debt to Income Ratio for “Managed” Properties shall be no more than 41%.

For the purpose of this disclosure the term Credit Score shall refer only to the TransUnion ResidentScore® Model Credit Score.  In certain situations and by special request the Broker will also accept TransUnion FICO® 8 Model Credit Scores.  

In order to avoid the appearance of impropriety, the Broker will not permit the Owner to change the DTI Ratio within a current listing term (which is usually approximately 30 days).  In order to avoid the appearance of impropriety the Broker will not notify the Owner when a lease application is declined for a non-qualifying DTI ratio.

For debt to income ratios that are slightly over the required 36% or 41% the rounding rule shall be any percentage equal to or less than 0.4% over shall be rounded down and considered qualifying.

The Broker will not accept a copy of the Applicant’s Credit Report emailed by the Applicant

4. Student Loan Debt to Income Calculation

When an Applicant has deferred student loans or loans in forbearance and the monthly payment amount is not disclosed on the credit report then the Broker will use the Fannie Mae guideline of 1% of the outstanding student loan balance as the monthly payment to use for the calculation of the Applicant’s Debt to Income Ratio.

5. Past Due Accounts

If you have one or more past due accounts, the total cannot exceed the amount of one month’s rent.  If you present an Application and your Credit Report reveals that you have past due account totals that are greater than one month’s rent then the Broker will decline your Application.

6. Delinquent Accounts

For the purpose of this disclosure the term delinquent accounts shall be defined as including, but is not limited to: Charged Off Accounts, Collections (including Medical), Judgments, Liens, Garnishment, Attachment, etc.  For the purpose of calculating delinquencies in the annual Debt to Income Ratio, the delinquencies are considered due in full.  The current monthly obligations will be annualized and added to the total delinquency amount due which cannot exceed the maximum DTI  ratio indicated in the online advertising.  If you present an Application and your Credit Report reveals that your annualized monthly obligations plus your delinquency total is greater than the maximum DTI ratio indicated in the online advertising then the Broker will decline your Application.

7. The Broker Acknowledges No Duty or Obligation to Accept Documents from the Applicant or Third Parties Commenting on Information Currently Showing in the Applicant’s Credit and Background Report

The Applicant’s credit report, background report, or credit history (“Credit Report”) may show debts and or other negative information upon which the Broker bases a decision to deny Applicant’s Application. Applicant is responsible for ensuring that Applicant’s Credit Report accurately reflects the information relative to Applicant at the time the Application is submitted. Broker cannot and will not receive or consider information contrary to or challenging debts and or other negative entries on Applicant’s Credit Report, either prior to or after Broker makes a decision on Applicant’s Application and submits an Adverse Action Notice. Applicant understands that Broker will refer only to the Credit Report in reviewing Applicant’s Application and will not receive or consider documentation outside of the Credit Report.

Mortgages will be included in the Debt to Income Calculation prior to closing and the updating of the Applicant’s Credit Report.  The Broker acknowledges no duty to the applicant to assume the sale of a property, a closing will or has taken place and or that a Credit Report Updating will take place.

In the event Applicant disagrees with information reflected on Applicant’s Credit Report, Applicant may refer to applicable federal law regarding Applicant’s ability to challenge or correct Applicant’s Credit Report by challenging specific debts and or other negative information with the Credit Reporting Agencies or prior creditors. Broker is not an attorney, is not offering legal advice, and suggests that Applicant consult with an attorney regarding Applicant’s rights to challenge negative information on the Credit Report. More information may be found here.

8. Knowledge-Based Authentication (KBA) Questionnaire

The primary method that the Broker uses to verify the identity of Applicants is the use of Knowledge-Based Authentication Questionnaires often referred to as a KBA.  The KBA will be presented when the Applicant starts the process with TransUnion to transfer their Credit Report to the Broker.    

Knowledge-Based Authentication is only available for US citizens and US residents with valid social security numbers. In addition, signers must have public records to generate questions and answers. Otherwise, they cannot use Knowledge-Based authentication.

If an Applicant is a Legal Resident with a TIN but public records are insufficient to generate questions for a KBA, then the Applicant will have to consent to a “hard pull” Credit Report Check.  

If you have power of attorney to represent someone who is interested in a rental property, do not attempt to process the KBA. Contact the Broker during business hours to request a link to facilitate the transfer of the Applicant’s checking account information through a third party.

It is strictly prohibited to request an application with the intent of passing a Knowledge-Based Authentication (KBA) questionnaire for the purpose of delivering the application to another individual. When the Broker receives an application from an individual who did not complete a KBA or whose identity was not verified according to a method used and approved by the Broker, then the Broker will issue a Federal Trade Commission (FTC) Red Flags Notice. The Broker does not acknowledge any right or privilege assumed by an Applicant to ignore the Identity Verification process set forth in this disclosure. The Broker is not an attorney and does not give legal advice. If you have questions or concerns about your rights as an Applicant for rental housing, contact an Attorney.

9. Agency Disclosure

A. Dean & Associates Inc, hereinafter referred to as “Broker”, is the Single Agent of the Property Owner. The Broker shall serve as a Transaction Broker for the Rental Customer, assisting the Rental Customer with the Lease Application and the execution of the Lease.

B. Many of the Property Owner’s interests are reflected in the terms and conditions found below. When the interests of the Rental Customer and the Property Owner do not align, it is the legal duty of the Broker to protect the Property Owner’s interests.

10. Rental Customers and or Applicants Who Want to Request an Exception to the Broker’s Published Policies

A. Our policy is to provide real estate leasing services in strict compliance with all applicable laws, rules and regulations, and only to Applicants who can clearly demonstrate that they qualify on the Published Minimum Requirements for Lease Application Approval.

B. Broker is authorized by Owner to deal with Applicant with regard to all aspects of the Property and the application process. To prevent confusion and to preserve the line of communication, Applicants will not have the option to communicate directly with Owner. All communications to Owner are to go through Broker in this capacity, and Broker will relay Applicant’s communications and requests after which Broker will act upon Owner’s responses. In the situation where the Applicant is requesting that the Owner grant an exception to the Broker’s published criteria and the Owner does not reply within 7 calendar days, the answer will be considered to be in the negative and the matter will be closed.

C. In the situation where the Broker forwards a request to the Owner from a Rental Customer to make an exception to published criteria for Lease Application approval, the Broker is not making an implicit or explicit affirmation that Broker will be able to agree to facilitate the exception. Broker’s policies and published criteria are important, have been developed carefully, and are applied uniformly. In the event an exception is requested by Rental Customer and permitted by Owner with which Broker disagrees, Broker reserves the right to withdraw from the relationship among Rental Customer and Owner to allow Rental Customer and Owner to reach agreement between themselves as desired.

D. The request for an exception to be granted by the Owner must be presented to the Broker in an email, which the Broker can forward to the Owner. This rule is to establish a record of the specific request for an exception and to establish the record that the Broker did convey the request to the Owner.

11. Rental Arbitrage, Sub-leasing, Assignment, etc. is Strictly Prohibited

Tenant shall not sublet, under-lease, sub-rent, sub-lease, offer rooms for rent, or otherwise take on occupants not identified in this Lease. Tenant shall not offer any portion of the premises for a sublease by placing on the same any “to rent”, “furnished room”, “room to rent”, or similar sign or notice or by advertising the same in any newspaper, on any short-term rental website such as VRBO or AirBnB, or any place or manner whatsoever. Any arrangement listed above or any other transfer or assignment of this lease, shall be null and void at the option of the Landlord. Tenant agrees that the breach of this provision shall be considered a material noncompliance with the terms of this lease, entitling Landlord to deliver written notice to terminate this lease pursuant to Alabama law.

12. Lease Terms for Approximately 12 Months Unless Otherwise Stated

The Broker writes Leases for approximate 12 month Lease terms. If the owner makes the property available for a 6 month lease it will be stated in the advertising. Requests for lease terms that exceed 12 months will be considered on a case by case basis, but in no case will a lease extend longer than approximately 18 months.

13. No Extended Move In Dates

Applications with a move in date of more than 40 calendar days from the day the application is submitted will be automatically rejected. This rule should not be understood to mean that the Owner would necessarily accept any move in date within the 40 day limit. It is the Owner’s sole prerogative to determine their acceptable move in date.

14. Properties may be Temporarily Taken Off the Market in Certain Situations

The time between when an Application is deemed “approvable” by the Broker and the Lease is signed can be several days. In order to avoid receiving Applications while the Lease is pending signature, the Broker may discontinue advertising for a property.

15. About Pending, Active and or Recently Discharged Bankruptcies

Applicants presenting an Application while a Chapter 7 Bankruptcy is pending will be automatically declined.  Applicants presenting an Application with an active Chapter 13 Bankruptcy will be automatically declined.  Applicants presenting an Application who have recently had a Chapter 7 or a Chapter 13 discharged will not automatically be declined, but must meet the minimum Lease Application approval requirements, including having the advertised minimum required TransUnion ResidentScore®.

16. About Evictions & Repossessions

Applicants applying with evictions and or repossessions in their history will be automatically declined by the Broker. The term “eviction” shall refer to, but not be limited to unlawful detainer, ejectment, forcible entry, etc.

17. Authorized User Policy aka “Piggybacking”

When an individual is made an Authorized User on another individual’s credit card or revolving credit account their credit score may be positively affected if the Primary Cardholder has good or excellent credit. Individuals with good credit sell Authorized User access to their credit cards and revolving credit accounts commercially and the practice is sometimes referred to as “piggybacking”. The Broker is aware that piggybacking is legal, but the Broker and other lenders consider this to be a deceptive practice. When a review of the Applicant’s credit report reveals that 50% or more of the Applicant’s total credit card limit and or revolving credit limit is supplied by being an Authorized User on another individual’s credit card(s) and or revolving credit account(s) and that individual is not a spouse, then the Broker will automatically decline the Application and issue an Adverse Action Notice and depending on the circumstances the Broker may also issue a Federal Trade Commission (FTC) “Red Flag” Notice.

18. Citizen or Legal Resident

All Applicants must be legal residents of the United States. All Applicants will be asked if they are a United States Citizen, a permanent resident alien, a non-permanent resident alien, or an illegal alien. If the Applicant declares they are a permanent or non-permanent resident alien, they must provide supporting documents. If the Applicant fails to provide the required proof, then their Application will be declined. If the Applicant declares that they are an illegal alien, then their Application will be declined.

19. US Credit Scores Required

All Applicants must have a credit report and a qualifying TransUnion ResidentScore®. 

There are two exceptions to this rule. (1) When one member of a married couple individually qualifies on the credit and income requirements and the other spouse does not have a credit report, then the Broker will make an exception to this rule. When both spouses have a credit report each must have a qualifying TransUnion ResidentScore®. (2) When a Foreign National who is an employee of a multinational corporation is transferred to the Birmingham Area and does not have a US Credit File then the Broker will consider leasing to this individual provided the following conditions are met:

  1. The Corporation that employs the Foreign National or a third party, such as a relocation agency, agrees to guarantee the lease.
  2. The Corporation that employs the Foreign National or a third party, such as a relocation agency, must be registered with the Alabama Secretary of State.
  3. The Corporation that employs the Foreign National or a third party, such as a relocation agency, affirms in writing that the subject individual does not have a US Credit File.
  4. The Foreign National Employee agrees to provide their Passport and a TIN or SSN that is current (not pending or expired).
  5. The Foreign National Employee agrees to sign a Consent to a Credit Check and Background Investigation in order to confirm that there is no US Credit File.
  6. The Corporation that employs the Foreign National or a third party, such as a relocation agency, that will guarantee the lease must have a business credit report available to be purchased online by the Broker.
  7. The Corporation Guaranteeing the lease must be rated in Dun & Bradstreet and have at least a 5A1 rating.  
  8. Relocation Agencies are required to provide the engagement, retention, or services agreement with the Corporations they represent.
  9. The Broker will hold the Security Deposit.

20. Demonstrating Financial Capacity to Pay Rent

The demonstration of financial capacity to pay rent is based on the declaration and documentation of recurring income. For the purposes of this disclosure, recurring income is defined as including but not limited to: employment income, self-employment income, Social Security Benefits, Disability Benefits, required distributions from Retirement Accounts, Dividends, Alimony, Child Support, etc. Voluntary withdrawals from Retirement Accounts are NOT considered recurring income.

21. Documentation Requirements for W-2 Employed Applicants

For the purposes of this disclosure, Employed Applicants shall be defined as individuals who receive a W-2.

A. Minimum Requirements for Lease Application Approval include but are not limited to:

  1. Single Applicants and or Joint Applicants must declare qualifying recurring income or the Broker will reject the application without pulling the credit report.
  2. Single Applicants and or Joint Applicants must document qualifying recurring income or the Broker will reject the application without pulling the credit report.
  3. Employment income must be stable, consistent and ongoing. The Applicant will provide verifiable documentation of income for the previous 12 months and employment income should seem likely to continue for at least 1 year after lease execution.
  4. Employed Applicants must provide IRS Tax Transcripts for the most recent filing period and previous filing period. Tax filing extensions will not be accepted.
  5. Employed Applicants must provide their most recent pay stub showing their year to date gross income and itemized deductions.
  6. All income information provided by the Applicant must be verifiable through 3 months of checking account bank statements.
  7. Applicants who are taking new employment must also provide their Letter of Employment stating their new annual salary.  When an Applicant presents Employment Documentation stating they have an opportunity to earn additional or bonus income relate to their performance over and above guaranteed income, then the assumption of additional or bonus income shall not be assumed to exceed 10% of the guaranteed income for the purpose of calculating the Applicant’s Debt to Income Ratio.

 

B. Conditions that can Cause Your Lease Application to be Declined include but are not limited to:

If your employment is inconsistent and or irregular it may cause your Application to be declined.

  1. Gaps in your employment history may cause your Application to be declined.
  2. If you have had 3 or more Employers within the previous 12 months it may cause your Application to be declined.
  3. If your employment is classified or offered as “Temporary” it may cause your Application to be declined.
  4. A history of income in a declining industry may cause your application to be declined.
  5. Providing a pay stub or any payment documentation that does not include year to date gross income and itemized deductions may cause your Application to be declined.
  6. The Broker will not accept employment income information from mobile payment services such as Google Pay, Cash App, Venmo, Apple Pay, etc.

22. Documentation Requirements for Non W-2 Recurring Income Applicants

For the purposes of this disclosure, a Non W-2 Applicant shall be defined as a person who has recurring income but is not a W-2 employee.

A. Minimum Requirements for Lease Application Approval include but are not limited to:

  1. Single Applicants and or Joint Applicants must declare qualifying recurring income or the Broker will reject the application without pulling the credit report.
  2. Single Applicants and or Joint Applicants must document qualifying recurring income or the Broker will reject the application without pulling the credit report.
  3. Applicants must provide personal IRS Tax Transcripts for the most recent filing period and previous filing period. Tax filing extensions will not be accepted.
  4. Applicants must have had a qualifying income for the subject property in the previous 2 Tax Filing Periods.
  5. Recurring income must be stable, consistent, and ongoing and should seem likely to continue for at least 1 year after lease execution.
  6. The trend of year to date income since the previous tax filing must be equal to or greater than the last tax filing.
  7. When applicable, the Broker will use the Applicant’s adjusted gross income from their tax return and add back non-cash expenses such as scheduled depreciation for assets.
  8. The Broker requires documentation of ongoing Recurring income after the last tax filing year with a Business Profit & Loss Statement and Business Checking Account Statements. The information in a Profit & Loss Statement includes but is not limited to: Net Profit and Loss = [(Total Revenue + Additional Income) – (Cost of Products and Services + Operating Costs)] – (Interests + Taxes + Depreciation + Amortization). If you do not provide a Profit & Loss Statement for your Business, the Broker will not approve your Application. If you do not have a Business Checking Account for your Business and the Deposits into your Personal Checking Account from your Business do not indicate clear and obvious attribution from your Business then the Broker will not approve your Application.

 

B. Conditions that can Cause Your Lease Application to be Declined include but are not limited to:

  1.  Gaps in your Business history may cause your Application to be declined.
  2. A history of income in a declining industry may cause your application to be declined.
  3. The Broker will not accept income information from mobile payment services such as Google Pay, Cash App, Venmo, Apple Pay, etc.

23. Documentation of Assets are Not Accepted to Demonstrate Financial Capacity to Pay Rent

The verification of documentation of assets including, but not limited to: real property, stocks, bonds, etc, is not a real estate service provided by the Broker. Financial capacity to pay rent is documented on recurring income only. In addition, the Broker does not consider the documentation of cash on hand, including, but not limited to: cash in checking accounts, savings accounts, money market accounts, CDs, etc.

24. IRS Letter Required in Certain Situations

In the situation where an Applicant(s) only recurring income is Social Security and the Applicant is not required to file income tax returns, then the Broker will require a Verification of Non-Filing Letter from the IRS.

25. Who is Required to Present a Joint Application

Both spouses of married couples must submit a Lease Application. It is strongly recommended that both spouses submit their lease applications simultaneously. When the Broker receives an Application from one spouse and not the other, the Broker will process the first Application promptly. If the Application is not “approvable” the Broker will issue an Adverse Action Notice. The Broker will not notify the first applicant if the application is approvable, but will wait until the end of business next day to receive the second spouses application. Joint Applications that are not completed within the time period described above will be rejected as Incomplete. When a Rental Customer presents a Lease Application while a divorce is pending, the non-occupying spouse will be required to present an Application and sign a Cosigner Agreement.

26. No Combined Income Qualification for Unmarried Couples or Unmarried Family Members

Unmarried couples and unmarried family members cannot qualify collectively on the income requirement the same as a married couple can when they present a Joint Application.

27. No Roomates

It is the Broker’s understanding that Federal Fair Housing Laws do not specify roommates as a protected class. Therefore, the Broker acknowledges no affirmative duty to accommodate roommates.

For the purpose of this disclosure, the term “roommates” shall not apply to two individuals presenting as an “unmarried couple”. The term “roommates” shall apply to unrelated individuals occupying a single family property.

This disclosure is not set forth as legal advice. The Broker is not an Attorney and is not issuing legal advice in this disclosure. To obtain legal advice on this subject, please consult with an Attorney.

28. Application Processing Policy

The Broker does not render an approve or decline decision based on the order of when applications are submitted, he renders those decisions based on the order of when they are completed. Properties are not put on hold when an application is submitted. 

29. No More than One Family per Home

For the purpose of this disclosure, a “family” shall be defined as a group residing together and consisting of parents, children, and other relatives by blood or marriage. The Broker and the Landlord retain the right of freedom of contract to lease with whomever we want as long as it is not for a discriminatory reason against a protected class. Two or more families residing in one home are not a protected class. It shall be the Broker’s policy not to rent to more than one family per residence.

30. Background Reports

In addition to the Broker pulling Applicants’ credit reports, the Broker will also pull background reports, including but not limited to, nationwide criminal history reports, on all Applicants and on all occupants age 19 and older. Occupants 19+ years old who are not Applicants will be required to sign a consent form and pay a $38 fee.

31. The Broker’s Corporate Lease Policy

In the Listing Agreement between the Broker and the Property Owner the subject of Corporate Lease Offers is not addressed.  It is the Broker’s understanding that individual Property Owners cannot be compelled to accept a Corporate Lease Offer.  Therefore this entire policy hinges on whether or not the Property Owner will accept a Corporate Lease Offer.  

If a Property Owner expresses interest in considering a Corporate Lease Offer, then the Broker’s conditions are as follows:

  1. The Corporation must be registered with the Alabama Secretary of State.
  2. The Corporation shall not be named as the Tenant, but will be a Co-Signer.
  3. The Occupant must be an Employee of the Corporation.
  4. The Occupant must be residing in the US legally and have an active SSN or ITIN.  
  5. The Occupant must consent to Credit and Background Check.
  6. The Corporation must be rated in Dun & Bradstreet with at least a 5A1 rating.

LEGAL DISCLAIMER:

The information contained above is not set forth as Legal Advise.  The Broker is not an Attorney.  None of the Broker’s Agents are Attorneys.  The Broker or his Agents do not provide legal services or legal advice.  If you have questions about your rights and responsibilities as a Rental Customer, Applicant, or Tenant, please consult with an Attorney.