A Landlord's Guide to Tenant Screening in Alaska

Finding the right tenant is the single most important step in protecting your investment property. A well-qualified tenant pays rent on time, takes care of your property, and makes your life as a landlord easier. A difficult one can cost you thousands in lost rent, legal fees, and repairs.

This guide will walk you through the essential steps and legal requirements of tenant screening in Alaska. By following a consistent, compliant process, you can make informed decisions with confidence. We’ll cover the application process, background checks, credit reports, and the critical Fair Housing laws you must follow.

Disclaimer: This guide is for informational purposes only and does not constitute legal advice. We recommend consulting with a qualified attorney for any legal questions regarding your specific properties.

Step 1: Establish Your Rental Criteria (Before You Do Anything Else)

Before you even list your property, you need to decide on your ideal tenant’s qualifications. The most important step is to create a written, objective list of screening criteria. This is your scorecard for every applicant. It’s your best defense against claims of discrimination because it proves you are making fair, consistent, and business-based decisions.

Your criteria should include:

• Income Requirements: A common standard is requiring an applicant’s gross monthly income to be three times the monthly rent.
• Credit Score Minimum: A minimum credit score can indicate financial responsibility.
• Employment History: Stable employment is a positive indicator.
• Rental History: You should require positive references from previous landlords and specify that you will not accept applicants with a history of evictions.
• General Policies: Clearly state your policies on smoking, pets, the number of occupants per unit, etc.

Step 2: The Rental Application

The rental application is your primary tool for gathering the information you need to run your checks. Your application should collect:

• Full name and contact information for all adult applicants.
• Social Security Number for screening purposes.
• Current and previous addresses, along with contact information for previous landlords.
• Current and previous employment details and verifiable income.
• Personal and professional references.

The Application Fee in Alaska

In Alaska, there is no state law that limits the amount you can charge for an application fee. However, the fee should be reasonable and intended to cover the actual cost of the screening process. It is crucial that you inform all applicants in writing that this fee is non-refundable.

Step 3: Running Background and Credit Checks

With a completed application in hand, you can begin the verification process.

Written Consent is Mandatory

Before you run a credit or background check, you must obtain written consent from the applicant. This is a non-negotiable requirement under the federal Fair Credit Reporting Act (FCRA). Most rental applications have a section for this signature. Without it, you cannot legally proceed.

What to Look For:

• Credit Report: Look beyond the score. A full credit report shows a history of on-time payments, any accounts in collections, bankruptcies, and the applicant’s overall debt-to-income ratio.
• Criminal History: Alaska state law does not prohibit landlords from considering an applicant’s criminal history. However, you must apply your criteria consistently. Denying all applicants with any criminal record could be seen as discriminatory. A best practice is to consider the nature and severity of the crime and when it occurred.
• Eviction History: A prior eviction is a significant red flag. Tenant screening services can search statewide and national databases to see if an applicant has a history of being evicted.

Step 4: Complying with Fair Housing Laws

This is the most critical part of the process from a legal standpoint. Both federal and state laws prohibit discrimination in housing.

• Federal Protections: You cannot discriminate based on race, color, religion, sex, national origin, familial status (having children), or disability.
• Alaska State Protections: Alaska law adds marital status and pregnancy to the list of protected classes.

The key takeaway is this: your screening criteria must be applied uniformly to every single applicant. If you set an income requirement of 3x the rent, you must apply it to everyone. Making an exception for one applicant and not another can open you up to a discrimination lawsuit.

Step 5: Making a Decision and Taking Action

Once you have reviewed the application, credit report, and background check, you can make an informed decision.

• Approval: If the applicant meets all of your pre-defined criteria, congratulations! You can move forward with signing the lease agreement.

• Denial (Adverse Action): If you deny an applicant for any reason based on information found in their credit or background check, you must provide them with an “adverse action notice.”

This is another requirement under the FCRA. The notice must state:

• The reason for the denial.
• The name, address, and phone number of the screening company that provided the report.
• A statement informing the applicant of their right to dispute the accuracy of the information in the report.

Protect Your Investment with a Professional Process

A thorough and legally compliant tenant screening process is the bedrock of successful property management in Alaska. It protects your investment, minimizes your financial risk, and helps ensure a stable, positive landlord-tenant relationship from day one.

Feeling overwhelmed? All Star Realty AK handles the entire tenant screening process for property owners in Anchorage and Eagle River, ensuring legal compliance and peace of mind. Contact us for a free management consultation today.