What are the circumstances requiring a Notice of Adverse Action in
a landlord/tenant transaction?
The Fair Credit Reporting Act (FCRA) requires a Notice of Adverse Action in certain circumstances, including
when a landlord takes any action that is unfavorable to the interests of a prospective tenant. Some examples of an
“adverse action” in a landlord/tenant transaction follow: denying an application; requiring a co-signor on the lease;
requiring a larger deposit than would be required for another applicant; and raising the rent. Although the landlord as
decision maker has the legal obligation to provide the notice to the applicant, this topic impacts Realtors who act as
property managers because of the brokerage record retention law, Chapter 475.5015, Florida Statutes (2013). Any
time a landlord’s decision is in any way based on information contained in a consumer report, a broker’s records
should contain the Notice of Adverse Action that a landlord provided to the prospective tenant.
Resources
15 U.S.C.A. 1681a(d) (West, 2013) defines “consumer report.”
15 U.S.C.A. 1681m(a) (West, 2013) describes requirements on users of consumer reports and explains what
information must be provided in the adverse action notice.
Questions & Answers
Q: I am a property manager. The landlord I represent is going to approve the tenant who applied; however, because
the credit report we obtained shows that the tenant’s credit score is lower than the landlord prefers, the landlord
decided to approve at a higher rental rate than advertised. Is the notice of adverse action required? The tenant was
approved, after all.
A: Yes. Denial of an applicant is not the only “adverse action”; in fact, the landlord in this scenario made a decision
“adverse,” or unfavorable, to the tenant by raising the rent. Because that decision was based in part on information
contained in a consumer report, the decision triggers the Notice of Adverse Action under the FCRA. This notice
should be included with the brokerage records for this transaction according to Fla. Stat. 475.5015.
Q: Is it my job to tell the landlord when a Notice of Adverse Action is required?
A: No. Doing so would be giving legal advice, which exceeds your licensure and accordingly is a crime in Florida.
Instead, because you are aware of this legal requirement, it is important for you to suggest that any landlord consult
his or her personal attorney regarding the FCRA’s requirements, based on your personal experience. Also, in order
to have complete brokerage records, you should have a copy of any Notice of Adverse Action that is provided as
part of a transaction.