Published Minimum Requirements for Lease Application Approval

1. Required First Step in Application

All Rental Customers are required to complete and submit the Pre-Application Disclosures Form before proceeding with the next steps of the Application. That form is the first step in the Lease Application process and part of the Application. (Effective 10/16/2020)

2. Agency Disclosure

A. Birmingham Home Leasing, 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.

3. 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/Background Report

The Applicant’s credit report, background report, or credit history (“Credit Report”) may show 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 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. 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 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:

4. The Broker Does Not Grant Requests to Make Exceptions to Published Policy

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. (Revised 8/2/2021)

B. Effective November 26, 2021, the Management Contract between the Broker and the Owner will specify that Broker is authorized by Owner to deal with the Rental Customer/Applicant with regard to all aspects of the Property and the application process and negotiations.  All communications to Owner are to go through Broker in this capacity, and Broker will relay the Rental Customer’s/Applicant’s communications and requests after which Broker will act upon Owner’s responses. To prevent confusion and to preserve this line of communication, Rental Customer/Applicant will not have the option to communicate directly with Owner. In the event Broker’s management agreement is terminated with Owner, Broker will provide contact information to the Rental Customer/Applicant for Owner, or Owner’s newly appointed manager. (Effective 11/26/2021)

C. For management agreements signed between the Broker and Owner prior to November 26, 2021, the same principle will apply but be enforced as follows. Any Rental Customer/Applicant demanding to communicate directly with the Owner for the purpose of asking for an exception to the Broker’s published policy will be required to put that request in writing and the Broker will present it to the Owner with the understanding that if the Owner agrees to grant said exception, then the Broker will terminate the management agreement and surrender the Rental Customer/Applicant to the Owner. The Broker does not acknowledge that a Rental Customer/Applicant or the Owner has the legal ability to compel the Broker to manage a Rental Customer/Applicant that does not comply with the Broker’s published criteria. (Effective 11/26/2021)

5. Rental Arbitrage, Sub-leasing, Assignment, etc. 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. (Revised 11/16/2021)

6. Lease Terms for Approximately 12 Months Unless Otherwise Stated

A. The Broker writes Leases for approximate 12 month Lease terms which do not automatically convert to a month-to-month agreement after the initial term. In order for the Tenant to remain in the premises after the expiration of the initial term, the two parties must enter into a new written agreement. The Broker does not write Leases for extended terms (more than approximately 18 months).

7. All Lease Signatories Must Personally View the Property & Approve Its Condition

All Prospective Tenants must personally view 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 viewing by the Signatories. (Revised 10/9/2020)

8. How to Secure a Property & Take It Off the Market

The Broker will not forward an Incomplete Application to the Owner for consideration. The Broker presents completed Lease Applications to the Owner for consideration. All properties remain on the market until the Rental Customer has viewed a property, obtained Application approval and requested a Lease to sign for immediate execution. Then the property status shall be changed to “pending” for no more than three business days. If the Rental Customer does not meet their three business days signing deadline, the property will go back on the market. (Revised 11/15/2021)

9. No Pre-Paid Leases

The Broker strictly prohibits the execution of a partially or full pre-paid Lease. (Revised 11/2/2021)

10. 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 a FICO® Score 8 credit score of at least 700 (average of all three bureaus). (Revised 7/3/2021)

11. 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. (Revised 7/10/2021)

12. Authorized User Policy

When a review of the Applicant’s credit report reveals that 50% or more of the Applicant’s total credit limit is supplied by being an Authorized User on another individual’s credit card(s) and that individual is not a spouse, then the Broker will automatically decline the Application and issue an Adverse Action Notice. (Effective 2/24/2021)

13. Minimum Requirements for Lease Application Approval

If there are any technical clarifications or exceptions to requirements, rules, or policies, they will be indicated with an asterisk* and explained at the bottom of this page. These clarifications and/or exceptions constitute new policy.

A. 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. If they answer “no”, they will be asked if they are residing in the United States legally. If they answer “yes” to that question, they will be required to provide proof of legal residency, such as passport, visa, or green card. If the Applicant fails to provide the requested proof, then their Application will be declined. If the Applicant declares that they are not residing in the U.S. legally, then their Application will be declined.

B. CURRENT IRS DOCUMENTS REQUIRED: All Applicants are required to supply their IRS Form 1040 from the most recent IRS filing period. Some Applicants may be required to supply additional IRS documents depending on their source of income. When the IRS documents supplied do not have obvious or apparent evidence of processing, then the Applicant must go online to to download their tax transcript from the most recent IRS filing period and forward that to the Broker. Tax filing extensions will not be accepted. (Revised 11/17/2021)

C. CREDIT SCORE: The Broker will “pull” credit reports on the Applicant from all 3 Credit Bureaus. The specific Credit Scores that the Broker will use to evaluate the Applicant will be FICO® Score 8 for TransUnion, Experian and Equifax. The Broker will calculate the Applicant’s 3 Bureau Credit Score Average. The minimum FICO® Score 8 average credit score required is 700. Applicants who do not have a U.S. Credit File with a Qualifying 3 Bureau Average Credit Score will receive an Adverse Action Notice if they submit an Application. (Revised 4/30/2021)

D. REQUIRED RATIOS TO DEMONSTRATE FINANCIAL CAPACITY TO PAY RENT: It is possible to demonstrate financial capacity to pay rent if you are employed and meet certain income and debt ratios or if you are non-employed and can meet certain asset and debt ratios.

i. INDIVIDUALS QUALIFYING ON EMPLOYMENT INCOME: This policy applies to individuals who are employed. The Applicant must declare and document gross (before tax) income of at least 4 times the rent for the previous 12 months. Employed individuals must submit at least their last two pay stubs. For employment income reported on an IRS Form 1040, the Broker uses Line 1. Employed individuals must also document continued employment with their current employer for at least the last 12 months. (Revised 11/12/2021)

ii. INDIVIDUALS QUALIFYING ON RECURRING INCOME OTHER THAN EMPLOYMENT INCOME: This policy applies to individuals who are self-employed or are “effectively” self-employed. The term “effectively” self-employed refers to individuals that operate a business entity and are in a position to pay themselves at any time during a tax filing period. The Applicant must declare and document gross (before tax) income of at least 4 times the rent for the previous 12 months. Self-employed individuals or effectively self-employed individuals must provide documentation of their income since the last tax filing period. Self-employed individuals or individuals operating as a sole proprietor must provide their Schedule C from the last tax filing period and the Broker will use the figure on Line 31. For individuals filing a Schedule C, the Broker will use the ratio of gross receipts to expenses reported on the most recent Schedule C to apply to income documented since the last tax filing. Individuals operating a S Corporation or Partnership must provide their Schedule E from the last tax filing period and the Broker will use the figure on Line 32. If you receive income from a business entity not mentioned above, please contact the Broker for instructions. (Revised 11/12/2021)

iii. INDIVIDUALS QUALIFYING ON RECURRING INCOME THAT IS COMPLEX AND DIFFICULT TO DOCUMENT: The Broker is not a CPA and it is beyond the scope of real estate services provided by the Broker to evaluate income from complex sources. The Broker is experienced in evaluating common Rental Applications that include employment income and self-employment income. The Broker acknowledges no duty to accept complex declarations and documentations of income “prima facie”. The Applicant bears the burden to demonstrate financial capacity to pay rent and shall not be excused from that burden due to a consideration of complexity. Applicants desiring to document financial capacity to pay rent that are complex will be considered on a case by case basis. (Effective 11/12/2021)

iv. INDIVIDUALS QUALIFYING ON NON-RECURRING INCOME AND/OR LIQUID ASSETS: Individuals who would like to demonstrate financial capacity to pay rent (without recurring income) must declare and document non-recurring income and/or liquid assets of at least 25 times the amount of their annual debt load. Annual debt load is calculated by adding the monthly debt obligations in the Applicant’s credit report, plus the rent and multiplying that figure by 12. Liquid assets are defined as savings accounts, retirement accounts, stocks, etc. and any asset that is easily converted to cash. For the purposes of declaring and documenting assets for a Lease Application with Birmingham Home Leasing, real estate and cryptocurrency are not considered a liquid asset. Personal Financial Statements, including CPA prepared and/or audited Financial Statements, will not be accepted as documentation for liquid assets. (Revised 11/2/2021)

v. INDIVIDUALS QUALIFYING WITH A COMBINATION OF RECURRING INCOME PLUS LIQUID ASSETS: If you are attempting to apply to lease a property with a combination of recurring income and liquid assets please call the Broker for details as this is a complicated issue. For the purpose of establishing a published policy, the Broker sets forth the following. The Broker will first calculate your annual debt to income ratio based off of your recurring income. The Broker will also calculate how much liquid assets you would be required to document if you were qualifying on liquid assets alone (25 x Annual Debt). For every 1% that your annual debt to income ratio exceeds the 43% limit, you must document 1% of the total of liquid assets you would be required to document if you were qualifying on liquid assets alone.

The following example assumes an Applicant applying for a property that rents for $2,000 per month. The Broker adds up all their monthly debt obligations in their credit report and it totals $1,000. The Applicant documents $48,000 in annual recurring income. This would calculate a debt to income ratio of 75%, which is 32% over the maximum allowed of 43%. If the Applicant was qualifying on liquid assets alone, they would need to document at least $900,000. To compensate for the lack of sufficient recurring income, this Applicant must document at least 32% of $900,000 or at least $288,000. (Revised 11/2/2021)

E. BANK ACCOUNT STATEMENTS ARE REQUIRED TO BE TRANSFERRED VIA A THIRD PARTY: Synthetic Identity Fraud is the fastest growing financial crime in our country. It is possible for individuals to fake pay stubs and even credit bureau reports. The Broker has a responsibility to use the most up to date and effective processes and practices to protect his Client (the Landlord). The Federal Trade Commission also prescribes duties and responsibilities to credit processors to publish their policies and procedures to detect fraud. For this reason, the Broker employs checking the Applicant’s bank account transcript(s) via a third party by the name of “The Closing Docs”. By doing this, the Broker can effectively substantiate supplied pay stubs and reasonably verify the Applicant’s identity. Any Applicant requesting relief from supplying their bank account transcripts via The Closing Docs will be denied. (Revised 11/12/2021)


i. The Applicant’s Rent to Gross Income Ratio is between 25.1% and 25.9%.

ii. The Applicant’s Debt to Gross Income Ratio is between 43.1% and 43.9%.

iii. The Applicant provides IRS 1040 for the most recent tax filing period indicating a tax liability in excess of 10% of the Adjusted Gross Income and the Applicant does not provide proof that the tax liability has been paid.

iv. In the situation where a Divorce Decree assigns mortgage payment responsibility to an ex-spouse and the Credit Report still indicates “joint responsibility” and the inclusion of the mortgage payment would make the Applicant’s Gross Debt to Gross Income Ratio in excess of 43.9%.

G. TOTAL OF ALL PAST DUE ACCOUNTS: If the total of all past due accounts showing in the Applicant’s credit report exceed the amount of one month’s rent, the Broker will decline the Application and issue an Adverse Action Notice. (Revised 7/9/2021)

H. WHO IS REQUIRED TO PRESENT A JOINT APPLICATION: Both Spouses of married couples must apply. The Broker has a duty in the Rental Listing Agreement with the Landlord to check credit scores, check for account delinquencies, and calculate “Joint” Rent to Income Ratios and “Joint” Debt to Income Ratios. This cannot be accomplished without the Broker seeing the credit report of both spouses. (Revised 10/2/2020)

I. RENTAL CUSTOMERS APPLYING WHEN A DIVORCE IS PENDING: 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. (Effective 10/2/2020)

J. 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.

K. NO COSIGNERS: (Revised 10/2/2020) Generally speaking, all Prospective Tenants must be able to qualify without the assistance of a Cosigner. There are three exceptions to this rule:

  2. PERSONAL GUARANTEE OF A BUSINESS ENTITY OR CORPORATE LEASE: When a Principal of a Business requests that a Residential Lease indicate their Business or Corporation as the “Tenant”, but the Business or Corporation cannot document financial capacity to make Lease payments and the Principal will occupy the premises, then the Principal of the Business or Corporation may personally guarantee the Lease if they can qualify on the Published Minimum Requirements for Lease Application Approval.
  3. BUSINESS ENTITY OR CORPORATION GUARANTEEING LEASE: Business entities or Corporations that can demonstrate financial capacity to pay rent can lease property for their Employees in certain cases.  Landlords are not required by law to consider Corporate Leases, so the Landlord would have to agree to consider a Corporate Lease offer.

L. NO ROOMMATES: The Broker will not lease to roommates.

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.

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 policy becomes effective March 3, 2020 and changes the previous policy (effective October 16, 2019) which allowed for leasing to roommates limited to the applicable local jurisdictional zoning code. It is the Broker’s understanding that most municipalities in the Birmingham Metro Area limit the number of roommates to no more than two. The Broker is aware of one exception, being Homewood, which allows no more than three.

It is the Broker’s observation that Federal Fair Housing Laws do not specify roommates as a protected class. Therefore, the Broker acknowledges no affirmative duty to accommodate roommates. (Revised 11/3/2021)

M. 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.

14. Other Issues for which the Broker may Decline the Application

There are other issues not included above in Sections 1 through 13 for which the Broker may decline an Application depending on the issue’s status. When delinquencies remain unsatisfied and are in an amount equal to or greater than one month’s rent, the Broker will decline the Application. These delinquencies include, but are not limited to: 

  • Charged Off Accounts
  • Judgments
  • Collections
  • Liens
  • Child Support
  • Garnishment
  • Attachment
  • Delinquent past or present rental obligations
  • Delinquency Judgments for Short Sales and/or Foreclosures

It should also be noted that any debt in an amount equal to or greater than one month’s rent that has been reorganized with a creditor on a new payment schedule will be deemed an account delinquency for which the Broker will decline the Application, irregardless of whether or not the Applicant is current with their payments on the new agreement. The only exception to this rule would be when applicable law prevents the Broker from deeming specific debts as being delinquent after being reorganized, such as student loans, etc.

(Revised 7/10/2021)

15. Issues to be Decided by the Landlord, Not the Broker

A. DOCUMENTATION OF INCOME FROM LEASED PROPERTY: The Landlord is not obligated to accept the Applicant’s additional income from Leases at “face value”. It’s not reasonable to assume that Leased property will have no rental loss due to vacancies in between Tenants or will not have maintenance and repair costs.

B. POLICY REGARDING APPLICANTS WITH CRIMINAL HISTORY: The Broker and the Landlord do not have a policy that mandates an automatic rejection for Applicants with a felony conviction in their Background Report. The Landlord evaluates Applicants with felony convictions on a case by case basis.

16. Technical Exceptions & Clarifications to Stated Rules & Requirements

A. SPOUSES WHO HAVE A CREDIT FILE WITH NO CREDIT SCORE: In some cases, one spouse of a married couple may have a Qualifying Credit Score while the other spouse may not have a Credit File or a Credit File with a Credit Score. The decision on whether to accept a Joint Application from a married couple when one spouse does not have a Credit File or a Credit File with a Credit Score is the decision of the Landlord.

B. APPLICANTS WHO MAY NOT HAVE A CREDIT SCORE WITH ALL 3 BUREAUS: In some situations where an individual is beginning to build a credit history, they may not have a Credit Score with all 3 Bureaus. In addition, they may not have many Creditors reporting to the Bureaus, this is sometimes referred to as a “thin file”. In this situation, the 700 average score rule still applies. The absence of 1 or 2 Credit Scores will not automatically disqualify the Application, but the Landlord may require a Double Security Deposit.

LEGAL DISCLAIMER: 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.