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Guide

Tenant screening within the law: credit checks, consent and the discrimination line

Screening is the one part of letting where an agency makes an irreversible decision about a stranger, using documents that stranger had to hand over to be considered at all. It is also the part most likely to end in a complaint — usually not because anyone set out to discriminate, but because the criteria were never written down, so when a declined applicant asks why, there is nothing to produce. Here is what you may ask for, what the credit record is actually telling you, and where the line sits.

The obligation starts at the advertisement

Section 4(1) of the Rental Housing Act 50 of 1999 prohibits a landlord from unfairly discriminating against a prospective tenant, and it attaches at three moments: advertising the dwelling, negotiating the lease, and during the lease term. Most agencies think of screening as the middle one. The first is where the avoidable damage is done, because the advert is public and the portal keeps it.

The grounds listed in section 4(1) include race, gender, sex, pregnancy, marital status, sexual orientation, ethnic or social origin, colour, age, disability, religion, conscience, belief, culture, language and birth, and the protection extends to the tenant's household members and visitors. The list is introduced by the word including, so it is not closed, and it tracks section 9(3) of the Constitution.

Common advert phrasing sits on those grounds. "Suitable for a single professional" or "no children" engages marital status and pregnancy. "Must be employed" is defensible as an affordability requirement and indefensible as a blanket rule, since it excludes pensioners and self-employed applicants who can demonstrably pay.

The Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 sits behind this and is the harder instrument. Section 6 prohibits unfair discrimination by any person, and the Act's Schedule lists illustrative unfair practices in housing and accommodation, including red-lining on the grounds of race and social status. Most consequentially, section 13 shifts the burden: once a complainant makes out a prima facie case on a listed ground, it is for the respondent to prove the discrimination was fair. Section 14 then asks, among other things, whether less restrictive means were available.

For a property practitioner there is a third layer. The Code of Conduct under the Property Practitioners Act 22 of 2019, gazetted in January 2022, makes it sanctionable conduct to differentiate between or exclude consumers, directly or indirectly, on listed grounds. "Indirectly" is the operative word, and acting on a landlord's instruction is no answer — the practitioner is the one in front of the PPRA.

A credit check is lawful because the applicant agreed to it

This is the part most agencies have backwards. Under the National Credit Act 34 of 2005, a registered credit bureau may release consumer credit information to a person who requires it for a prescribed or contemplated purpose, and those purposes — set out in the regulations — were written around credit, fraud, insurance, tracing and employment in positions of trust involving cash. Screening a residential tenant is not plainly among them.

What makes the rental credit check work is the applicant's own explicit consent, which is also a lawful basis for processing under section 11 of POPIA. That has practical consequences. The consent must be specific rather than buried in a clause authorising "any checks we deem necessary"; it must name what will be checked and by whom; and it must be recorded in a form you can produce months later. The Information Regulator's code of conduct for credit bureaus also requires a bureau to confirm the purpose of an enquiry before releasing a record.

Use a bureau registered with the National Credit Regulator, and keep the consent with the application. The enquiry is itself recorded against the applicant, which is reason enough not to run one speculatively.

Read the record for what it is, and for how long it lasts

A credit record is a window, not a verdict, and the window has defined edges. Regulation 17(1) of the National Credit Act regulations sets maximum retention periods for information held by a credit bureau: enquiries fall away after a year; an adverse classification of enforcement action after a year, or within 14 business days of the consumer settling; a civil court judgment after five years, or when it is rescinded; administration and sequestration orders after five years, or on rehabilitation.

That changes how you read a report. A judgment four years old is near the end of its life and tells you less than three recent adverse classifications. A disputed listing may also change: section 72(1)(c) gives any person the right to challenge the accuracy of information held about them, and the National Credit Regulator's guidance is that a challenge must be dealt with within 20 business days, the information removed if no credible evidence arrives in time. An applicant can obtain their own record free once every twelve months — the fastest way to settle an argument about a listing.

No statute sets a rent-to-income ratio or a minimum score. Whatever threshold you use is commercial policy, not a legal requirement — which is why it has to be written down and applied the same way to everyone.

Which decision does this document let me make?

POPIA's minimality condition in section 10 requires the information you collect to be adequate, relevant and not excessive for the purpose, and section 13 requires that purpose to be specific, explicitly defined and lawful. Run every item in your application pack past one question: which decision does this document let me make? Bank statements support affordability; an ID copy supports identity verification and the lease. A photograph, a marital status field or a question about children supports no decision you are entitled to make, and keeping the field because the form has always had it is what minimality prohibits.

Section 26 raises the bar further on special personal information — race or ethnic origin, religious or philosophical beliefs, health, sex life, biometric information and criminal behaviour — which may not be processed except in defined circumstances. A screening process that asks about criminal history or health is inside section 26 and needs a specific justification, not a tick box, and "the landlord asked us to check" is not one.

A score is not a decision

If your screening produces a number and the number decides, section 71 of POPIA is engaged: a data subject may not be subject to a decision with legal consequences, or which affects them substantially, based solely on automated processing intended to profile their creditworthiness, reliability or conduct. The exception in section 71(2) covers a decision connected to concluding a contract where appropriate measures protect the applicant's legitimate interests, and section 71(3) says what those measures must do — allow representations, and give enough information about the underlying logic to make them meaningful.

In practice that is not onerous: a human signs off declines, the decline names the criterion not met, and the applicant can respond. What section 71 rules out is a rejection nobody reviewed and nobody can explain.

Write the criteria down before you see the applicants

Almost everything above collapses into one piece of administration. Set your screening criteria in writing, in advance — affordability threshold, required documents, how adverse credit information is weighed, what disqualifies outright — and apply them in the order applications arrive. Record every decline against the criterion it failed.

This is what answers a complaint. Because section 13 of PEPUDA puts the burden on you once a prima facie case is made out, an agency with dated criteria, a consent record and a one-line reason per decline is in a different position to one reconstructing its thinking from memory.

It also exposes the pile nobody manages: for every tenancy you placed, you screened several applicants you did not, and their documents are still in the shared drive. Our guide on POPIA for letting agents covers the retention side in detail.

Where this needs an attorney

Four situations warrant an opinion rather than a process: a declined applicant who alleges discrimination or refers a matter to the Equality Court or a Rental Housing Tribunal; any screening step touching criminal history or health, which is section 26 territory; a landlord instruction you believe would be unlawful to carry out, since the practitioner carries the sanctionable conduct; and an access or deletion request you think you may refuse.