Indiana Tenant Screening Laws: The Landlord and Applicant Guide

Indiana tenant screening is governed almost entirely by federal law layered over a deliberately light state framework. The federal Fair Credit Reporting Act controls how a consumer report may be pulled and used, the federal Fair Housing Act and the Indiana Fair Housing Act govern discrimination, and Indiana Code section 32-31-1-20 does something unusual: it forbids Indiana cities and counties from adding their own screening rules. The Indiana landlords who screen properly almost never face a lawsuit. The ones who skip the consent form or the adverse action notice pay for that shortcut, and the mandatory attorney-fee provisions are what make the bill so large.

This guide walks the whole framework in plain English: the five federal Fair Credit Reporting Act requirements every landlord must meet, why Indiana sets no statewide application-screening-fee cap, the statewide preemption that voids local screening and source-of-income ordinances, why an Indiana landlord may refuse a Housing Choice Voucher, the Indiana Fair Housing Act and its ancestry protection, HUD’s individualized-assessment standard for criminal history, Indiana’s Second Chance expungement rule, the rights every applicant holds, a day-by-day screening workflow, a compliance playbook, real scenarios, and an Indiana-specific set of frequently asked questions.

Because Indiana adds so little on top of the federal baseline, the safest posture for a landlord is written consent, consistent written criteria, and proper adverse action notices every single time, and the strongest position for an applicant is to know exactly which rights federal law confers. Treat every figure here as a starting point and verify the current statute before you screen, charge a fee, or dispute a decision.

The Fair Credit Reporting Act, codified at fifteen U.S.C. section 1681, is the federal statute that governs tenant screening nationwide, and an Indiana landlord must comply with it in full because Indiana adds no competing state screening statute of its own. Getting the federal layer right prevents almost all screening-related liability. Five federal requirements sit at the core, and each one is load-bearing.

Permissible Purpose

A landlord has a permissible purpose under Fair Credit Reporting Act section 604(a) to pull a consumer report on a rental applicant. That is the threshold right to obtain the report at all, but it does not eliminate any of the other requirements — it only opens the door to a report the landlord must then handle correctly.

Written Consent

The applicant must provide written authorization before the landlord obtains a consumer report. The consent must be clear and conspicuous, and the best practice is a standalone consent form rather than a clause buried in the rental application. Indiana adds no separate state consent statute, so the federal standard is the whole rule — but it applies to every Indiana rental without exception.

Consistent Criteria

Written screening criteria must be applied consistently to every applicant. Inconsistency creates both Fair Credit Reporting Act disparate-treatment exposure and Fair Housing Act liability, because bending the rule for one applicant and not another is powerful evidence of discrimination even where none was intended.

Pre-Adverse Action Notice

Before finalizing a rejection based even in part on a report, the landlord must send a pre-adverse action notice that includes a copy of the report and the Fair Credit Reporting Act summary of rights, and then wait a reasonable period — commonly at least five business days — so the applicant can dispute an error before the decision becomes final.

Adverse Action Notice

When the rejection becomes final, the landlord must send an adverse action notice identifying the consumer reporting agency, explaining the applicant’s dispute rights, and including the summary of rights. This step is not optional, and it applies to any adverse action — not only an outright denial, but also a higher deposit or an added condition driven by the report.

Is there a cap on rental application or screening fees in Indiana?

No. Unlike states such as California, Indiana puts no statutory ceiling on what a landlord may charge to screen an applicant, and there is no Indiana statute that limits the amount, requires an itemized receipt, or mandates a refund of any unused portion. Application fees in Indiana are generally treated as non-refundable. In practice, Indiana landlords commonly charge somewhere in the range of thirty to fifty dollars, roughly the cost of the underlying report, but that figure is market custom, not a legal cap. The federal Fair Credit Reporting Act is the real constraint: the fee should be tied to a legitimate screening purpose, disclosed before it is collected, and never charged for a report the landlord never pulls.

Any older guide that cites an Indiana “screening-fee statute” — or a specific dollar cap, a receipt rule, or a repair-and-deduct figure — is simply wrong; those rules belong to other states and do not exist in Indiana law. Because Indiana Code section 32-31-1-20 also preempts local units from regulating the screening process, an Indiana city or county cannot fill the gap with a local fee cap either. The result is broad landlord latitude on the fee, checked only by federal law, market competition, and the general duty not to use a fee as a tool of discrimination.

Can an Indiana city pass its own tenant-screening or source-of-income ordinance?

No, and this is one of the most important and least-understood features of Indiana law. Indiana Code section 32-31-1-20 prohibits a local unit — a city, county, or township — from regulating the screening process a landlord uses to approve tenants, from regulating rental rates, and from regulating the broader landlord-tenant relationship, unless the state legislature has expressly authorized it. Any local ordinance that violates this preemption is void and unenforceable. A companion provision, the 2015 House Enrolled Act 1300, separately bars local governments from requiring a landlord to participate in the Housing Choice Voucher (Section 8) program.

The practical effect is the mirror image of a state like California. Where California cities have enacted local Fair Chance housing ordinances and source-of-income protections that a landlord must track address by address, Indiana centralizes the rules at the state level and strips its cities of the power to add screening obligations. For an Indiana landlord that means one framework — the federal Fair Credit Reporting Act and Fair Housing Act plus the Indiana Fair Housing Act — applies statewide, and there is generally no local ban-the-box, fee cap, or voucher mandate layered on top. It also means an applicant who hoped a city ordinance would protect a voucher or limit a criminal-history question usually will not find one in Indiana.

Can an Indiana landlord refuse a Housing Choice Voucher (Section 8) holder?

Yes. Indiana has no statewide source-of-income protection, so a landlord is free to decline to accept a Housing Choice Voucher, often called Section 8, and participation in the program is voluntary. This is the direct opposite of states like California, where source of income is a protected class and a no-voucher policy is unlawful. Indiana not only declines to protect source of income — it affirmatively removes the option from its cities: the 2015 House Enrolled Act 1300 bars local governments from requiring landlords to participate in Section 8, and Indiana Code section 32-31-1-20 preempts any local source-of-income ordinance.

The one limit is that a landlord may not use a voucher as a pretext for discrimination on a class that Indiana or federal law does protect. Refusing every applicant with a voucher is lawful in Indiana; refusing a voucher holder because of race, disability, familial status, national origin, or ancestry, and pointing to the voucher as cover, is not. A landlord who accepts vouchers, meanwhile, must still apply the standard federal Fair Credit Reporting Act and fair-housing rules and should measure income against the tenant’s own share of the rent.

The Fair Housing Act prohibits discrimination in housing based on seven federally protected classes, and the Indiana Fair Housing Act, codified at Indiana Code section 22-9.5, mirrors the federal list and adds one more. Screening criteria must be facially neutral, predictive of tenancy success, and consistently applied, and they must not produce a disparate impact on any protected class — a criterion that looks neutral but disproportionately excludes a protected group can still be unlawful.

Federal Protected Classes

The Fair Housing Act protects race and color, national origin, religion, sex including gender identity and sexual orientation under current HUD guidance, familial status meaning the presence of children, and disability whether mental or physical. Unlike some states, Indiana does not add source of income to this list, so a voucher itself is not a protected characteristic in Indiana.

Indiana’s Added Protection: Ancestry

The Indiana Fair Housing Act adds ancestry — a person’s family lineage, ethnic background, or heritage — as a protected class beyond the seven federal categories, and it is enforced by the Indiana Civil Rights Commission. Indiana’s Second Chance law, discussed below, separately shields expunged criminal records from use. And while the state does not protect veteran or military status statewide, some Indiana municipalities protect additional categories through local human-relations ordinances that operate within the narrow space state law leaves them.

Common Indiana Fair-Housing Traps

• Blanket criminal-history bans that auto-reject any record, which can violate the disparate-impact doctrine.
• Rigid credit-score cutoffs applied with no individualized review of the applicant’s full picture.
• Income multipliers that disproportionately exclude single parents, implicating familial status.
• Occupancy limits stricter than reasonable, which can implicate familial status even though Indiana Code section 32-31-8-7 lets a landlord apply a reasonable occupancy standard.
• Using an expunged record, which is unlawful under Indiana’s Second Chance law.
• Inconsistent application of criteria across applicants of different protected classes.

HUD’s 2016 guidance established that blanket criminal-record bans can violate the Fair Housing Act as disparate-impact discrimination. Indiana has no ban-the-box or Fair Chance housing law and no statewide limit on considering criminal history, so a landlord has broad discretion, but the federal Fair Housing Act still applies, and Indiana’s Second Chance law adds a hard state limit on expunged records. The consideration of any record must be individualized — not a blanket rule that automatically rejects any applicant with any record.

The Five Assessment Factors

• Nature and severity of the offense. A decades-old shoplifting conviction differs materially from a recent violent crime or manufacturing charge.
• Time since the conviction. More recent offenses carry more predictive weight; very old convictions may have little probative value.
• Evidence of rehabilitation. Consistent employment, completed parole or probation, continuing education, or recovery documentation can rebut the presumption of risk.
• Relevance to tenancy. The offense should bear on the specific risk — violent or property crimes bear more directly than a traffic or minor drug-possession offense might.
• Consistent application. Apply the same analysis to every applicant with any criminal history; selectivity creates disparate-treatment exposure.

Can an Indiana landlord screen on an expunged record?

No. Indiana’s Second Chance law, at Indiana Code section 35-38-9-10, makes it unlawful to discriminate against a person because of an expunged or sealed conviction, and it directs that a person whose record is expunged be treated as if the offense had never occurred. Expunged records are removed from the public court databases a background check draws on, so a compliant screening report should not show them. A landlord may not deny an applicant, charge more, or impose different terms because of an expunged record — and asking about it, then acting on the answer, is itself a violation. This protection is distinctive to Indiana and is missing from almost every generic screening guide.

A tenant screening report typically pulls credit, a nationwide eviction-history search, criminal records, and identity and income verification. Two Indiana-specific points shape what a landlord may see and use.

Eviction records are public in Indiana

Indiana does not mask eviction (unlawful-detainer) court records the way some states do — there is no Indiana equivalent of California’s record-masking rule. Eviction filings and small-claims judgments are generally public record and searchable through the Indiana court system, so a screening report can surface both filings and judgments. A careful landlord still distinguishes a mere filing that was dismissed or that the tenant won from an actual money judgment, because a filing alone is a weak predictor and treating it as a proven adverse event invites a disparate-impact problem.

Lookback windows and occupancy

Under the Fair Credit Reporting Act, most negative items have a seven-year reporting window and bankruptcies a ten-year window; Indiana adds no shorter statewide period, though its expungement law can erase qualifying convictions entirely. On household size, Indiana Code section 32-31-8-7 expressly lets a landlord apply a reasonable occupancy standard, which is a defense against a familial-status claim — but the standard must be genuinely reasonable, not a pretext to screen out families with children.

Indiana applicants rely primarily on the federal Fair Credit Reporting Act, because Indiana adds no separate state screening statute. Understanding these rights matters for applicants who want to contest an inaccurate report and for landlords who want to avoid liability. Applicants can learn to spot problems early using our guide to red flags in a rental application, which cuts both ways.

The Five Core Rights

• Right to consent disclosure. The landlord must disclose that a consumer report will be obtained and get written consent before pulling it; the applicant may decline and withdraw.
• Right to an adverse action notice. If the report causes any adverse action — rejection, a higher deposit, or added requirements — the applicant is owed a notice identifying the consumer reporting agency and explaining dispute rights.
• Right to a free copy of the report. When an adverse action is taken, the applicant may obtain a free copy of the report from the agency, generally within sixty days.
• Right to dispute inaccuracies. The applicant may dispute inaccurate information with the agency, which must investigate, generally within thirty days, and correct or remove anything it cannot substantiate.
• Right to sue for violations. The Fair Credit Reporting Act authorizes private lawsuits for willful or negligent violations, with actual, statutory, and punitive damages and mandatory attorney fees.

A disciplined, day-by-day workflow is what turns the legal requirements into a repeatable process that consistently produces defensible decisions. The exact timing can flex, but the sequence — disclose, consent, report, decide, notice — should not. A fuller walkthrough of each stage lives in our how to screen a tenant step-by-step guide, and the underlying paperwork is covered in our rental application guide for landlords.

The rules become concrete when applied to real situations. Each of the following turns on the same handful of principles — written consent, the adverse action notice, consistent criteria, the absence of source-of-income protection, and individualized criminal review that excludes expunged records. A deeper treatment of the criminal-history piece is in our guide to criminal history in tenant screening.

Indiana landlords who follow this playbook virtually never face a Fair Credit Reporting Act or fair-housing claim. The list is short, but every item is load-bearing. Build it into your standard operating procedure and the liability largely disappears.

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