Tennessee Tenant Screening Laws: What Landlords Can and Cannot Do
Tennessee does not cap screening fees or deposits, but the URLTA requires deposits in a separate account and federal law governs who you approve. Here is how to screen legally in 2026.
Tenant screening in Tennessee is governed lightly by state statute and heavily by federal law. The Uniform Residential Landlord and Tenant Act (URLTA) sets the deposit rules, but it applies only in the larger counties, and it says little about how you evaluate an applicant – which makes the federal Fair Credit Reporting Act and fair housing law the real rulebook.
This guide covers what you may screen, what you can charge, and the URLTA deposit rules. If you are new to the mechanics, our overview of how to screen tenants step by step pairs well with the Tennessee-specific points below.
Video: a plain-language walkthrough of Tennessee tenant screening, application fees, deposits, and adverse action.
Key Takeaways: Tennessee Tenant Screening Laws
- No application-fee cap. Tennessee does not limit screening fees, but they must be reasonable and tied to the actual cost of the report.
- No deposit cap, but a separate account is required. Under the URLTA the deposit must sit in its own account and the tenant must be told where it is held.
- Return the deposit with a written itemized list after the tenancy ends and the tenant vacates. § 66-28-301 sets no return deadline; the sanction is § 66-28-301(c), which forfeits the right to retain any part of the deposit where the landlord neither kept it in a separate account nor gave the listing.
- The URLTA applies only in larger counties (population over seventy-five thousand); federal law applies everywhere.
What Tennessee Law Lets You Screen
Tennessee gives landlords broad authority to evaluate an applicant. With written permission you may obtain a consumer report covering credit, rental and payment history, employment and income, and public records such as criminal convictions and civil judgments, and you may decline applicants who fail your written standards.
Because Tennessee regulates so little of the process, consistency is the safeguard: write your criteria down and apply them identically to every applicant. Our guide to the minimum credit score for renting explains how to set a threshold that screens for risk without screening out a protected class.
Application Fees in Tennessee: No Cap
Tennessee sets no maximum on a tenant application or screening fee. The practical limits are reasonableness and consistency: tie the fee to the actual cost of the report and charge the same amount to every applicant.
Uneven fees, or fees collected without genuine screening, draw fair housing scrutiny even where no cap exists. Treat the fee as part of a documented, even-handed process.
The deposit account is the regulated part
Tennessee leaves the fee to you, but where the URLTA applies, the deposit must sit in a separate account and the tenant must be told where – and a landlord who skips that step can lose the right to keep any of the deposit.
Security Deposits Under the URLTA
Tennessee does not cap the security deposit, but in the counties where the URLTA applies it imposes a strict handling rule: the landlord must place all security deposits in an account used only for that purpose at a regulated bank, and must tell the prospective tenant where that account is.
After the tenancy ends and the tenant vacates, the landlord provides a written itemized listing of the damage charged against the deposit and returns the balance. Tennessee sets no statutory deadline for that return — the widely repeated thirty-day figure is not in Section 66-28-301. What the section does provide is that a landlord who fails to keep the deposit in a separate account and to provide the itemized listing forfeits the right to retain any portion of it (Section 66-28-301(c)), and that the landlord may keep the deposit if the tenant does not respond within sixty days of the landlord’s notice of a refund due (Section 66-28-301(f)). Our deeper look at Tennessee security deposit laws covers permitted deductions.
Tennessee Fair Housing and Protected Classes
The Tennessee Human Rights Act tracks the federal Fair Housing Act, prohibiting discrimination on the basis of race, color, religion, sex, national origin, familial status, and disability. Tennessee does not add source of income as a statewide protected class. Whether the statutory word “sex” also covers sexual orientation and gender identity is now an open federal question. HUD withdrew its February 9, 2021 memorandum applying Bostock v. Clayton County to the Fair Housing Act effective September 25, 2025 (Docket FR-6617-N-01, 91 Federal Register 44867, published July 17, 2026), and withdrew the February 11, 2021 memorandum implementing Executive Order 13988 effective September 17, 2025 (Docket FR-6571-N-01). The statutory text of the Act is unchanged and Bostock was a Title VII employment case, so the withdrawal removes the interpretation HUD had stated without settling the question the other way. No successor has been issued. Do not read the withdrawal as permission: the exposure moved from HUD’s enforcement desk to the courtroom, and many states and localities protect sexual orientation and gender identity expressly, which is the clearer and more durable footing where it exists — check your state and city.
That means a landlord is not required by state law to accept a housing voucher, though uniform treatment of every applicant remains the rule. For the federal baseline, see our Fair Housing Act guide for landlords.
Criminal History, Credit, and Eviction Records
A criminal record can be a lawful basis to decline in Tennessee, but a blanket no-record policy is the most common fair housing trap. Do not cite HUD’s 2016 criminal-records guidance for that point: it was withdrawn effective September 25, 2025 by the Federal Register Notice of the Withdrawal of OGC Guidance Documents, Docket No. FR-6617-N-01, 91 FR 44867, and HUD has issued nothing to replace it. What carries the point instead is the Fair Housing Act itself, the Supreme Court’s decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, 576 U.S. 519 (2015), and HUD’s discriminatory-effects rule at 24 CFR section 100.500, reinstated effective May 1, 2023 – so a flat ban can still violate the federal Fair Housing Act even without intent, because conviction records fall unevenly across racial groups. Read section 100.500 for what it is: a burden-shifting litigation standard under which the landlord carries the burden of proving the practice necessary to a substantial, legitimate, nondiscriminatory interest that no less discriminatory practice would serve. It imposes no individualized-assessment step, no pre-denial notice and no waiting period – that step came from the withdrawn guidance, which never carried the force of law in the first place. An individualized assessment tied to the offense, how recent it is, and safety is therefore the strongest defensible practice and the evidence that defends the denial, not a federal command. Section 100.500 is also contested: HUD has proposed to remove it and reopened the comment period until October 9, 2026 (Docket No. FR-6540-P-01, 91 FR 1475, as supplemented by Docket No. FR-6540-P-02, 91 FR 51416). A proposal is not a rule, and nothing has changed yet.
Credit history and prior evictions are cleaner when your standard is objective and consistently applied. You can read how eviction filings arise on our Tennessee eviction notice laws page. Decide your criteria in advance and apply them the same way every time.
The FCRA: Consent and Adverse Action
When you pull a screening report through a consumer reporting agency, the federal Fair Credit Reporting Act governs the transaction – and in Tennessee, where state law is largely silent on screening, this is the rule that matters most. You need a permissible purpose and written authorization before ordering the report, and you must send an adverse action notice if the report drives a denial, a higher deposit, or a co-signer demand.
The notice must name the reporting agency, state that it did not make the decision, and explain the applicant’s right to a free copy and to dispute it. Our FCRA compliance guide and the companion walkthrough of the adverse action notice spell out the requirements.
Fair Housing Compliance for Tennessee Landlords
The Tennessee Human Rights Act and the federal Act demand the same discipline: uniform criteria, uniform application, and documentation showing you treated every applicant by the same yardstick. In a state that regulates the process this lightly, the paper trail is your protection.
Publish your criteria before you advertise, screen every applicant against the identical standard, and keep the file. Consistency is far more persuasive than an after-the-fact explanation.
A Compliant Tennessee Screening Process
Turn the rules into one repeatable sequence. First, publish objective criteria. Second, collect a reasonable, uniform screening fee. Third, get written consent and order the report. Fourth, evaluate every applicant against the identical standard. Fifth, if you decline based on a report, send the adverse action notice promptly – and where the URLTA applies, place the deposit in a separate account and disclose its location.
Income verification is the step landlords most often shortcut; our guide to verifying tenant income shows how to confirm ability to pay without singling anyone out. Run the same steps for every applicant and your file will tell a clean, consistent story.
Common Mistakes That Create Liability
In a permissive state the recurring errors cluster around the deposit account and consistency. Commingling the deposit instead of using a separate account, failing to disclose where it is held, or failing to provide the written itemized listing of damages can cost a landlord the right to keep any of it — that is the express sanction in Tennessee Code Section 66-28-301(c), and note that it turns on the account and the listing, not on any deadline. Tennessee sets no statutory deposit-return deadline. Charging uneven fees and denying an applicant on a report without the FCRA notice round out the list.
One standard, every applicant. Tennessee hands you the freedom to design your own process – which means the burden of proving it was even-handed sits with you. A single written rubric, used the same way each time, is your strongest defense.
Documentation and Recordkeeping in Tennessee
Because Tennessee regulates the screening process so lightly, your records are what prove it was lawful and even-handed. Keep the signed authorization for each consumer report, a dated copy of the written criteria you applied, the screening results, and every adverse action notice. A complete file showing identical treatment across applicants is the strongest answer to a Human Rights Commission complaint.
Where the URLTA applies, the deposit recordkeeping carries real weight. Keep proof that the deposit sits in a separate account, the written disclosure telling the tenant where it is held, the itemized listing of damages and proof of when it was delivered, dated move-in and move-out records, and repair invoices. The separate-account rule is enforced by the loss of the deposit, so the records matter.
Set one retention policy and apply it to every file, approved or denied. A consistent multi-year record of authorizations, criteria, screening results, adverse action notices, account disclosures, and deposit accountings gives you the evidence to answer a discrimination inquiry or a deposit dispute. Keeping the same records for everyone is itself proof of the even-handed treatment the Tennessee and federal fair housing acts require.
Do
- ✓Publish your written screening criteria before you advertise, and apply them to every applicant.
- ✓Get written authorization before pulling any report, and keep the signed consent on file.
- ✓Send an FCRA adverse action notice on every denial that rests on a consumer report.
- ✓Assess any criminal record case by case, weighing the offense, how recent it is, and safety.
- ✓Handle the security deposit and its return exactly as the state statute requires, and document it.
Avoid
- ✕Charge uneven application fees, or collect a fee with no genuine screening behind it.
- ✕Treat a permissive state as a lawless one – the FCRA and federal fair housing law always apply.
- ✕Apply a blanket ban on any criminal record, which risks a disparate-impact violation.
- ✕Improvise your standards applicant by applicant instead of following one written rubric.
- ✕Skip the deposit paperwork the statute requires, from itemization to any required notices.
Tennessee Tenant Screening Laws: FAQ
Can a Tennessee landlord run a background check on an applicant?
Yes. With written authorization you may obtain a consumer report covering credit, rental history, income, and criminal convictions. The federal Fair Credit Reporting Act requires a permissible purpose and consent before any screening report is pulled.
Is there a limit on application fees in Tennessee?
No. Tennessee does not cap tenant application or screening fees. Keep the fee reasonable, tie it to the actual cost of screening, and charge it consistently to every applicant.
What is the maximum security deposit in Tennessee?
Tennessee does not cap the security deposit. Where the URLTA applies, the landlord must hold it in an account used only for that purpose, disclose where it is held, and provide a written itemized listing of the damage charged against it. Tennessee Code Section 66-28-301 sets no deadline for returning the deposit; the sixty-day window in Section 66-28-301(f) runs in the landlord’s favour once notice of a refund due has been sent.
Does Tennessee require the deposit in a separate account?
Yes, in the counties where the URLTA applies. The deposit must sit in an account used only for that purpose, and the tenant must be told where. Failing to do so can cost the landlord the right to keep any of it.
Is source of income a protected class in Tennessee?
No. The Tennessee Human Rights Act does not list source of income, so state law does not require a landlord to accept a housing voucher. Treat every applicant by the same standard regardless.
Can a Tennessee landlord deny an applicant for a criminal record?
A conviction can be a lawful reason to decline, but a blanket ban is the risky part. Do not rely on HUD’s 2016 criminal-records guidance for that warning: it was withdrawn effective September 25, 2025 (Docket No. FR-6617-N-01, 91 FR 44867) and HUD has issued nothing to replace it. The exposure now runs through the Fair Housing Act and HUD’s discriminatory-effects rule at 24 CFR section 100.500, reinstated effective May 1, 2023, under which a landlord defending a flat no-record policy carries the burden of proving it necessary to a substantial, legitimate, nondiscriminatory interest that no less discriminatory practice would serve. Section 100.500 is a burden-shifting litigation standard and imposes no individualized-assessment step, no pre-denial notice and no waiting period – that idea came from the withdrawn guidance, which never carried the force of law in the first place. An individualized assessment tied to the offense, how recent it is, and safety is therefore prudent risk management and the evidence that defends the decision, not compliance with a federal requirement. HUD has proposed to remove section 100.500 and reopened the comment period until October 9, 2026 (Docket No. FR-6540-P-01, 91 FR 1475, as supplemented by Docket No. FR-6540-P-02, 91 FR 51416); a proposal is not a rule and the regulation is in force today.
Does a Tennessee landlord have to send an adverse action notice?
Yes. If a denial, a higher deposit, or a co-signer requirement rests in any part on a consumer report, the FCRA requires an adverse action notice naming the reporting agency and explaining the right to a free report and to dispute it.
Does the URLTA apply everywhere in Tennessee?
No. The Uniform Residential Landlord and Tenant Act applies only in counties with a population over seventy-five thousand. Federal screening and fair housing rules apply statewide regardless.
How long should a Tennessee landlord keep tenant screening records?
Keep applications, signed authorizations, screening results, adverse action notices, and deposit accountings for every applicant – approved or denied – for several years. In Tennessee, a consistent retention policy is the evidence that you treated every applicant by the same standard if a fair housing or deposit dispute later arises.
When must a Tennessee landlord send the adverse action notice?
Send it promptly whenever a consumer report contributes to an adverse decision – a denial, a higher deposit, or a co-signer requirement. The FCRA notice must name the reporting agency, state that it did not make the decision, and tell the Tennessee applicant how to get a free copy of the report and dispute any error.
Related Tennessee and Screening Guides
- Tenant screening laws by state – compare Tennessee to the rest of the country.
- Tennessee security deposit laws – deductions, itemization, and the return deadline.
- Tennessee eviction notice laws – notice periods and the eviction timeline.
- Tennessee rent increase laws – notice rules for raising the rent.
- Tennessee late fee laws – what you can charge for late rent.
- How a tenant background check works – what a report includes.
- Tennessee habitability laws – your maintenance obligations as a landlord.
Screen Tennessee Applicants the Compliant Way
Order FCRA-ready credit, criminal, and eviction reports and keep your Tennessee process consistent from application to decision.
Published by Tenant Screening Background Check · Editorial Team
Established 2004. Our editorial team has spent two decades helping landlords and property managers run lawful, FCRA-compliant tenant screening across all 50 states. We translate state landlord-tenant codes and federal screening rules into processes you can actually follow.
Legal Disclaimer
This article is for general informational purposes only and is not legal advice. Tennessee and federal laws change, and how they apply depends on your specific facts. Before acting on any screening, fee, deposit, or fair housing question, consult a licensed attorney in Tennessee. Reading this page does not create an attorney-client relationship.
