Before I get into what happened, please know that I recognize—and am embarrassed by—my naïveté/stupidity.
My SO and I bought a 2-unit in May. We live in the first floor unit and rent out the second floor. Our tenants had a month-by-month lease, and they've both recently given their notice. We're trying to fill the vacancy.
We posted an ad to Craigslist and talked to my best friend's father, who has been a landlord of several properties in the same town. He told us that in 25+ years of landlording, he's never run a credit or background check. He relies on meeting the potential tenants, calling references, and—in the past several years—reviewing social media sites. We decided to do the same, because it felt wrong to take $30-50 from every interested applicant. (Remember, I said I was dumb.)
We got a lot of interest in the apartment and set up showings for last Saturday. Had a few no-shows, a few disasters, and a few that seemed great. Out of those that seemed great, two of them found other apartments within a day or two of our showing.
That left us with only one option, so we quickly called their references, did some online research, and made the offer because we didn't want to lose them. It's a family—mom, dad, two kids.
The only previous landlord reference they had was the dad's mother. She (of course) gave a glowing review, though only after we "disconnected" (pretty sure she hung up on me to call her son and then called me back).
Like I said we didn't want to lose them, so last night we told them that they qualified for the apartment, and they accepted it this morning. That's it so far—they have not signed a lease.
Today, bored at work, I decided to go beyond my social media research and do a generic Google search. I found that the dad has a criminal record. About 7 arrests since 2005—mostly vehicle related in his early 20s (leaving the scene of an accident, no insurance, operating with a suspended license)—but in 2008 he was arrested for marijuana use and sale, and in 2007 he was arrested for criminal threatening. He's 34 or so now, and his last arrest was in 2014.
We've already verbally agreed to rent to them, and I don't know if I'm legally allowed to deny housing to someone with a criminal record.
Should I still rent to them? If not, how do I explain why we're withdrawing the offer?
Someone, please, help me make this better!
(No need to tell me what I should have done, cause sadly that boat has already passed.)