Understanding Fair Housing Law: Screening Tenants
The most basic understanding you should have of the Fair Housing Law as a landlord is this:
You cannot discriminate against potential and existing tenants on the basis of age, gender, sexuality, ethnicity, race, religion, familial status, or disability.
That sounds simple but as you begin to apply it to your properties, you’ll find it can quickly become complicated. In our series on Fair Housing Law, we’ll look at different elements that you need to be aware of as a landlord.
When you rent property, it’s important that you screen your tenants so that you get the highest quality renters you can in a way that doesn’t violate Fair Housing laws. This means that your decisions must be based on their qualifications as a potential tenant and not on who they are as a person.
Advertising Your Rental
The first step in screening tenants in a legal and appropriate way is to make sure you don’t appear to discriminate when you market your rental. You shouldn’t say or do anything that appears to disallow specific groups. Calling a community a “Christian community” may make non-Christians believe they aren’t welcome. Even “perfect for a family” can be problematic because it may appear as if people without families shouldn’t apply. One exception to this rule is if your rental is located in a 55+ community which has specific rules for residents.
As you begin to receive calls and emails about a property, never lie about whether a property is available or not. You may think you’re doing the right thing because you’ve already received a few qualified applications, but you’re setting yourself up for trouble. You may have a good reason not to want more applications but it could come back to haunt you. Accusations of discrimination could be made even if that wasn’t your intent.
Reviewing Tenant Applications
When you begin reviewing tenant applications, there are several things you can do to keep yourself on the right side of the Fair Housing law.
● Require the same type of information from all applicants.
● Never make the requirements more restrictive for one person over another, no matter what your reasons.
● Create a screening and rental policy that you follow with everyone. Put it in writing and save it in your records in case you ever have to show what your policy is to prove you didn’t discriminate.
● Keep your terms of renting and the lease agreement the same for everyone. Don’t modify the language in your lease for anyone.
● Be consistent in your dealings with all tenant applicants. Share the same information. Ask the same questions.
● Watch your small talk. You might think you’re being friendly, but the question about whether they have children or what church they attend could back to haunt you if you decide not to rent to them.
How to Screen Tenants
Since you can’t use information about your sense of a person, how they make you feel, or what your intuition says about them (and no, you really can’t and shouldn’t) to choose a tenant, what can you use? You need to use hard, objective data that actually indicates whether they can pay the rent.
1. Credit scores
2. Income level
3. Rental history
5. Criminal background
These are basic facts that can give you a good idea about whether this person can afford the rent you’re asking and whether they’ll pay it on time. Your intuition isn’t a good indicator, no matter how right your gut usually is. In fact, not screening tenants based on this kind of information is the easiest way to end up in court.
All of your decisions should be business decisions. It’s not about how you feel about applicants, it’s what their information says about them that matters. Once you collect this information, keep copies of the records so that if anyone ever accuses you of discrimination, you can show an attorney or judge exactly how you made your decision.
Are you stressing out about Fair Housing laws? You don’t have to. The easiest solution is to work with a property management team that understands the laws inside and out and already has a legal process for screening tenants. Contact us at ERA American Real Estate. We can help you rent your property and stay on the right side of the law.