Finding the right tenant can be time-consuming, stressful, and difficult.
Every landlord has heard horror stories about tenants who can't or won't pay rent, damage the property, or make unrealistic demands.
It's critical to screen carefully to weed out the worst applicants, but landlords must be careful in how they screen potential tenants.
With numerous federal, state, and local laws on housing discrimination, there are many ways in which you can end up on the wrong end of a lawsuit.
With some careful planning, you can screen applicants successfully and safely to get the best tenants into your property.
It requires some work upfront, but planning now will save you time and money over the course of the lease.
Learn the law
Tenants are exposed to many federal, state, and municipal laws.
While these can be intimidating, they're important tools for making sure all citizens get the housing they need.
Federal laws protect renters in the following categories:
- Race or color
- National origin
- Family status
States and cities often have their own additional protections.
In New York City age, occupation, sexual orientation, and source of income are protected.
If your potential tenant has a source of income that will cover the rent and is legally acquired, you can't turn them away on those grounds.
This also means applicants who rely on Social Security, pensions, or public assistance are protected.
Familiarize yourself with federal laws and the laws that apply in your state and city.
These protections don't indicate you must rent to applicants in those categories.
As a landlord, you have discretion with whom you sign a lease, and you have the ability to protect your property with careful screening.
These protections just ensure that you don't use that discretion against applicants as a form of discrimination.
Disqualify an applicant for the right reasons.
The best way to ensure that you aren't discriminatory in your screening process is to be consistent with all applicants. You should ask the same questions, require the same information, and follow the same credit and background check procedures for all applicants.
You may have a gut feeling that someone is the perfect applicant and want to skip the credit check, but you should continue to run those checks on all applicants.
Don't invite a lawsuit into your process.
Solicit information strategically
Plan your screening process, and stick with it to the end.
Write out a list of questions that you will ask every applicant, avoiding anything related to the protected classes.
Steer clear of family status questions such as asking about plans for children, as these are easy places to make a mistake and imply discriminatory intent.
Decide how you formally screen the applicants.
Will you run a credit check and a background check?
Explain the process clearly to all applicants, and run it consistently with all who apply.
Keep yourself informed
If you know the law, you are much more likely to avoid a major legal headache.
Use these resources for additional tips:
- "Guidance Regarding Advertisements": This memorandum from the Department of Housing and Urban Development clarifies aspects of fair housing policy.
- "Housing Discrimination Prohibited by Federal Laws": This resource explains the protected classes and includes examples of discrimination to avoid.
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