Your browser (Internet Explorer 6) is out of date. It has known security flaws and may not display all features of this and other websites. Learn how to update your browser.

Using Rental Criteria to Avoid Violating Fair Housing Law

happy tenantsHere is a really great article recently published in “The Landlord Times,” a monthly publication circulated to more than 6000 Utah apartment owners, property managers, and other members of the Utah Apartment Association.  I am re-publishing it here, with permission, because it discusses Federal Fair Housing Law in an interesting and understandable way.  Each and every landlord should read it:

“[It’s always] a good time to brush up on ways to avoid discrimination claims. One of the best ways to avoid discrimination claims is to have a list of the criteria you use when evaluating a tenant. It is better to have objective criteria and use those than to compare people to each other or use you “gut instinct” to evaluate if someone is qualified to rent from you.

It is natural for owners to want to compare prospects against each other. But BEWARE! Because of Federal Fair Housing Laws this can get you in trouble. Here is an example: 

A landlord puts a sign put in front of her duplex for rent. At 9:00 am Marie shows up with two children, looks at the property and decides she wants it. While she fills out the application her children run around the yard and are loud. At 10:00 a nice looking young man, Derek, shows up. He tells the landlord he is starting law school at the local university, is actively involved in his church, and that he wants to stay in the place the entire three years he is in school.

The landlord decides Derek is the tenant for her and puts Marie’s application and deposit in and envelope and immediately mails it off without checking any references. If Marie were to make a fair housing complaint, would she win?

Unless the landlord can prove that Marie was not qualified, the landlord will likely lose this case and incur the $10,000 fine. Marie can also sue the landlord civilly for damages. By not even checking Marie’s references to see if she qualified under a landlord’s rental criteria, the landlord discriminated against her. Derek may turn out to be a better tenant, or he may not. It is best to check individual tenants out against our own standards and not each other. The only way to prove someone is not qualified is to compare them to a pre-created standard provided to all applicants.

Rental Criteria Tips

Some of the most common criteria include:

  • Income. To rent your place, how much income do you want someone to earn? Industry standard is that people should spend somewhere around a third of their income on rent. So the way to express this could be “Applicant must provide proof of income equal to or more than three times the rent amount.”
  • Pets. Do you allow them? If so what type and do you charge higher deposits, fees or monthly rent. REMEMBER, you cannot charge pet rent, fees or deposits for service and companion animals.
  • Amount of your application fee that will cover the cost of doing the background check.
  • Amount of deposit required in advance.
  • What type of identification you require to make sure they are who they say they are and aren’t using a stolen identity
  • What type of rental history you require and what would disqualify them (such as eviction, owing other landlords money, etc.).
  • Credit history. Determine and list what type of credit would disqualify them and what type you are willing to accept.
  • Criminal History. A common statement is something like “you will disqualified if you have committed any type of crime that had it been committed on the property would be considered a serious threat to the rental property, other residents or neighbors. Some landlords like to see a certain number of years since convictions for certain crimes, or are unwilling to rent to individuals on parole or probation. Remember –criminal history is not a protected class. Take risks only if you are comfortable. You are not ever required to rent to anyone with any criminal history.
  • Maximum Occupancy. Under Federal Law, you shouldn’t restrict occupancy to less than 2 per bedroom. You can however say “we allow up to 2 people in a one-bedroom, four people in a two-bedroom”.

 If you create a list like this you will find your risk of a fair housing complaint decreases dramatically and that it is easier to judge applicants using written standards.”

Leave a comment  




Submit comment