The Fair Housing Act
You are required to comply with The Fair Housing Act (FHA) if you rent private housing, housing that receives Federal financial assistance or State/Local government housing. Essentially, if you rent any property whatsoever, you must follow the laws established under the FHA.The FHA prohibits discriminating on the basis of race, color, religion, sex, national origin, and family status. It also prohibits discrimination on the basis of disability. Under this section, owners of rental properties are required “to make reasonable exceptions in their policies and operations to afford people with disabilities equal housing opportunities.”
Who is considered disabled?
The Americans with Disabilities Act (ADA) defines an individual with a disability to be
“a person who has a physical or mental impairment that substantially limits one or more major life activities, a person who has a history or record of such an impairment, or a person who is perceived by others as having such an impairment.”
Pretty broad definition! And, the ADA does not specifically name all the impairments that are covered (it’s probably a very long list).
So, if you’re a landlord, you are required to make “reasonable exceptions” to ensure disabled folks are not discriminated against. For example, even with a “no pets” policy, you may be required to make an exception to accommodate a service or companion animal. While a dog wearing a special red “service animal” vest or a wheelchair-pulling canine are pretty obvious, other companion animals are not so easy to spot.
You might think a deaf tenant would always be allowed to keep a dog to help out when the doorbell or phone rings, or the fire alarm is activated. Actually, a court decided that a dog owned by two deaf women had never been trained to assist them in any way, and therefore was nothing more than a “house pet”—and the landlord won its case.
[Bronk v. Ineichen, 54 F.3d 425 (7th Cir.1995)]
In another case, a dog with no training as a service animal was found to be therapeutic solely because of his “innate qualities.” The tenants were allowed to keep him. In still another case, a mentally disabled tenant was not allowed to keep two birds and two cats “for companionship.”
[Auburn Woods Homeowners Ass'n v. Fair Employment and Housing Commission, 121 Cal.App.4 1578, 18 Cal.Rptr.3d 669] [Janush v. Charities Housing Development Corp., 169 F.Supp.2d 1133 (N.D. Cal, 2000).]
What’s a Landlord to Do?
The law protects both physically and mentally disabled individuals. Don’t assume a person is not disabled based on appearance.
Not all trained service animals wear special vests or harnesses. Don’t assume a prospective tenant’s animal is not a service animal based on appearance.
Highly trained service animals, as well as companion animals who might not be specially trained, are not considered “pets.” Therefore, a “no-pet” policy would not apply.
Emotional support animals provide just that service—emotional support—to their owners.
It is reasonable to ask for proof of disability and need for a service/companion animal from a tenant’s physician or other health care provider in cases where the disability and/or need is not obvious.
It is reasonable to require all animals living on your property to be properly vaccinated and to follow any and all rules regarding leashing, waste disposal, etc.
While you cannot discriminate under the FHA, you are perfectly within your rights to screen all prospective tenants’ background and credit history.
Because court rulings on this topic are as varied as the genetic makeup of a pound puppy, it seems there are no hard and fast rules to follow. Consider the following general guidelines, and remember: this is not legal advice! Every jurisdiction is subject to individual case law, so always seek the advice of your attorney for specific questions on your local laws, as well as FHA and ADA.
Sources: Americans with Disabilities Act, Fair Housing Act, Fair Housing Institute
Next post: Verifying Tenant Income
If you’re a typical rental property owner, you’ve invested a great deal of money and sweat equity in your property: the initial purchase price, interest and taxes, ongoing repairs and improvements, plus dozens of incidental costs associated with owning any property. Protect your investment with a sound inspection policy and schedule.
The law requires that you properly maintain your property to meet all applicable health and safety codes (check your state and local laws and statutes for specifics). While it is certainly in your best interest to comply with the law and keep your property in top condition, it benefits your tenants, too. The good feelings that come with living in a safe, well-maintained home are valuable assets, and go a long way toward retaining high quality tenants.
Poorly maintained properties lead to higher tenant turnover, operating losses and even potential legal problems and expenses. Why take the risk?
Consider presenting new tenants with a Property Inspection Schedule, along with the lease, when they move in—or make it part of their Welcome Package. Either way, expectations are established right up front. Well-informed tenants could be more likely to keep small issues from becoming major hassles and repairs, too—saving you money in the long run.
What should the schedule include?
A checklist of items that will be inspected, for example: electrical, heating, and plumbing systems, smoke detectors, water heater, door and window locks;
A target date for each quarterly or semi-annual inspection, with a notice that you will contact tenants two weeks prior to arrange a convenient time;
Areas to detail any observed damages or needed repairs to systems, walls, ceilings, floors, roof, and landscaping;
Your contact numbers;
Date, time, and signature lines—to be signed by you and everyone listed on the lease.
Take photos of any damaged areas for your records. Let your tenants know when you will return to the property to make repairs—and what they can do to prevent the problem in the future.
Remember to keep a positive attitude throughout the inspection—the purpose is to keep everyone in compliance and safe. It is within your rights, however, to hold the tenant financially responsible for damages caused by negligence or misuse of your property.
Find landlord resources, including everything you need to know about tenant screening, from E-Renter.com.
Next post: Companion Animals and the Americans with Disabilities Act (ADA)
You’ve worked hard to prepare and market your rental property, and now you’ve found a great new, pre qualifed tenant. If you think the hard work is behind you, guess again! Now it’s your job as property manager to retain your good tenant—after all, you want to minimize tenant turnover.
Consider providing a Welcome Package that answers your tenant’s questions and clarifies everyone’s expectations. It’s a small, but significant, step toward building a good landlord-tenant relationship.
Include an overview of rules and policies, but don’t restate the entire lease. A simple list for referral purposes is enough. Include when and where to pay rent, how to access the building, where to park, and any other pertinent information. This can be accomplished with an FAQ (Frequently Asked Questions) list.
Be sure to provide practical safety information, such as an evacuation route, fire extinguisher locations, and emergency water shut-offs. A floor plan clearly indicating these items would be perfect.
A phone number list is essential for new renters. Include your own regular and emergency contact numbers, as well as those of your preferred maintenance service, plumber, and electrician. If a crisis situation occurs, your tenants should be able to get the help they need, even if they cannot reach you. Make sure your tenants know how to reach all of the property’s utility providers, too.
A guide to nearby restaurants, grocery stores, dry cleaners, and coffee shops would be most appreciated by a tenant who is new to your town. Tell them where the best pizza can be found, so they’re prepared to order dinner on move-in day. Visit your Chamber of Commerce or local Visitor’s Center for brochures and area guidebooks.
If you’re really dedicated to establishing a great relationship, the Welcome Package might include a few move-in necessities to help your new tenants transition to their new home. Think about the items most needed when moving—like bottled water, paper towels, soap, a roll of t.p. for the bathroom, and even a gift certificate to a local pizzeria. You’ll demonstrate you are going above and beyond to improve the landlord/tenant relationship!
Find landlord resources, including everything you need to know about tenant screening, from E-Renter.com.
Next post: Establishing A Property Inspection Schedule
The perfect tenant might not exist, but there are plenty of good, even ideal tenants out there. You know them—they’re clean, quiet, and pay their rent on time, every time. How do you sift through the prospects and make sure you’re renting to the one of the good ones? It’s simple: take the time to pre-qualify tenants.
Five reasons why you should pre-qualify tenants:
Today’s economic environment: Don’t rent without knowing a potential tenant’s credit history. The current economy makes this essential.
Avoid nightmares: Even the well-employed can be nightmare tenants. A good income never guarantees good behavior, so check personal and rental references of each tenant applicant.
Screen out the criminals: Check each applicant’s source of income. If a potential tenant’s income source is unclear or worse, not legitimate, you do not want them as a tenant on your property.
Mitigate your risk: Proper tenant screening can prevent a predator from becoming your tenant and your liability.
Reduce tenant turnover: Know what you’re dealing with going in, so you don’t have to watch tenants move out due to liens, overextended credit, or other legal issues.
Remember to be thorough when pre-qualifying—require written applications from each adult who will be leasing your property.
It’s easier than you think to ensure that you have the best possible tenant—before you sign the rental agreement. Decrease your headaches and your losses by pre-qualifying every potential applicant.
Find landlord resources, including everything you need to know about tenant screening from E-Renter.com.
Next post: A Welcome Package for New Tenants
Part 2 of 2: Cost-effective ways to advertise
There is a lot of movement in the rental market right now. Renters living in recently-foreclosed homes are being forced to move. Homeowners who cannot afford rising mortgage payments are becoming renters again.
Now is not the time to be passive in your advertising efforts. The good news is you don’t have to spend a ton of money. Once you’ve prepared your property, get the word out with these cost-effective advertising tips.
Advertising is good; free advertising is even better: If you haven’t tried Craigslist yet, don’t let another day go by without posting your property on the site. Craigslist is free, easy to use and immensely popular—three very good reasons to check it out!Other websites offer free listings, too—but these vary. Some require that you pay for each subsequent contact. Let your budget be your guide as you Google “Free For Rent Listings.” Wherever you list your rental, include photos! Take the time to shoot at least one exterior and several interior pictures of your property. Include the kitchen and bathrooms, closets, and any unique features that will attract your ideal tenant.
Double your efforts with some low-tech methods, too. Write up your listing, and print it out. Repeat your phone number all across the bottom of the page. Cut strips between the numbers so interested folks can tear one off. Many grocery stores, coffee shops, and community centers allow fliers on their bulletin boards, so visit a few around your rental property to see how others post their rentals. Why reinvent the wheel when you can copy a good idea?
Local community publications are another good option for free or low-cost advertising. You might hesitate to advertise a downtown high-rise condo in a farm community paper, but the idea is to get the word out and let others do your advertising for you. You don’t know where your next tenant will hear about your property, so why not try a scattershot approach?
Don’t Forget Signage. Easy to read signs or banners will send the message that your property is available. While hardware stores carry the standard “For Rent” signs, you might want to investigate the options at your local sign and banner store. To make your contact info easy to read, you may need a larger sign or banner—and since they last for years, signs are a one-time investment.
Host an Open House: They’re free, and can be a great way to gather potential tenants all in one afternoon. The key is to advertise well in advance: again, use Craigslist, fliers, and signage to get the word out. Enlist some help so visitors are all greeted and shown the property. Have a contact sheet ready at the door to gather names, phone numbers, and emails for each person so you can follow up after the open house.
Utilize the Best Form of Advertising: Word of Mouth! Ask your friends and family, your hair stylist or barber, your manicurist and the home and garden store guy if they know anyone looking for a rental property. You may be surprised at the response this easy form of networking can bring.
After all your money-saving efforts pay off and you have some great possibilities, take the next step to ensure you’re choosing the right tenant. Tenant screening is easy and fast. Proper tenant screening also gives you peace of mind—and it’s impossible to put a price tag on that!
Part 1 of 2: Prepare Before You Advertise
As we pointed out in our previous post, the newest study on rents and occupancy rates showed that both were down overall for 2008. No big surprise there! What wasn’t down in 2008 (besides unemployment figures)?
Today we’ll show that you don’t have to be down about marketing rental property in this tough economy. If you’re sitting on vacant rental properties and tightening cash flow, we’ve got some practical ideas that won’t break your budget.
4 Steps to take before you advertise your rental property:
1. Check it out: Look at your rental unit through the eyes of a potential tenant. Even better—ask a friend to come along and suggest some honest, critical observations. You may not see things like they do.
2. Spruce it up: It doesn’t take a ton of money to put things in tip top shape! Is your rental property super-tidy, inside and out? If not, get busy. Scrub the interior and powerwash the exterior, make sure the entry or porch is spotless, and put out a fresh, new welcome mat. First impressions are critically important.
3. Clear it out: A prospective tenant does not want to see beer cans and lost dog fliers in the yard—so remove any trash from the premises. Cut the grass and trim the shrubs, sweep out the carport and haul it all away.
4. Make it safe: Repair broken or sagging steps. Check railings for security. Trim overhanging branches and out-of-control shrubs near windows. Check the exterior lighting, and install additional if needed. Finally, check all door and window locks to be sure they work properly and easily. You’ll make your prospective tenant feel safe and reduce your risk.
Your rental property makes impressions every day. Ask yourself, What does the public see? You never know who will refer your new tenant, so make sure yours is an outstanding property, ready to become the perfect tenant’s new home!
Get the best new tenants by preparing your rental property. Then screen them properly. Find landlord resources, including everything you need to know about tenant screening from E-Renter.com.
Next post: Cost-Effective Ways to Advertise Your Rental Property
A just-released study confirms what property managers and landlords already know: rents are down, and so are occupancy rates.
The reporting agency, Realfacts, covered nearly 3.2 million rental units in 60 MSAs (Metropolitan Statistical Areas). The study indicates the highest average drop in rents occurred in Florida, California, and Arizona, where declines ranged from 1.6% to 2.4%.
Additionally, the national average rent dropped below $1,000 in December, 2008, to $993. And there’s more not-so-good news: occupancy dropped in 2008, ending up at 93% for year’s end. This translates into more than 10,000 vacant apartment units.
As expected, the number of units added in 2008’s shaky economy dropped. The study showed that while an average of 65,000 units were added annually over the past ten years, 2008’s increase was only 9,248—a huge decline, reflecting both the tightening of credit and the concerns of nervous investors, who could be waiting for rents to swing back up before taking on new development.
Flat or declining rents, coupled with an average 4% increase in expenses, would make any landlord anxious. The good news is that smart landlords and property managers can successfully ride out the downturn, poised to prosper when the economy starts growing again—as it inevitably will.
While it’s more important than ever to tighten up procedures and control cash flow, don’t overlook reducing your risk. Haste can certainly make waste if procedures are pushed aside in order to fill vacancies. Go slowly and be careful—and consider implementing new policies that can increase occupancy and reduce your risk.
5 Must-Dos for Every Landlord
- Plan: Plan for occupancy, not vacancy: As soon as a tenant vacates, be ready to move the next one in.
- Pre-Screen Tenants: Now is not the time to take on tenants who cannot handle the rent or have a negative renting history. Screen before you offer any rental agreement.
- Market your property: Present it and sell it as strongly as you can.
- Keep advertising: But investigate lower-cost advertising methods to save cash.
- Don’t keep it to yourself: tell friends, family, and co-workers about your property, even when it’s occupied. The more folks know, the more they can help you when it’s time to hang up the “For Rent” sign.
Next post: Marketing Your Rental Property in a Tough Economy