Posted by Teresa on July 2, 2010 under Landlord and Tenant FAQs | 
Margaret is a landlord who’s trying to do her best to make all of her tenants happy—in hopes that they’ll renew their leases and save her the time and effort of finding new tenants. But she’s discovering that keeping one group of tenants happy could be putting her in legal hot water.
Here’s what happened: Margaret owns a four-plex rental property, with a shared carport, individual patios, and a common back yard. There are no fences or dividers, and each tenant uses the back yard as they please. Two of her tenants have children, and two do not. All are on one-year leases.
The basic lease that all four tenants signed stipulates that children are allowed to play in the front and back yard areas of the building, and on sidewalks that lead up to the unit they live in. They are not to play in the carport.
Stacy is one of the tenants without children. She complained to Margaret that her neighbors’ kids were playing too close to her patio, and too loudly. She threatened to move at the end of her lease, which was coming up in 60 days. Stacy is an ideal tenant—never late with her rent, respecting Margaret’s time and appreciative of her efforts to keep the rental unit well-maintained. She rarely complained about anything.
Margaret wanted to appease Stacy. Besides, she agreed with her that it was unfair for the neighbors’ kids to play near her patio, disturbing Stacy’s peace and quiet. So Margaret sent letters to the two tenants with children, informing them that effective immediately, the children’s play area would be limited to their own front sidewalks and patios.
The result? The parents responded negatively, and threatened legal action against Margaret. And they had a legitimate point—their leases, clearly stipulating where the children could play, were still in place. Additionally, the lease only mentioned quiet hours from 10:00 p.m. to 7:00 a.m. So, Stacy’s noise complaint had no basis.
All of Margaret’s tenants signed the same lease. If Stacy had an issue with the rules about where kids could play, she should have dealt with it before she signed the lease. And if Margaret wants to change the rules for her long-term lease tenants, she can only do so at lease renewal time.
Landlords are also obligated to comply with the Fair Housing Act, which forbids discrimination against tenants due to familial status. So her rule about where children can and cannot play should apply to all tenants, not just children—just to be safe.
Posted by Teresa on April 2, 2010 under Landlord Paperwork and Forms, Landlord Tenant Lawsuits, Tenant Screening & Background Checks |
Our last post contained a warning to landlords that what you say can come back to haunt you. In other every day activities, like accepting or rejecting new tenants, landlords must also take care to know and follow all applicable laws—because it protects you and your business from liability.
Take discrimination. The Fair Housing Act is very clear on what constitutes discrimination: denying housing to an applicant based on race, gender, family status, country of origin, religion, age, sexual orientation, or disability. Still, depending on how a rejection is handled, there is always a chance that a discrimination claim could be filed by a rejected tenant.
How can landlords avoid such claims? First, make absolutely sure that you have a rock-solid reason for the rejection—and back it up with paperwork. Second, communicate the reason to the applicant. Don’t just say, “I found a better tenant,” or “I rejected your application.” The tenant could make up his own reasons for the rejection, including his race or religion.
Establish your minimum standards for approving tenant applications, and apply them to every single applicant. Treating everyone equally is a cornerstone of good landlord practices. Accept the first qualified applicant for a rental unit, after applying your standards to each interested party.
Full disclosure to all applicants up front is a good idea. Your lease application should convey your standards, as in the following examples:
- That each adult who will live in the rental unit must fill out an application and be approved.
- That a minimum income level is required to rent the unit.
- Employment history will be checked, and a minimum of six months at the applicant’s employer is required.
- That previous rental history will be taken into consideration, including timely rent payments, keeping property in good condition, and fulfillment of previous leases.
- That a tenant credit check and criminal background screening will be conducted on all applicants.
If you have additional requirements, add them to the list. And of course, your application should state that you do not deny the right to rent or lease property based on race, gender, family status, country of origin, religion, age, sexual orientation, or disability.
With this information up front, applicants will know what basis they can be rejected on. When you do reject a tenant applicant, be sure to explain your reasons in writing, and supply a copy of the credit report, as required by law.
Posted by Teresa on March 30, 2010 under General |
A real estate brokerage in Las Vegas, one of its agents, and the owners of a rental home were all recently sued in federal court for discrimination. Here’s what allegedly happened:
Back in 2008, a woman tried to rent a home the realty company listed. She says she was rejected because she told the agent she had applied to adopt three children, adding to the three she already had living with her. If true, this is a clear violation of the Fair Housing Act.
She alleges the agent replied that they were “hoping to rent to someone without children,” or something to that effect. The home was eventually rented to a family with one child.
What did the agent do wrong? Plenty: It is illegal to make rental housing unavailable or deny rental housing because of family status, under the Fair Housing Act. His statement, if true, violates the FHA.
The real estate company denies the allegations, and says there is no evidence to support them. Their side of the story is that the prospective tenant refused to pay the asking rent.
While there are always people who look for a lawsuit around every corner, and every suit has two sides, there is no doubt that being sued is no fun. It can cost landlords plenty of time and money. Even if you’re completely innocent, proving that is a big hassle. And what about the bad publicity? Innocent, defendants can suffer negative reactions for months or years to come.
The best way to avoid this type of lawsuit is to watch everything you say to prospective tenants. Don’t ask about their personal situation. Keep every conversation and interaction 100% professional. If they ask if the neighborhood is safe, have them look up local crime statistics online. If they ask if you like kids, tell them what you think about kids doesn’t matter, and that your job is to make sure the rental units are rented fairly no matter what the applicant’s family situation.
Base decisions to accept or reject each tenant applicant on the same factors: proper income level, verified employment and income, acceptable credit history check, passing criminal background screening, and any other verification you require.
Don’t judge any books by their covers—the scariest-looking people sometimes make the most peaceful, easiest tenants. And Mr. and Mrs. Clean could be hiding some scary secrets behind their appearance. In the landlord business—you just never know.
Posted by Teresa on January 25, 2010 under Fair Housing Act, Landlord Tenant Lawsuits, Tenant Screening & Background Checks |
Question 1 is about pet policies. Let’s say a landlord has five rental units. The tenants in four of them are neat and clean. The fifth tenants are not. They leave trash around their unit, and during inspections the landlord wonders if they ever clean the place. If a “neat and clean” tenant wants to adopt a dog, and a tenant number five also want to adopt a dog, is it discriminatory to approve Mr. Clean’s request and turn down the other tenant?
Pet policies have nothing to do with the Fair Housing Act. The only tenants who are protected regarding pets are those who fall under the protection of the Americans with Disabilities Act (ADA). A service animal must be allowed, regardless of your pet policies. All other pets are completely at your discretion.
Question 2 is regarding appearance. A landlord has two applicants for the same apartment. The first arrives in a clean, well-maintained late-model car. She is nicely dressed, and wears expensive-looking jewelry. The second arrives on a bicycle, wearing baggy jeans, a baseball hat turned backwards, and a torn t-shirt. Is it discriminatory to decline the second prospective tenant’s application without going any further?
Yes. Landlords may not discriminate on the basis of appearance. Smart landlords are “blind” to it, using solid tenant background screening as the decision maker. In this case, the first applicant could be way overextended on her credit, have a bankruptcy in her credit history, and owe her previous landlord a few months’ rent. The second could have bicycled straight from work, where he is well-respected, earns a good salary, and has solid credit. Appearances can be deceiving.
Question 3 is regarding advertising. Landlord Jane wants to pre-screen tenants by describing her expectations in the “for rent” ads she places in the paper. Her ad reads as follows: “1BR 1BA apartment, clean building, safe neighborhood near church. No pets, no kids, no smokers, no drinkers, no bums. Background and credit checks. Ref req’d.” Is Jane’s ad discriminatory?
Could be. Describing the rental unit as “near church” could be interpreted to mean she desires tenants of that church’s denomination. “No kids” can be problematic. You cannot discriminate against people with children, although a one-bedroom apartment could be considered too small for more than one person. Parents or a parent and infant in most states are allowed to rent a one-bedroom apartment. Check your local and state laws. Landlords can enforce a “no smoking” rule, and rules regarding alcohol consumption in common areas, but not a general “no drinking” or “no bums” rule. Jane’s definition of a “bum” is most probably discriminatory.
Remember, landlords must be very familiar with the Fair Housing Act, which bars discrimination against persons based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians), pregnant women, and people securing custody of children under the age of 18), and handicap (disability). Treating all of your tenants fairly and consistently is a smart way to avoid charges of discrimination.
Question 1 is about pet policies. Let’s say a landlord has five rental units. The tenants in four of them are neat and clean. The fifth tenants are not. They leave trash around their unit, and during inspections the landlord wonders if they ever clean the place. If both a “neat and clean” tenant and tenant number five want to adopt a dog, is it discriminatory to approve Mr. Clean’s request and turn down the other tenant?
Discrimination is defined by the Fair Housing Act (FHA). Pet policies have nothing to do with the FHA. The only tenants who are protected regarding pets are those who fall under the protection of the Americans with Disabilities Act (ADA). A service animal must be allowed, regardless of your pet policies. All other pets are completely at your discretion.
Question 2 is regarding appearance. A landlord has two applicants for the same apartment. The first arrives in a clean, well-maintained late-model car. She is nicely dressed, and wears expensive-looking jewelry. The second arrives on a bicycle, wearing baggy jeans, a baseball hat turned backwards, and a torn t-shirt. Is it discriminatory to decline the second prospective tenant’s application without going any further?
Yes. Landlords may not discriminate on the basis of appearance. Smart landlords are blind to appearance, using solid tenant background screening as the decision maker. In this case, the first applicant could be way overextended on her credit, have a bankruptcy in her credit history, and owe her previous landlord a few months’ rent. The second could have bicycled straight from work, where he is well-respected, earns a good salary, and has solid credit. Appearances can be deceiving.
Question 3 is regarding advertising. Landlord Jane wants to pre-screen tenants by describing her expectations in the “for rent” ads she places in the paper. Her ad reads as follows: “1BR 1BA apartment, clean building, safe neighborhood near church. No pets, no kids, no smokers, no drinkers, no bums. Background and credit checks. Ref req’d.” Is Jane’s ad discriminatory?
Could be. Describing the rental unit as “near church” could be interpreted to mean she desires tenants of that church’s denomination. “No kids” can be problematic. You cannot discriminate against people with children, although a one-bedroom apartment could be considered too small for more than one person. Parents or a parent and infant in most states are allowed to share a one-bedroom dwelling. Check your local and state laws. Landlords can prohibit smoking in rental units and alcohol consumption in common areas, but not a general “no drinking” or “no bums” rule. Jane’s definition of a “bum” is most probably discriminatory.
Remember, landlords must be very familiar with the Fair Housing Act, which bars discrimination against persons based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians), pregnant women, and people securing custody of children under the age of 18), and handicap (disability). Treating all of your tenants fairly and consistently is a smart way to avoid charges of discrimination.
Posted by Teresa on August 21, 2009 under Fair Housing Act, Landlord Tips, Tenant Screening & Background Checks |
The Fair Housing Act, also known as Title VIII of the Civil Rights Act of 1968, prohibits landlords from discriminating against applicants on the basis of race, color, national origin, religion, sex, family status and disability. Various Executive Orders cover more details, such as requiring federal agencies to promote and further fair housing in the programs and prohibiting discrimination in the sale or leasing of properties owned by the federal government or provided with federal funds.
The FHA covers most housing in this country, but there are certain exemptions in some circumstances. If you need to know if your circumstances qualify for an exemption, check with your attorney.
Specifically prohibited actions based on the definition of the FHA in leasing situations include:
- Refusing to rent housing
- Making housing unavailable
- Setting different terms, conditions, or privileges for rental of a dwelling
- Providing different housing services or facilities
- Falsely denying that housing is available for inspection or rental
It is also illegal to threaten, coerce, intimidate or interfere with anyone exercising or assisting others to exercise their rights under the FHA, and to advertise or make a statement that indicates any limitation to housing or preferential treatment in offering housing based on race, color, national origin, religion, sex, family status, or disability.
In addition, the Fair Housing Act prohibits landlords from discriminating against tenants with physical and mental disabilities, and requires them to allow reasonable modifications to the dwelling unit to accommodate their disability. This can be done at the tenant’s expense, and, where reasonable, you may require that they return the unit back to its original condition when they move out. For example, allowing a disabled tenant special parking when requested is required.
Landlords are also required to make reasonable accommodations for disabled tenants who require service animals. Even if you have a “no pets” policy, you must allow service animals, which are not considered pets.
However, the FHA does not require that landlords make housing available to persons who are direct threats to the health and safety of others or who use illegal drugs.
Remember, you are within your rights when
screening tenants prior to leasing. For more landlord resources, including forms and information on
tenant screening, turn to
E-Renter.com. You’ll know that you have the best possible tenants when you
prescreen tenants.
Posted by Teresa on June 18, 2009 under Fair Housing Act, Screening and Background Checks, Tenant Credit Checks, Tenant Screening & Background Checks |
What are your risks when considering applicants for your rental property? Even in these tough times, you cannot approve every applicant. It’s important to know your parameters when you must reject a potential tenant.
The federal Fair Housing Act prohibits discriminating against tenants on the basis of race, religion, sex, disability, or national origin. Some states have laws making it illegal to discriminate based on sexual orientation or marital status.
Of course there are legitimate reasons to turn down an applicant. Just be sure to document your process thoroughly and to be fair and consistent with each applicant—so you are well prepared if you’re ever accused of discrimination.
Here are some legitimate reasons to turn down a rental applicant:
Income level: It is legal to use a prospective tenant’s income as a basis to approve or reject their application. Be sure to check the income of all tenants on the application to avoid any potential problems.
Bad Credit History: Prior bankruptcies or low credit score are objective criteria for rejecting tenants.
Exceeding Occupancy: You do not have to rent to a family of six applying to rent your one-bedroom apartment.
Inadequate Rental History: You may require a reasonable number of positive rental references, and reject an applicant based on a negative reference from a previous landlord.
Past Eviction: If an applicant has ever been evicted, you may reject the application. However, if he or she won an eviction lawsuit brought by a previous landlord, you cannot hold the lawsuit against them.
Criminal Record: If an applicant has been convicted of a crime, it is probably enough reason to reject their application. Take care, however, to make a distinction between an arrest and a conviction.
Pets: If you do not allow pets in your rental unit, you may reject a pet-owning applicant. However, be aware of how the Americans with Disabilities Act (ADA) views therapy pets. You may have to make an exception to your no-pet rule to accommodate a disabled tenant.
As always, staying consistent with procedures is extremely important—especially when considering whom to approve or reject as tenants. Keep your paperwork in tip-top shape, and follow the same process with each applicant. Favoring any person or type of person over another is a lawsuit waiting to happen.
Your best practice is to run credit and background checks on each applicant. Screening tenants is quick, easy, and inexpensive—and it could potentially save you thousands in legal fees. Use the facts—just the facts—to determine whether or not you approve an applicant.
Margaret is a landlord who’s trying to do her best to make all of her tenants happy—in hopes that they’ll renew their leases and save her the time and effort of finding new tenants. But she’s discovering that keeping one group of tenants happy could be putting her in legal hot water.