Avoiding Fair Housing Complaints / Litigation While Selecting Tenants

The government has legislated both federal and state anti-discrimination laws that put a check on landlords, and limit what they can say or do, while selecting tenants for their rental properties. When choosing tenants ensure you adhere to the best practices explained below.

1. Always, check income, credit history, including work, landlord, and personal references. These days running a credit check requires only a minimal fee. As well, it is important to check on tenant references by phoning them, especially, previous and present landlords. And, it is always a good idea to verify an applicant’s employment, income, including bank account information. You should always be consistent in your screening process, including making it a policy, to always ask every applicant for his / her credit report, and not just singling out single parents or people belonging to a specific nationality or ethnic group.
2. All decisions should be made, based on business reasons. Every landlord is legally free to choose from among prospective tenants, so long as their decisions are based on legitimate business criteria, and not personal reasons. Applicants with bad credit histories, insufficient income to pay the rent, or unruly past behaviour, such as, being consistently late in paying their rent, or holding loud and noisy parties, or causing costly property damage, can be safely rejected since all things combined make them a bad risk. And, it goes without saying that a landlord can legally refuse to rent to an applicant, who is unable to come up with the security deposit, or meet any other condition of the tenancy.
3. Acquire a through understanding of fair housing rules. Fair housing laws clearly specify the reasons that can be considered illegal, when refusing to rent to a tenant. Forty-two US Code 3601, 3619, 3631 of the Federal Fair Housing Acts, make it clear that it is prohibited to discriminate on grounds of race, religion, national origin, gender, age, family status, physical or mental disability (including recovering alcoholics and people with past drug addiction histories). There are certain states and cities that also make it illegal to discriminate on the basis of marital status or sexual orientation.
4. If, you are the owner of large rental properties like apartment complexes, then you must make it a point to train your staff to understand the Fair Housing rules, as well. All property owners, landlords, managers and real estate agents, including their employees, while dealing with prospective tenants must adhere to fair housing laws during the selection process. Property owners are and should be held legally responsible for their employees’ discriminatory statements or conduct, including sexual harassment.
5. Consistency is the key. Being consistent is of paramount importance and absolutely crucial when dealing with prospective tenants. If all tenants are not treated more or less equally i.e. tougher standards are set and used randomly, while renting to members of a racial minority. This way, you are not only violating federal laws, but opening yourself up to lawsuits. Lowering the security deposit amount for some people, but not for others, opens you to the risk of being slapped with charges of discrimination from other tenants.