Landlords, property managers, and real estate investors want tenants that will make managing the property more straightforward, not harder. To do so, they have to allow only the best tenants, starting with the tenant screening and leasing practices process. Landlords can screen tenants and deny them leases, but it must be legal. Otherwise, they face legal repercussions that can ruin their reputation and properties. Most landlords are governed by Federal Housing Association (FHA) rules. The laws ensure housing applicants and tenants get fair consideration for leases. The following are four tips landlords and property managers can use to ensure their tenant screening and leasing practices are legal:
Learn Tenant Screening And Leasing Laws
First and foremost, you need to learn tenant screening and leasing laws. Some landlords have explicit biases and will exhibit discriminatory behavior even when they know it is illegal. On the other hand, many landlords have gotten in trouble because they were ignorant about tenant screening and leasing laws. If you do not know the laws, your tenant screening and leasing practices could not possibly be legal.
Therefore, as a landlord, you should take the time to learn about the tenant screening and leasing laws that affect you. The Federal Housing Act will be the most important document to read regarding your education on the laws. However, to ensure that all your tenant screening and leasing practices are legal, it would be best to learn state and municipal tenant-screening laws too.
Ways in which landlords commonly break tenant screening and leasing laws include
- Having different standards for different applicants
- Discriminatory language on the tenant application form
- Asking the race of an applicant
- Asking applicants what their first language is
- Finding out about an applicant’s sexual orientation
The more you learn about the tenant screening and leasing laws regarding your property, the better the chance you have of having a legal screening and leasing process that will not lead to lawsuits by tenants.
Criminal discrimination is an element of tenant screening and leasing practices that affects many landlords negatively. There are seven protected classes under the Fair Housing Act (FHA). They include:
- National Origin/Ethnic Background
- Familial Status
- Mental/Physical Disability
Therefore, those with a criminal history are not considered a protected class under the law. Many landlords have taken that to mean they can deny people with a criminal record housing at their discretion. Suppose a landlord enacts a policy that uniformly denies access to anyone with a criminal history. In that case, it will primarily affect black and Hispanic people who fall into the race-protected class under the FHA.
For that reason, The United States Department of Housing and Urban Development (HUD) has several guidelines on the treatment of people with criminal records as it pertains to tenant screening and housing. Landlords need to know if and when their tenant screening and leasing practices are discriminatory towards applicants with criminal records.
HUD will consider various factors to determine whether your tenant screening and leasing practices are unfair to those with a criminal history. These factors include:
- If the property manager’s criminal history policy applies to every applicant.
- If the criminal history policy protects other tenants and the property from harm.
- How specific is the criminal history policy?
- If the landlord has made any exceptions to applicants with a criminal history.
Ensure Your Rental Policies Promote Fair Tenant Screening
As a landlord, if you want your tenant screening and leasing practices to be legal, you should ensure that your property’s rental policies promote the fair judgment of applicants. In other words, create a tenant screening and leasing process which promotes compliance with the Federal Housing Act and HUD guidelines. Therefore, you do not have to refer to the laws every time there is an issue during the screening process. Even if you deny an application, you can be sure that the denial will be legally compliant.
It would be best to consult an attorney when creating your rental policies. Hiring a lawyer ensures that you get an expert opinion on housing laws. You have a better chance of having an iron-clad rental agreement when you have a lawyer craft it.
You should also learn the laws as the landlord and refer to them when drafting the policies. EZlandlordforms.com makes it easy for landlords because they have a state-specific lawyer-written rental agreement just for them. Moreover, it is best to have a written policy for tenant screening instead of having a flexible process where the landlord makes personal judgments on rental applications.
Choose Property Managers Wisely
You may be the property owner or landlord and make the big bucks, but the property managers ultimately enforce the rules. Therefore, if you want the legality of your rental policies to be upheld and residence applicants not to challenge it, you should choose your prosperity managers wisely. The actions of unscrupulous property managers have undone many properties.
Unlike tenants, you will have fewer candidates for property managers, so you should take more time and research when selecting one. Find out their history of property management, especially if there have been any legal issues with their rental policies enforcement. A track record is the most vital element when evaluating property managers.
Property managers are where the tenant screening and leasing practices are executed. It matters little how well your rental policies are crafted if they are not used.
There are many issues property owners and landlords should consider if they want their tenant screening and leasing practices to be legal. The four tips above will help you significantly ensure your practices are legal. The price for ensuring they remain legal is eternal vigilance.