To have successful Homestead rental properties, you must have proper tenant screening. However, it’s not that easy. Federal or local landlord laws have a big impact on your screening process. These laws are in place in order to reduce potential discrimination against tenants. This is why you should aim for your tenant screening to not just be thorough, but also to not be categorized as discrimination. Steer clear of discrimination and you will also keep expensive lawsuits away. Not only that, but you also ensure that your processes are fair and compliant with all relevant laws.
When it comes to federal laws about discrimination, all property owners must understand the federal Fair Housing Act (FHA). This set of laws affects all points of tenant-landlord interaction. The FHA does not allow refusal to rent a property based on a tenant’s race, religion, family status, or disability. The FHA also forbids landlords from deceiving a tenant by saying a rental house is unavailable when it is or to ask for more requirements from certain tenants. This also includes asking for a higher security deposit from some tenants or evicting them for something you would otherwise allow from a different tenant.
A clear set of guidelines for every interaction you have with potential or current tenants is very important. You must apply these on the very first conversation you have with those inquiring about your rental property. During that conversation, you should be able to inform them of the approval criteria and expectations.
But you must not ask questions that could force your tenant into disclosing protected information. Do not ask questions pertaining to heredity, race, or national origin during tenant screening, as these are considered inappropriate. Do not ask about their disability or familial status as well. Avoid including questions like these in your application documents. And don’t bring them up in conversation either unless the tenant initiates it.
It is vital that you study your screening process to see if there are other potential forms of discrimination. For example, landlords should accept applications and screen tenants on a first-come, first-served basis. Once an application has been received, a landlord must always process it immediately and not wait for someone else to apply. That would also be discrimination. If an applicant has paid the required fees and their application documents are complete, you should continue with the screening process for that applicant. Disqualifying an applicant based on pre-determined criteria, such as their credit score or poor references, is perfectly fine. On the other hand, it is not right to make an applicant wait for your answer while you hope for somebody else to qualify.
Finally, all property owners should have a very good understanding of the laws that deal with renting to people with a criminal record. The FHA leaves property owners with a surprising amount of leeway when disqualifying a tenant based on their criminal record. Consequently, you must be mindful that not all criminal offenses are considered sufficient reason to turn down an applicant. There are instances where local laws differ from federal, so it is important to really understand what they are so you can tweak your tenant screening process.
Familiarize yourself with the laws in your area so you can ensure that your tenant screening process isn’t discriminating against any specific applicant. In doing so, you keep at bay any legal problems arising from discrimination lawsuits.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.