In 2016 there were 28,181 reported complaints of housing discrimination and of those complaints, 91.5% of them occurred during rental transactions (National Fair Housing Alliance). While there are legitimate reasons not to accept someone as a tenant, as a landlord you do not want to find yourself in a discrimination lawsuit. It is crucial when you choose not to accept a tenant that there is a viable and legal reason to reject them. There are only a handful of legal reasonsto reject a prospective tenant and they are as follows:
· Credit history
· History of non-payment
· Prior bankruptcies
· Some types of criminal convictions
One way to protect yourself from a potential discrimination lawsuit is to have a qualification criteria list. This means writing out a list of what you expect from an applicant and what will qualify them for your unit; you should hand this out to all applicants with the application. It is important to note that it is illegal to refuse to rentto a tenant because of national origin, race or color, religion, disability, sex, or familial status. Thus, when setting the qualifying standards, it is crucial that you do not accidently discriminate against any of these categories. For instance, Power Property Managementsuggests if you set an occupancy standard, you should follow the “2+1 Rule” because being too limiting could be misconstrued as a discrimination against familial status.
Another area to be cautious of as a landlord is criminal history. The Qualification Criteriaset by fair housing law states that criminal history can be considered and used to determine whether an applicant will be accepted or denied, but only based on:
· The nature of the offense/charge
· Whether the final disposition resulted in a guilty verdict or plea
· The amount of elapsed time from the date of final disposition
This means you have to be extremely careful when an applicant has a criminal record. It is suggested that convictions older than 7 yearsnot be taken into consideration and used as a reason to reject an applicant. When rejecting an applicant based on research from a criminal history check it is important that your decision is made in order to protect the safety of the residents and property, and not a policy against all people with felonies on their record.
On the other hand, there are justifiable reasons to automatically reject an applicant without violating fair housing or creating cause for a discrimination lawsuit. An example of this is found in residency requirements. If an applicant has any evictions on his or her record with just cause, they can be automatically denied without any case for discrimination.
As long as a landlord or property manager fairly sets a qualification criteria list, you should have no problem when it comes to discrimination lawsuits. It is important that you carefully follow the rules set forth by fair housing and if you do, along with having a written criteria list, there is no need to worry about facing a discrimination lawsuit.
This blog contains general information only and is based on online research. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This blog is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, her affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication.