An important part of owning successful Hoover rental properties is tenant screening. But it’s not that easy. There are a number of ways your screening process could go against federal or local landlord laws. These laws have been put in place to reduce potential discrimination against tenants right from the first conversation. This is the reason why you should have a tenant screening process that is thorough but does not cross the line into discrimination. It is important to be fair and in compliance with the relevant laws. Avoiding discrimination will also mean avoiding expensive lawsuits.
When it comes to federal laws about discrimination, it is very important that property owners understand the federal Fair Housing Act (FHA). This set of laws affects all points of tenant-landlord interaction. The FHA prohibits property owners from refusing to rent a property based on a tenant’s race, religion, family status, or disability. In addition, the FHA prohibits landlords from telling a tenant a rental house is unavailable when it actually is, or to require other tenants to meet stricter criteria. Accordingly, a landlord must not require a higher security deposit from certain tenants or evict a tenant for any reason that would not cause you to remove a different one.
As a property owner, you should have a clear set of guidelines for every interaction you have with your potential or current tenants. This must start with the initial conversation you have with applicants for your rental property. In that conversation, you should already inform them of the approval criteria and expectations.
However, you shouldn’t ask questions that might force your tenant to disclose 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. Unless the tenant brings up the issue, it would be best to avoid it in conversation. More importantly, these questions should not appear on your application documents.
Likewise, it is helpful to really go over your screening process to check for other potential forms of discrimination. For example, landlords should accept applications and screen tenants on a first-come, first-served basis. Sitting on an application because you are waiting for another person to apply is one example of 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, you must have a full understanding of the laws in your area that cover 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. Local laws sometimes differ from federal laws, so it is critical that you understand what they are so you can then adjust your tenant screening process.
As long as you know the laws in your area, 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.