As a landlord or property manager, you already know how important the tenant screening process is when choosing the right tenants. The goal is to find responsible tenants who won’t cause problems or fail to pay their rent, right? In order to protect both yourself and your rental property, it’s important to gain a clear understanding of what information you can and cannot legally use as a basis for tenant selection.
Fair Housing Act
- National Origin or Ethnic Background
- Familial Status (i.e. tenants with children)
- Mental or Physical Disability
In addition, if you receive HUD funding or financing insured by the FHA, you may be subject to HUD program regulations prohibiting the use of a tenant’s marital status, sexual orientation or gender identity as a basis for tenant selection.
Housing Discrimination Examples
To prevent a rental applicant from filing a housing discrimination complaint against you, it’s important to avoid taking actions or making statements that could be interpreted as a civil rights violation. Even if you don’t intend to discriminate against any protected class of people, actions like these could be interpreted as discriminatory:
- Falsely telling a prospective tenant that a rental property is not available
- Holding some applicants to stricter standards than others (e.g. higher credit score or income requirements)
- Inconsistent enforcement of rules from one tenant to another (e.g. responding to noise complaints or late rental payments differently among tenants in the same building)
- Failing to accommodate a disabled applicant with a service animal in a pet-free rental
- Asking questions that allude to an applicant’s marital status or familial status, even if you only intend to make small talk
While you obviously know it’s illegal to advertise a rental property in a way that excludes a protected class or set guidelines that are overtly discriminatory, you also need to think about how your actions could be misinterpreted by prospective tenants. For example, while building a rapport with an applicant, you might innocently ask him how often he visits with his kids. Even though this question seems benign in certain situations, in a rental scenario, it could be seen as you “fishing” for information if the applicant believes you don’t want to rent to tenants with children.
Acceptable Information Used for Tenant Screening
In order to weed out high-risk applicants, there is plenty of information you can legally use as your basis for tenant selection. Information about an applicant’s income, credit history and employment status is used every day by landlords during the screening process. These factors directly relate to the tenant’s ability to pay rent.
References and rental history are also perfectly acceptable factors for tenant screening because they help determine whether or not the applicant is a high risk for property damage or other tenancy problems based on past behavior.
It’s always wise to choose tenants based solely on their ability to fulfill their end of the rental lease. However, in some states it is still legal for landlords to refuse to rent to applicants based on other non-business related criteria, as long as it doesn’t violate anti-discrimination laws for protected classes listed in the Fair Housing Act (as noted above). If you’re in a state that doesn’t protect applicants from arbitrary discrimination, you may have the right to turn them down for reasons such as smoking, too many tattoos or body piercings. That is, unless the tattoos or body piercings are associated with the applicant’s religious beliefs or national origin.
Selecting the right tenants is often the biggest challenge that landlords and property managers face. As long as you keep personal feelings out of the decision-making process, you won’t risk violating housing discrimination laws.