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Home · Property Management · Landlord Quick Tips : Do’s and Don’ts for Non-Discriminatory Tenant Screening
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In October, a Massachusetts landlord who refused to rent apartments to pregnant women or families with minor children was found guilty of violating the U.S. Fair Housing Act. The same month, the New York City Fair Housing Center sued a landlord for allegedly quoting higher rental rates to black individuals posing as prospective tenants than to their white counterparts as well as for rejecting applicants with public rent assistance and making children undergo unnecessary lead tests. Five months earlier, a federal jury in Montana fined a landlord for charging a disabled tenant $1,000 to have a service animal.

Cases like these are stark reminders of the risks of neglecting to follow rules designed to protect renters from discrimination.

Every landlord, property manager and real estate agent should know not to ask verbal or written questions about an applicant’s race, skin color, religion, sex, national origin, disability or family status such as pregnancy and the presence of children under 18 – the seven classes protected under the Fair Housing Act. The same protections bar landlords from other behavior that can be deemed discriminatory such as posting ‘For Rent’ signs only in Spanish (discouraging non-Spanish-speaking applicants) or promoting a property in terms like “great building for single professionals” (discouraging families with children, married couples and partnered couples).
But knowing and complying can be two different things, especially with the continual evolution of case law related to housing discrimination.

The challenge is complicated by additional protections that may be provided under state and local housing laws. In Maryland, for example, state law forbids discrimination on the basis of marital status, gender identification or sexual orientation, and some cities and counties have defined additional categories such as age, sexual preference, occupation and source of income.

Tenant screening provides a first line of defense against discrimination complaints. That’s because differences in factors such as an applicant’s income, employment, references, and credit histories can help justify the selection of one tenant over another and thereby absolve landlords of discrimination charges. Here are eight recommendations for using the screening process to keep discrimination lawsuits at bay.

1 – DO apply your policies and procedures uniformly. Avoid running a full tenant screening report on some applicants and only a credit check on others, for example. If you have a policy of renting to applicants with the best credit, don’t make an exception for a would-be tenant with a better personality but a less positive credit report. Be consistent or be vulnerable.

2 – DON’T get too personal on rental application forms. Ask about jobs, previous addresses, income and references, but stay away from specific questions about things like spouses (just provide spaces for a list of all adults) and other categories protected under the Fair Housing Act.

3 – DO choose a ‘colorblind’ screening service. Some services have a colorblind scoring system that enables landlords to establish their preferred tenant profile based on specific parameters such as income, evictions and credit score, either using the service’s default tolerances or defining their own. The software then evaluates each applicant according to those criteria and returns a “recommend” or “not recommend” verdict completely independent of race, religion or other potentially discriminatory factors. This ensures that applicants are evaluated equally, providing a strong defense assuming the software’s recommendations are followed.

4 – DO stay abreast of new developments affecting screening. One of them is a pending amendment to the Fair Credit Reporting Act, introduced in Congress last August as S.1758. Currently, eviction reports used in the tenant screening process can include records dating back seven years. Under the amendment, called the Tenant Protection Act, only eviction records no older than three years and resulting in a judgment that is not being appealed will be allowed. Use of older records would be viewed as discriminatory.

5 – DON’T automatically reject an applicant with a criminal record. In 2016, the U.S. Department of Housing and Urban Development (HUD) issued a memorandum on how housing providers can, and cannot, utilize arrest and conviction records. According to Jodie McDougal, a partner at the Davis Brown Law Firm in Des Moines, these guidelines mean that landlords cannot have blanket policies excluding all applicants who are felons but must instead perform a case-by-case evaluation. McDougal’s explanation and recommendations can be found at https://www.davisbrownlaw.com/filesimages/attorneys/PDFs/HUD%20M emo%20IMHA%20Article_Final.pdf

6 – DO keep all documentation for up to 10 years. That includes rental applications, signed releases, tenant screening reports and any other data or documents collected during the screening process, even if you don’t rent to the applicant. This information can be crucial if a rejected applicant questions your denial or selection of a different tenant. A paper trail can help you prove that the person was not denied residency based on discrimination but because a more qualified tenant was selected instead.

7 – DO send a declination letter when rejecting a potential tenant. This document – also called an adverse action letter – specifies the reason or reasons for rejecting a rental application, such as income, employment or credit history. Services like TenantAlert provide free declination letters with all the federally required language and a checklist of legitimate reasons for turning down a candidate with every tenant screening order, helping to avoid screening-related discrimination claims.

8 – DO call your attorney when in doubt. There’s no way for you to be an expert on every aspect of fair housing, particularly with new legal challenges and decisions coming out on a regular basis. Be sure you have a local legal resource who can advise you on any questions, periodically review your rental application form, and potentially prevent you from making a mistake that may land you in court.

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