Selecting Tenants and Avoiding Fair Housing Discrimination Complaints


Selecting tenants is really one of my most important decisions as a duplex owner. If I screen poorly and select the wrong tenants, I could find myself with property damage, police calls, noise complaints, and even worse – an eviction case. If I select the right tenants, everything should go smoothly and I’ll hardly know they’re there. So I have to be choosy, but there are a lot of restrictions on the ways in which I can do so — I have to be sure not to inadvertently violate federal Fair Housing Laws.

I’m not a lawyer, but here’s what I’ve learned — with some help from Every Landlord’s Legal Guide

DECIDE ON THE TERMS OF THE RENTAL BEFOREHAND
You don’t want to be accused of changing the rules on people. Decide what the rent is, how many people you’ll accept, if it’s a fixed-term lease or a month-to-month, what pets (if any) you’re accepting, how big the deposit is, etc. If you don’t have this all defined beforehand, or arbitrarily set different rules for different people, you could open yourself up to claims of discrimination.

DECIDE ON YOUR SCREENING CRITERIA
You’re allowed to refuse to rent to anyone as long as it’s based on legitimate business criteria — poor credit history, poor rental references, past evictions, criminal history, lack of employment, lack of ability to come up with the security deposit, etc., are all fair game. You can enforce an occupancy limit also, as long as it’s reasonable and tied to health and safety or legitimate business needs. You cannot refuse to rent to someone because of their gender, race, religion, national origin, age, familial status, or disability (physical or mental — and this includes recovering drug addicts or alcoholics). In some states and cities it’s also prohibited to refuse to rent to someone because of their sexual orientation or marital status. You can also use your “gut feeling” about a tenant as a guide — you don’t have to rent to someone that you instinctively feel is a creep just because they passed the credit report and rental references criteria.

DON’T TRY TO “STEER” PEOPLE WITH YOUR ADVERTISING
Suggesting that a certain rental unit or community is more suited to people of a certain race, age, sex, etc. can be seen as discriminatory (unless you have a legally sanctioned senior citizen unit). If you include photos in your ad, including a photo of a white family or asian family in the unit could also potentially be seen as discriminatory.

SCREEN CONSISTENTLY
You can’t require credit reports for single 20-somethings and not married couples, or vice versa. Your screening methods should be equally stringent for all categories of applicants.

KEEP RECORDS
Keep a paper trail so that in the event that a complaint comes up, you have something to point to, and prove that your screening methods are objective and fair.


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One thought on “Selecting Tenants and Avoiding Fair Housing Discrimination Complaints

  1. I had this happen. I had just bought a duplex and i was living in the lower. I advertised on craigslist, and had a few applicants. I picked the ones with the best rental history and highest combined income. One of the rejected tenants filed a complaint with FHA alleging that I discriminated based on their family status (unmarried couple with three kids). I had explained in my denial letter the real reason, but they filed a complaint anyway.

    Long story short, the case was thrown out because the property was owner-occupied and less than 5 units, so the discrimination rules didn’t apply to the circumstances.

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