How To Use The Fair Housing Act To Screen Tenants

said on August 17th, 2015 categorized under: Buying A Duplex, Tenants

duplex tenant screeningI am in the process of renting a vacant unit I just got done rehabbing.

As I look for a new tenant, I am trying to use my experience with the last residents to guide me.

Frankly, there were warning signs with those people the day they applied to rent the unit that I didn’t heed.

And I’ve since come to the conclusion that had I simply had written criteria for tenant selection present at the property when they applied, they may never have even filled out the paperwork.

The federal Fair Housing Act prohibits landlords from discriminating against a prospective tenant due to race, color, national origin, religion, sex, disability, and familial status. State laws (depending on where you live) may go further. In Minnesota, for example, landlords may also not prohibit someone from renting due to creed, sexual orientation or public assistance.

The easiest and best way to make sure to be in compliance with these laws is to have a written set of criteria as to what you are looking for in a tenant. This list is just a set of guidelines available for prospective tenants to view before applying for the property.

For example, these guidelines may include things like:

  • Must have no criminal background.
  • Must have no prior evictions.
  • Must have verifiable employment history.
  • Must have landlord references.
  • Must have a minimum credit score of 600 (or whatever number is acceptable to you).
  • Must provide a copy of a drivers license.
  • Must provide an application fee (equal to the amount the company you use charges for a background check)
  • Maximum percentage monthly rent must be to income.

It is the last item on the list that would have saved me the challenges caused by my last tenant. After paying rent, they were left with about 40 percent of their monthly income to live on. I discussed this with them at the time, voicing my concern, but didn’t have it clearly stated as a barrier to application.

They were persuasive, and I didn’t stick to my guns. Of course, as soon as life threw them a curve, it affected their ability to pay rent.

Looking back, I wonder if I’d had the written criteria stapled to the application like I do now they would have even applied.

Lesson learned. Not only does having this information on hand protect me from the risk of being accused of discrimination, it would have saved me court costs, rehab costs and all the lost income from the months the property was vacant and being repaired. The tenants who talked me into renting simply wouldn’t have applied in the first place.