It's a common assumption among first-time real estate investors that they can rent their properties to anyone they want to. However, sometimes choosing who you want to rent your property can lead to discrimination claims if you aren’t aware of the law.
The Federal Fair Housing Act has put regulations into place to protect renters and make it illegal for landlords to discriminate when selecting and managing renters. Unfortunately, property owners unfamiliar with the law can find themselves in some expensive trouble. As the best property management company Cathedral City trusts, we have a few tips on making sure that you’re complying with these regulations during the tenant screening process.
The Fair Housing Act ensures everyone has an equal right to available housing, regardless of age, race, gender, religion, familial status, or disability. While the law is very specific, its general purpose is to ensure that rental property owners give everyone an equal chance at obtaining housing.
Real estate investors sometimes assume that the Fair Housing Act requires them to maintain certain ratios or make reports on compliance to the government. However, neither of these is required. Instead, the law is designed to ensure that property owners do not favor one group or individual over another when selecting new residents for a property.
So, how do property owners comply with these regulations? A Cathedral City property management company can guide you through a legal (and thorough) tenant screening process. Generally, this means that landlords need to ensure two things; a rental unit is fairly offered to everyone and that there has been no discrimination when it comes to reviewing applications deciding who gets to lease the property.
Fair Housing laws do not give requirements to property owners about how they should or should not market rental properties to comply with the terms of the law. However, it’s essential to set up marketing practices that give equal opportunities for all prospective tenants to find, apply for, and be in the running for a rental unit.
Because of this open-ended phrasing in the law, property managers recommend having a clear procedure when they rent a unit and follow the same process with everyone to avoid violations. This includes fair advertising practices, including placing signs that everyone can read or advertising in newspapers and flyers that are accessible to everyone. Property owners must also avoid advertising that excludes certain groups of people. For example, setting up an ad on Facebook to only reach people of a certain race or family situation has been considered a violation of Fair Housing laws.
In addition, when prospective tenants inquire about the property, the owner or showing agent should be careful not to ask about their race, age, familial status, or disability status via phone or email. Similarly, it is essential not to reference any of these characteristics during a showing or make any comment that could be interpreted as discrimination.
Next, rental property owners should have an application process that is the same for every potential tenant. A property manager recommends providing the exact same application for all potential tenants and insisting that they fill in all information to accept the application. The application would not ask questions about any protected categories.
Then, property owners should have a straightforward procedure for determining if an applicant is eligible for a unit and make those requirements available upon request. Setting your criteria for a rental unit before the marketing and application process can help investors avoid discrimination claims. For example, if you plan to use credit score as a determining factor, make sure that the application has all of the information necessary to run a credit check and tell potential tenants what credit score they will need to qualify for a unit. By keeping the process the same for all applicants, a property owner ensures that everyone has an equal chance to get the unit.
Finally, make sure that you have a written policy that spells out who will get a unit in the event that there are multiple qualified applicants. Ideally, units should be filled on a first-come, first-served basis for qualified renters to keep things fair. However, if multiple people apply at the same time, make sure you use the same criteria to determine who will get the unit.
If you are looking for help to ensure your tenant screening process complies with the Fair Housing Act, the best property management company Cathedral City offers can help! Mclean Company has a proven strategy for marketing rental properties and screening tenants. To learn more about how our property management services help investors follow the law, reach out soon!
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