Fair Housing Tips For Landlords

It is critical for landlords to comply with Fair Housing when screening tenants for many reasons– legal, ethical, and business.

However, it is not difficult to avoid problem tenants before the lease is signed and still be fully compliant with Fair Housing regulations. Landlords can check this post out for a go overview of Fair Housing regulations 10 Things Landlords Should Know About Fair Housing

The first thing to remember is to treat every applicant the same.

We have had a large number of new landlords register with TenantMagic and I been getting calls with questions about co-applicants. Some landlords tell me that they give married couples a break on their application fees or do not require the wife to complete an application and background screening.

This is a bad practice and can result in the owner running afoul of Fair Housing regulations.

Any co-applicant must be treated the same regardless if they are married to the primary applicant.

The TenantMagic application instructs all applicants 18 and over to complete the application and authorize the background screening.

This not only helps with Fair Housing compliance but makes good business sense. It important to know if any of your tenants have a felony conviction or a history of collections from creditors.

TenantMagic charges each applicant an application fee. Many landlords I have spoken to feel that a fee for each applicant can pose an obstacle for applying.

My response to the landlord is they can offer to take the fees off of the 1st months’s rent if accepted.

The benefit of charging an application fee upfront, is to minimize the number of applicants that would not qualify (based on Fair Housing allowed criteria).

TenantMagic’s goal is to reduce the time landlords and agents spend with unqualified applicants while providing them with comprehensive information to make an informed decision.

This post is for guidance purposes only and is not intended as legal advice. If you have any questions regarding fair housing laws, please consult an attorney or the proper regulatory agency.

Paper rental applications? Do you know what century we’re in?

It never ceases to amaze me the number of agents, landlords and property managers that still use paper applications.

In my last 2 posts I covered how paper applications can complicate Fair Housing compliance and the create personal data security problems.

Today we will look at how time consuming paper applications are, how they make  your business look antiquated and can affect compliance with Fair Housing laws.

Paper applications, whether they are handed out or a downloadable pdf, require the agent/owner/ property manager to enter all that information into the background screening program. (If you are not screening your prospective tenants, then you are just asking for big trouble.)

Typically this can take up to 10 minutes or more per application, which  adds up when you have multiple vacancies.

Paper applications are usually accompanied by paper checks or credit card information application fees that need to be written out and then entered into a payment system, again requiring even more time with data entry.

Still not convinced? Do you still feel that all this paper and redundant data entry is really not that big of a deal?

Then consider the image that you are portraying to your prospective tenants. If you are using paper applications and collecting fees with paper checks you are giving people the impression that your business is not up to date. What are going to think about your property and its maintenance?

Fair Housing compliance is also an issue with paper applications. A blog post by OneRent http://blog.onerent.co/fair-housing-rental-application/  reports that “Many landlords notice that the paper rental applications that they receive, are rarely complete. In most of the cases, the tenant provides half-finished applications that make it difficult for property owners to scourge for and scrutinize additional information. Some tenants provide basic bio data at first and additional bank statements and credit reports later, leaving the property owners with no option but to hand over the house to a new tenant in the interim period.”

Due to the lack of complete information, landlords often discourage potential tenants from looking into their properties or steer such applicants towards another property. This constitutes a violation of the anti-discriminatory housing laws.

Using a reputable online application and screening company makes sense on so many different levels. The amount of time you save and the how you present yourself and business are just two reasons to switch.

Jay Apple is co-founder of TenantMagic www.tenantmagic.net, an online rental application and background screening provider that is free to real estate agents, property managers and landlords.

 

Are you still using paper rental applications? – You really need to stop.

There are a number of very valid reasons why paper rental applications can adversely affect your business.

  • Fair Housing compliance issues
  • Information security concerns
  • Redundant data entry
  • Negative impressions

I will address each reason in separate posts.  In this post I will look at  potential Fair Housing compliance issues with paper applications.

The Fair Housing Act was enacted to protect rental applicants and tenants from discrimination and bias by a landlord or real estate agent.  The law which is very comprehensive and among other things, prohibits property owners and landlords from:

  • Refusing to sell or rent out a house based on the race, religion, color, gender or nationality of the tenant
  • Having different terms and conditions for different applicants based on the race, religion or nationality of the tenant for the rental or sale agreement
  • Promoting or advertising the rental with a section that seeks a specified  preferred gender, race or nationals to apply

Please note that Fair Housing laws can vary by state and even municipality. This post is not intended to provide legal advice. If you have any questions about the fair housing laws in your area, please check with an attorney or the proper authorities.

According to Ron Leshnower, who is an attorney, and Founder and President of Fair Housing Helper,  addressed the question – “Do I Have to Accept Applicants in the Order they Applied?”

His answer is “no,” but adds that “…you might want to because accepting applicants out of order, though not illegal, could give the impression of discrimination and may cause legal problems for you.”

Penalties for violating the Fair Housing Act can be very severe. Violations are typically investigated weeks or even months after they are reported. It is incumbent on the landlord or real estate agent to provide documentation that the violations did not occur.

Paper rental application makes compliant rental documentation next to impossible for the following reasons.

Many landlords and real estate agents that do use paper applications can tell you that they regularly receive applications that are missing information. While they are trying track down the applicants to get the information, they are getting new applications for that property.

Landlords can appear to be discouraging potential tenants from applying to their properties or steering them to another property when they select an application from someone who has provided a completed application after a partially completed application was submitted.

This can be considered a violation of the anti-discriminatory housing laws.

Even when the landlord does follow the rules, rejected applicants can claim, rightly or wrongly, that they were turned down due to race, ethnicity or any other of the protected classes. As indicated, the burden is on the landlord to show the first qualified applicant was accepted, which can be very difficult with a paper application months after the fact.

With properly designed online applications, you get two benefits to help keep you compliant with Fair Housing regulations –

  • The application cannot be submitted unless it is complete.
  • Successfully submitted applications are date and time stamped.

Assuming you are complying with Fair Housing rules and consistent with your application process for each applicant, an online application provides you with documentation should a complaint arise.

 

Fair Housing-Compliant Tenant Screening

Fair Housing compliance when screening tenants is so important on many different levels – legal, ethical, and business.

However, it is not difficult to avoid problem tenants before the lease is signed and still be fully compliant with Fair Housing regulations.

It is vital to set and clearly communicate your rental criteria and building standards upfront when screening applicants. If you do get phone inquiries, make sure that you provide each inquirer the exact same information and keep any conversations strictly to the property itself.

Most importantly, the residency requirements must be prominently displayed at the beginning of your application.

Unqualified applicants will typically screen themselves out of the application process if they don’t qualify for your residency requirements and are required to pay an application fee.

Fair Housing compliant standards and criteria can include

  • Rent to income ratio
  • Prior evictions
  • Bill payment history
  • Criminal history

(Please note that state and local fair housing laws can add other protected classes or have regulations that vary from federal laws, so check with your state and municipal housing authorities to make sure you are compliant where your rental properties are located.)

Finally, keep good records of each applicant or inquiry in case you do need to provide documentation if a complaint arisies.

This post is for guidance purposes only and is not intended as legal advice. If you have any questions regarding fair housing laws, please consult an attorney or the proper regulatory agency.