If you currently own a rental property or you plan to buy a property and rent out all or part of it, it is critical that you understand the laws that apply to advertising your
unit and screening prospective tenants. It can be quite easy to inadvertently create a discriminatory advertisement for your unit, which can mean a violation and a fine for you. Brush up on the Fair Housing Act and other real estate laws to ensure that you completely understand your rights and responsibilities as a landlord.
Compliance with the Fair Housing Act
The Fair Housing Act of 1968 prohibits discrimination against prospective home buyers and tenants on the basis of their:
- Color;
- Race;
- Religion;
- Sex;
- Familial status;
- National Origin; and
- Disability.
Though you might prefer not to have young children in your rental unit or the unit might not be suitable for an individual in a wheelchair, you cannot include language in your advertisement for the unit that discourages any specific group from applying to rent it.
Speak with an experienced real estate lawyer to determine if your home or rental property is exempt from the requirements in the Fair Housing Act. Under certain circumstances, single family homes sold and rented without brokers and multi-family homes where the owner occupies one unit are exempt.
Legal Ways to Screen Prospective Clients
To avoid facing a citation for violating the Fair Housing Act, screen tenants according to the same criteria. The Department of Housing and Urban Development (HUD) regularly hires individuals to pose as prospective tenants to catch landlords in violation of the act, so assume that everybody who visits your unit as a prospective tenant is working for HUD.
You can legally screen prospective tenants based on the following:
- Credit scores;
- Their ability to pay the rent you are asking for the unit; and
- Any information you find in their credit checks.
If you decide you will not rent to anybody whose credit score is below 700, you must apply this standard to all applicants, regardless of their race, religion, familial status, or any other protected class.
In addition to the Fair Housing Act, many states have additional laws landlords must follow to avoid discriminating against prospective tenants. During your consultation with a real estate lawyer, discuss your state’s laws in detail to determine if there are additional considerations you need to make.
Work with an Experienced Real Estate Lawyer
As a landlord, it is important that you work with an experienced real estate lawyer to write enforceable, appropriate leases and rental agreements. If you have questions about what you can and cannot include in a lease or rental agreement or about how to handle a legal issue that arises with your tenants, contact our team at Moen Sheehan Meyer, Ltd. today to set up your initial consultation with us to discuss your case in greater detail.