Every qualified applicant should have an equal opportunity to rent housing. Unfortunately, this hasn’t always been the case. All landlords must acknowledge the role that bias plays in which tenants they accept or deny, whether intentional or not.
Housing discrimination can sometimes be as implicit as the specific language used in a tenant application. It can also be more explicit, as in denying a tenant on account of a particular characteristic of their identity.
As a result of social justice and civil rights initiatives, anti-discrimination in housing is now legally enforced at the national and state level. The consequences of violating these laws are serious: In addition to legal liability and its associated fees, a discrimination lawsuit can damage your reputation. For the sake of your tenants and your business, you don’t want to risk it.
So how do you comply with fair housing laws? Below are the primary fair housing laws you should know as well as some best practices for fair screening.
What is the Fair Housing Act?
Simply put, the Fair Housing Act (FHA) is “the right to choose housing free from unlawful discrimination.” Established as a result of the Civil Rights Movement, the FHA was signed into law directly following Martin Luther King Jr.’s death in 1968.
The reason why this context is important is because the history of housing discrimination in America is substantial. In the sixties, the real estate industry discriminated especially against black families, who were blatantly denied homes and apartments in many neighborhoods.
Today, the FHA encompasses seven protected classes, including race. It is also unlawful to discriminate based on color, religion, national origin, sex, disability, and familial status.
Local & State Laws
Beyond the Fair Housing Act, many states and local governments impose their own protections for renters. For instance, some states limit discrimination based on citizenship, age, marital status, veteran status, sexual orientation, and others.
The best way to protect yourself from legal liability is to educate yourself about state and local laws before screening. Know all the relevant clauses and be sure you’re in compliance. It might also be helpful to consult a legal expert or contact your state fair housing agency to learn more.
State laws also come into play during criminal background checks. While some crimes are valid justification for a denial, others may not be. For instance, it may not be legal to deny housing based on petty crimes like parking or speeding tickets. Once again, check with a legal professional to clarify which reasons are legitimate for denying an applicant.
Fair Screening: Best Practices
Now that you know all the relevant laws, it’s time to put fair housing policies into practice. Here are a few practical tips for fair tenant screening.
Screen every tenant the same way.
This is perhaps the most important guideline in fair screening. It’s imperative that you use identical screening practices for each tenant. Skipping a screening component (or adding an extra one) for any applicant will significantly influence your decision to accept or deny. Instead, seek the same kind of information each time you screen tenants.
Before you start screening, establish a set order and number of checks you will carry out. Formalize this list and keep it with your records. This practice is especially necessary if/when you use social media—you should know ahead of time which platforms you’re searching and what kind of information you want to find.
Set minimum requirements.
In addition to predetermining the types of screening, you should also set minimum requirements for tenants. This habit not only safeguards you against potential discrimination lawsuits, but it also speeds up and quantifies decision-making.
Minimum requirements will vary with individual preferences, but landlords tend to agree on a few. Tenants should generally have income at least three times the cost of their monthly rent. They should also have no prior evictions, at least three years of good rental history, good references, and a clean background.
Use a tenant scoring system.
A tenant scoring system is a weighted point system for rating applicants’ eligibility to rent your property. Scoring systems have many benefits, including objectivity, easy decision-making, and clear documentation should you ever be asked to justify a denial.
Many tenant scoring templates are available for free online, but you can also create your own. Be sure to keep the document handy and use it every time you screen a new tenant.
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Fair Screening; Fair Housing
Certain tools like property management software make tenant screening infinitely easier than traditional methods. However, the importance of adhering to fair housing laws cannot be stressed enough. Take responsibility for fair screening in your rental business, and you are sure to be rewarded with high-quality tenants.