A landlord has specific obligations. One important responsibility, for instance, is ensuring that you do not violate the law or do something illegal when you are choosing or screening potential tenants. Refusing possible tenants based on factors that are considered as discriminatory is against the law. The information below will introduce you to some of the regulations that you need to follow when accepting applications from prospective tenants, and there are also useful details regarding tenant selection.
1Obtaining The Necessary Tenant Details
To avoid huge mistakes during the process of selecting tenants, it's a must to routinely ask applicants to correctly fill out the application form and provide references, as well. You should also ask them for the contact numbers of the people whom you should call in case of an emergency. Keep a record of such details because in case the tenant gets into an accident or he plays truant, you can readily track him down by calling a close friend or a relative. Moreover, ensure that the leasing contract gives you the landlord permission to perform required checks like employment background or credit checks regarding an applicant, not only during the application process but it could also cover the entire term of the lease.
2Background Checking On A Tenant
What's the point of asking for references if you don't intend to call these people, right? Inform them that you are going to call them to talk about a certain applicant, and ask them a few basic reference questions. You could even get their opinion about whether or not an applicant will be a good renter. Keep a record of the responses so that you can refer to this later. Also, ensure that the individual whom you are talking to is not hesitant; keep in mind that these people may personally know the tenant, which might make them hesitate because of what they know.
It's a must to pay attention not only to the positive but also to the negative things that someone might say about a particular applicant. Try to ask the tenant applicant and his references the same questions to check if their answers match. Moreover, see if you can get a better idea about the character of the applicant. Don't be shy to ask the reference about how long and in what capacity he knows the applicant. At the onset of the interview, make the reference person comfortable so that he'll readily open up.
Make the references comfortable so that they'll talk more, and one way to do this is by preparing a list of questions. Simply ask these persons to answer the questions on your list and verify if the answers of the applicant coincide with what his references say. Confirm important information, such as the would-be tenant's last place of residence, the size of his family (if he is not single), and others. Encourage the references to open up by avoiding questions that can be readily answered by "yes" or "no," and ask open-ended questions instead. To explain, instead of asking the reference if the applicant is employed or not, ask him to describe the person's work history.
3Interviewing Tenant Applicants
During the application process and approval, you have to ask the applicants a series of routine questions. Landlords must also get additional information to verify the applications, particularly regarding certain categories. These include job or work details, income, credit history, past eviction records (if there are any), rental history, and crucial basic information, such as name, job, as well as past and current addresses. Most would-be tenants are aware that they will likely be asked such questions.
As a landlord, you can ask follow-up questions so that you can gain more insight into an applicant. Perhaps you can also ask for a potential tenant's social security number, birth date, as well as driver's license. If possible, keep photocopies of these records and file them for verification purposes. You are also allowed to ask an applicant some questions regarding his capacity to pay the rent or comply with the rules of the rental property, such as whether or not he can abide by the "no pets" allowed policy. It is within your rights to find out if an applicant has pets or not during the application process before you do approve him.
4Avoiding Discriminatory Questions
You should be aware of the questions that are considered as discriminatory, and you cannot ask applicants to answer such. The HUD (Department of Housing and Urban Development) says that renting a property is considered as a controlled activity. It further mentions that certain actions may not take place because of the following: color, race, national origin, sex, religion, handicap, or familial status. These include: refusing to sell or rent a house or property; refusing to negotiate; making housing unavailable; denying dwelling; having different terms as regards rental fee or privileges; providing different facilities or housing services; and falsely denying housing availability, among others. In other states or regions, there are also laws that prohibit discrimination due to a person's sexual orientation, job, or immigration status.
Landlords are not allowed to ask any question that can be considered as discriminating in nature. But this does not mean that you cannot refuse an applicant. For one, it is possible to turn down an applicant with a poor credit history or one with not enough income to cover the rental fee.
5"Steering" Would-Be Tenants Is Illegal
As for "steering," this is when you lead renters towards a particular unit. This is a violation of the Fair Housing Law; thus, it is illegal. When it comes to renting, violations can either be intentional or not.
To explain, let's say that you own a rental building with two units and both of these units are available. A prospective tenant in a wheelchair comes to check out the place. As a landlord, you may immediately think that showing him the lower unit is the more logical option because he'll likely have a harder time with the upper unit. So, you take your renter to the lower unit with the intent to help him out, but you inadvertently get yourself in trouble because of it.
Simply put steering is when a landlord chooses what he thinks the applicant must have, instead of allowing the would-be tenant to decide for himself. Steering often occurs, whether intentionally or unintentionally, when a tenant falls under a protected category. However, as mentioned, the HUD states that there should be no discrimination based on race, color, religion, sex, national origin, disability, or family status. Individuals who fall under any of these categories belong to a protected class. In some states, there are more types of protected classes as there are also laws that prohibit discrimination because of a person's sexual orientation or age.
You will undoubtedly face many challenges if you choose to rent out your property. If you don't do your homework about the laws that apply in your state, you may get into legal trouble, like being penalized or may be imprisoned, even if you did not mean to violate any law. Therefore, you must be careful when screening applicants.
Just remember that you also have some power regarding tenant selection. But, see to it that you avoid steering tenants or discriminating against certain groups of people, particularly those who belong in protected classes. With due diligence, you will surely find good tenants!