For new landlords, knowledge is power

Landlords who are new to the business can sometimes be naïve to the amount of things they need to know right off the bat. It’s not enough to have a great rental property ready for a tenant, or to have researched the market to figure out an appropriate amount to ask for in rent. There are rules and laws and inside information every new landlord should find out before getting that first lease signed. 

Because you don’t know what you don’t know, we’ve made it easy by outlining the most important things a new landlord should research before beginning your business. 

1. Become very familiar with the state landlord-tenant laws in the state where your rental property is located. 
2. Read, internalize and follow the federal Fair Housing Act of 1968 and the federal Fair Housing Act Amendments Act of 1988, to make sure you’re not breaking any laws regarding discrimination when screening and accepting (or rejecting) prospective tenants.
3. Research a reputable tenant screening service to carry out this most important part of your business. If you sign up with the first (or cheapest) fly-by-night screening service you find on the internet, chances are you’ll get what you pay for.
4. Join and participate in the local landlord association where you are. You can make  great contacts and get tips and insider info from this local resource.
5. Check into the building codes for your neighborhood, as well as any neighborhood association laws and rules that your tenants (and you) might be expected to adhere to. 
6. Find a good lawyer who specializes in landlord-tenant law, and use that resource to check leases, eviction notices and any other legal documents or forms of communication between you and your tenant.  

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The first impression is a crucial step in the tenant screening process

A lot has changed about the tenant screening process and the world in recent decades. We are a more casual society – we dress more casually, speak more casually to strangers, among other things. Still, you can tell a lot about a person from his or her first impression, and that is still an important step in the tenant screening. Sure it’s crucial to obtain their credit report and conduct a background check, to verify their employment and check references. But meeting a prospective tenant face to face satisfies a “gut check” that you can’t get strictly from a written report. 

There are a few things to look for when meeting a tenant applicant at the rental property, things that can go a long way toward helping you decide whether the applicant is worthy of becoming your tenant. 

• His attire. Applicants likely won’t treat your face-to-face meeting like a job interview; they mostly dress casually, and that’s fine. But are the clothes clean and presentable? Is there basic hygiene? The way a person presents himself says a lot about the value they place on themselves and their interactions with others. If he doesn’t respect himself, he might not respect you. 

• His interest. Does he seem honestly interested and excited about the prospect of living in the home? Is he engaged and open with you? 

• His questions.  Does he ask questions about breaking the lease, pets and other rules that lead you to believe he’ll be trying to get one over on you? 

• His application. Are there misspellings and blank spaces? Is it completely filled out? Is he making excuses about what an ex-landlord or employer might say when you call his references? These are all red flags to keep in mind when conducting the tenant screening.

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Interpret eviction records correctly to avoid errors in judgment

If you are a landlord or property manager who uses tenant screening as a reliable tool to weed out potentially bad tenants and find the best ones, congratulations – you’re doing yourself and your business a big favor. But if part of that tenant screening report includes an eviction record, your interpretation and actions regarding the results could open you up to discrimination claims, not to mention unfairly denying a potentially wonderful tenant the chance to live on your property. 

The use of eviction records can be very helpful, but be careful about the way you use them. So when requesting an eviction records search, keep these things in mind:

• The date of the judgment: According to the Fair Credit Reporting Act, civil suits, civil judgments, and records cannot be taken into account in the rental decision if they are older than seven years or until the governing statute of limitations has expired, whichever period is longer.
• The number of records returned:  A single offense may be due to special circumstances, while a list of offenses most likely indicates a much larger problem. If there is a single offense, ask the applicant to explain the situation, and contact the former landlord to back up their story. 
• The information contained in the record:  Any system that returns instant results has the potential for error. Verify that what you receive matches other information provided by your applicant or other areas of their tenant screening report. 

If you follow these guidelines and leave room for a frank discussion with your tenant applicant and his or her previous landlords, you could do both of you a favor and avoid an error in judgment that costs somebody a great place to live, and costs you a good tenant. 

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Recovering alcoholics protected under Fair Housing laws

It’s easy to make a decision on a tenant applicant whose background check turns up a recent drug-related conviction. But what about an applicant who admits to being a recovering alcoholic, or whose tenant screening report finds a court-ordered and completed drug addiction rehabilitation program?  Does such a red flag constitute grounds for denying the person’s rental application? 

One might think so, but the answer is no, and landlords must be careful to not go against Fair Housing Laws in this instance. The federal Fair Housing Act prohibits discrimination in housing based on a disability, which is defined as a physical or mental impairment that substantially limits at least one major life activity. This definition covers people recovering from alcoholism and drug addiction.

Tenant applicants who have successfully completed a drug treatment program (and can prove it) are protected under the disability provisions of the Fair Housing Act. This means that a landlord cannot refuse to rent to someone solely because of a history of drug addiction. 

If you’re dealing with a criminal conviction, especially a relatively recent one, then you are within your rights to deny the applicant. But be sure your decision doesn’t go against Fair Housing law and unfairly deny someone who is doing their best to get their life back together.

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Social media background checks more trouble than they’re worth

Most landlords use traditional methods to perform background checks on prospective tenants, but some are branching out to social media outlets to do some investigative work of their own. While it may be tempting to log on to Facebook and Twitter and try to see what you can find out about a would-be tenant’s lifestyle and personality, the social media background check tactic brings with it a host of potential legal issues if what you find becomes the reason you decline to rent the property to that person.

Fair Housing laws are very clear about the fact that it is illegal to deny housing to anyone based on race, color, national origin, religion, gender, familial status and disability. These are, by and large, well outside the realm of the typical rental application, so finding out and exhibiting some bias against a person based on what you find out through Facebook could lead to some serious legal ramifications. Another potential problem is that sometimes the wrong person’s profile is mistaken for the applicant in question. There are many, many duplicate names out there, and it can be difficult to ascertain whether you’ve got the right John Doe’s Facebook page.

The better idea is to stick with a professional tenant screening service, a company with a proven reputation for being thorough and following the letter of every law. Paying someone for fact-checked reports on an applicant’s credit, criminal record and employment is a far better use of your time than surfing the internet and potentially finding something that’s either false or could get you in trouble.  

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Service animals are an important exception to the “No pets” rule

Any intelligent landlord who’s been around the tenant block a few times understands the importance of treading lightly when it comes to allowing any and all pets to live in one’s rental property. It’s not discriminatory to prohibit pets of a certain kind – or all kinds – from living on your property, as “cat owners” or “dog owners” are not a protected class. There is, however, one very important exception to this rule, and that is the service animal.

Service animals and their owners are protected by the federal Fair Housing Act, which prohibits housing providers from discriminating against applicants or tenants because of a disability. The law requires owners and landlords to make reasonable accommodations to allow those with disabilities equal opportunity to live there. This includes adjusting rules or policies, such as allowing dogs on the premises, or increasing the usual weight limit for a pet for a person who requires the assistance of an animal for a disability-related need.

Having said that, it’s important to note that a tenant with a service animal doesn’t get a free pass, exempt from all of the rules other tenants must follow. For example, they must keep their animal under control at all times and the animal must not become a nuisance or a threat to other tenants or neighbors.

The best way to handle such a situation is to keep lines of communication open with the tenant, and to review the law to make sure you are and remain in compliance.

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Avoid discrimination traps when advertising rental property

Landlords are very careful to follow the letter of the law when it comes to tenant screening and deciding who to accept as a tenant. Nobody wants to be accused of being in violation of Fair Housing laws for rejecting a particular tenant applicant.

But adhering to the Fair Housing Act begins even before the selection process. It begins with the way you advertise the rental property and market it to potential tenants. The Fair Housing Act states that it’s unlawful to publish any advertisement for the sale or rental of a home that indicates any preference, limitation, or discrimination against people who are covered by what are seen as the seven protected classes:  race, color, national origin, religion, gender, disability, and familial status (whether or not you have a child under 18 living with you). 

The biggest trap landlords fall into with regards to advertising rental property is that they go one step beyond describing the unit and also describe the type of tenant they think would be best suitable for the property. Most landlords do this to be helpful, regarding it as a smart marketing tactic to market the property to the type of person you think would be the best fit. But describing a one-bedroom apartment as being “ideal for a single person” places your ad on the non-compliance list for making yourself appear to be discriminating against families.

The best way to avoid any discrimination claims against you is to stick with a straight description of the rental property, highlighting its best features.

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