Nowadays, it’s not difficult to become a landlord, but how to keep ourselves away from lawsuit or litigation is not that easy. We often hear cases that landlord being sued for rejecting applicants with rent assistance or with support animals, and cases like these are reminders for landlords that neglecting to follow anti-discrimination rules can end up with serious consequences. The fundamentals of fair housing law that we know are we shouldn’t ask any questions or base any housing-related decisions on an applicant’s race, color, religion, sex, national origin, disability or familial status, but knowing the law and complying with it are two different things, so it’s highly recommended to follow certain screening process to avoid any troubles.
DO apply your tenant requirements uniformly. If you have some tenant requirements like credit score no less than 680 and combined income no less than three times of monthly rent, make sure to disclose that upfront and use these requirements on every application. Be consistent is very important.
DON’T get too personal. You can ask about jobs, rental history, income and references, but stay away from questions about family situations, as well as other protected characteristics under the Fair Housing law. Based your decisions only on income, credit score and rental history. Don’t get too personal or emotional.
DO keep all related documents for up to 10 years. That includes but not limited to application forms, tenant screening reports, tenant’s IDs, leases and other related documents during the process, even if you don’t rent to that applicant or the deal fall through. Those information may be very important if a denied applicant decides to question your decision. Also, all communication records should be kept as well, and that’s why we recommend using written communications like email or text messages.
DO send a denial letter when rejecting an application. The Denial Letter should specify the reason or reasons that you rely on for rejecting an applicant, such as insufficient income, or credit history, but like we stated previously, if you do have certain requirements, disclose them upfront to save time and potential tenant’s money.
DON’T automatically deny an applicant with a criminal record or with housing vouchers. If your rental property is within Austin city limit, you even can’t refuse to accept housing voucher as a source of applicant’s income.
DO contact your attorney when you are not sure about something. Using a realtor to list your property for rent and screen potential tenants will help keep you away from trouble, but realtors are not attorneys and can’t provide legal advice, so make sure to ask an attorney or look for legal advice when you are in doubt.