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Tenant Screening – Make Sure You’re Not Discriminating

Close Up View of a North Austin Rental Property ApplicationA vital part of owning successful North Austin rental properties is tenant screening. However, it is easier said than done. Federal or local landlord laws will affect how you go about your screening process. These laws are in place in order to reduce potential discrimination against tenants. This is why you should aim for your tenant screening to not just be thorough, but also to not be categorized as discrimination. When you steer clear of discrimination, you also protect yourself from expensive lawsuits and ensure that your dealings are fair and in compliance with all relevant laws.

When it comes to federal laws about discrimination, property owners should be well versed with the federal Fair Housing Act (FHA). This set of laws impacts each aspect of tenant-landlord interaction. As a property owner, you are forbidden by the FHA to refuse rental of a property based on a tenant’s race, religion, family status, or disability – to name a few. The FHA also does not allow landlords to tell a tenant a rental house is unavailable when it is, or to require a certain set of tenants to meet more stringent criteria. This also includes asking for a higher security deposit from some tenants or evicting them for something you would otherwise allow from a different tenant.

You must prepare a clear set of guidelines for every interaction you have with potential or current tenants. You must apply these on the very first conversation you have with those inquiring about your rental property. Make sure that during this conversation, you already discuss the approval criteria as well as other expectations.

However, you should not ask questions that might force your tenant to give up protected information. Queries about heredity, race, or national origin are usually inappropriate during tenant screening. Questions about disability or familial status are to be avoided as well. None of these questions must be on your application documents. In addition, you are not to have conversations about them unless the tenant brings it up.

You should also check your screening process for other possible forms of discrimination. As a rule, landlords must process applications and screen tenants based on which one came first. Once an application has been received, a landlord must always process it immediately and not wait for someone else to apply. That would also be discrimination. If an applicant has paid the required fees and their application documents are complete, you should continue with the screening process for that applicant. Disqualifying an applicant based on pre-determined criteria, such as their credit score or poor references, is perfectly fine. On the other hand, it is not right to make an applicant wait for an answer because you keep hoping for another person to qualify.

Lastly, you should have a complete understanding of the laws in your area that pertain to renting to people with a criminal record. The FHA leaves property owners with a surprising amount of leeway when disqualifying a tenant based on their criminal record. However, you must know which criminal offenses are considered sufficient reason to refuse someone a rental application. Knowing how your local laws differ from federal laws will help you adjust and align your tenant screening process.

Knowing the laws in your area can help you ensure that your tenant screening process isn’t discriminating against any specific applicant. Doing so will help you avoid legal problems usually related to discrimination lawsuits.

Need some property management advice, or maybe you’d rather have someone else take care of it for you? Give Real Property Management Longhorn a call at 512-580-3099 or contact us online today!

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

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