Your rental property is ready for tenants, and now you are preparing to launch the screening process. Congratulations!
Are you familiar with the phrase you don’t know what you don’t know? Let’s address that in the sense of keeping yourself legal with potential tenants. First, before you advertise your property have a precise pre-screening process in place. Make it simple. Develop a script of questions to ensure you are fair and consistent with each caller.
What you might not know: You must treat potential tenants with equality. This means you ask the same questions and apply the same requirements to each person. If you require a credit report for one applicant, for example, you must run a credit check on each applicant. Do not select or reject applicants based on personal reasons. You may reject applicants based on legitimate business criteria—such as bad credit history, insufficient income, or a history of consistent late rent payments. Ensure you are familiar with the Fair Housing Act, which prohibits discrimination on seven protected classes, as well as any classes a state or city protects.
*The following are suggestions only and are not intended to take the place of solid legal advice. Always consult with an attorney before drawing up your rental agreement to make sure your unique situation is understood. You can also hire a property manager to take care of rental agreements for you.
What You Can Legally Ask Potential Tenants
The phone rings and you are excited to talk with your first potential tenant. Yes! Save yourself time and effort, verify the monthly rent amount and property location with the caller. Renters shop around and tend to lose track of who they have spoken with.
Allow the caller space to ask their own questions, which typically gives you an indication of what they are looking for in a rental property and helps them determine if the property is a good fit for their needs. Then, ease into the legal questions you have prepared.
1. When would you want to move in?
2. Can you pay the move-in costs at the time you sign your lease?
3. Do you have pets?
4. Why are you leaving your current residence
5. Does your landlord know that you are thinking of moving?
6. Have you ever had an eviction?
7. Are you willing to sign a 1-year lease agreement?
8. What is a rough estimation of your income?
9. What will your score be on a credit check?
10. Have you filed for bankruptcy recently?
11. Is there anything I should be aware of before I run a background check on all the adults in your household?
12. How many parking spaces do you require?
13. How many people living in your household smoke?
As your potential tenants answer these thirteen questions, you may need some clarification. Base any additional questions you have on your rental policies. Steer away from asking questions that might reflect your personal thoughts or feelings.
For example, if the caller tells you they currently do not have funds for the move-in costs, specifically spell out how much you require at the lease signing: first month’s rent, security deposit, application fee, and pet fee(s). Explain to the caller that applications are denied if the potential tenant is unable to meet the monetary requirements. Do not respond with statements that include, “I feel,” instead, say, “Our policy is…”
Or perhaps the caller indicates that they cannot move in for another three months. You can state that you will only rent the property only to applicants that can move in within a month, week, or a certain number of days.
The potential client may decide the rental is not a good fit for their needs and move on at this point, which is great because they’re the ones exiting out of the decision. Not you. Your next step in the process is simple, move on to the next caller.
What You Can’t Ask Potential Tenants
What you can’t ask potential tenants is as equally important as what you can ask.
The Fair Housing Act prohibits discrimination in housing in these seven classes:
· National Origin
· Familial Status
Therefore, do not ask questions that drill applicants down to any of the seven areas.
Instead of asking what is your familial status, you can ask, how many adult occupants will be living in the residence? Do not ask the marital status of adult tenants. Don’t even try to cover your curiosity up with a friendly-sounding question, “How long have you been married?”
In some states, you can ask about nationality or citizenship, but you cannot ask an applicant their national origin (where they were born).
Do NOT ask the tenant applicant to identify their race, color, religion, or sex.
You may not ask the applicant if they are disabled, nor can you ask for medical records or history of impairment.
Final Words – Avoid Housing Discrimination
Let’s recap what we’ve covered!
Consistency is key. Ask the same questions when communicating with prospective tenants. Set your standards through legal written policies and stick to them.
Get familiar with the Fair Housing Act. Know exactly how individuals are protected from discrimination in all phases of housing, especially areas that apply to you as a landlord: advertising, rental, insurance, and accessibility.
Know your state and local fair housing requirements. Check out the Texas Fair Housing Act. Protect yourself in all areas of your landlord role, not just in the questions you ask. Food for thought: one of the prohibitions in the state of Texas is you cannot “Advertise housing to preferred groups of people only.”
When you do turn away potential tenants, ensure you state the exact reason for denial, based on fact and concise policy. Avoid using vague language, “You’re not the right fit.” Above all, this is business, ensure your verbiage and decisions are based on concrete business policies, not your personal feelings.
March forward in your landlord role, you’ve got this!
Tired of doing it all by yourself? Let Ambassador remove the constant wondering of legal matters and the stress of dealing with tenants and repairs.
Property owners need to know that Ambassador will go above and beyond to take care of your property and YOU! I cannot recommend these guys any higher!!! Integrity matters, and they have it! – Chris Glenn