How Choosy Can I Be About Prospective Tenants?
Hi, we are newby's and are looking for our first multi-family to purchase in Florida. I want it to be a really nice place to live. I can afford a few vacancies. I know I cannot legally (and don't want to) discriminate on the basis of race or national origin.
Can I discriminate on the basis of criminal history? I'd rather burn the place down than rent to a convicted pedophile, for example.
Can I advertise for people with a degree or classic car enthusiasts? Or people who belong to the same Club or sport?
It seems renters would be happier if they felt connected to their neighbors.
I look forward to your replies.
Linda
Linda,
You can not discriminate, period.
You can pick and choose who you want to put into your property. End of story. Just do a through background check on your prospective tenants and pick the best one. YOU Decide who you want, but you do NOT have to divulge your personal criteria.
In other words, do what you want, just be able to give a reason you picked A over B which holds up to the light of day.
BTW you can say I "Liked them better".
Thanks for the reply. Linda
These days even cities & counties have their own L/T laws & ordinances...so I'd advise you to talk to a prop. mgmt co. in your county/city in FL so as to get current on what all laws, ordinances, etc. you have to obey there.
My son has a quad-plex and basically as long as they pass the criminal background and credit check, and he can verify employment, they're in. I would think owners could or should be able to discriminate against someone with a criminal background, seeing as owners can be held responsible for their tenant's criminal activities -- even to the point of losing a house.
Anyway, the law basically states that you cannot discriminate on the basis of race, sex, age, handicap, familial status, national origin, and religion.
The following are covered under fair housing laws:
1. Any housing publicly owned
2. Any privately owned housing with a broker involved
3. Any individual owning single family housing who:
a. owns more than 3 houses
b. sells more than 1 house in a 2 year
period when owner was not the occupant
c.Does not use a broker
4. Multi-family housing
a. Housing having 5 or more dwellings
b. Housing having 4 or less dwelling units and the owner does not live in one of them
5. Exceptions to fair housing law
a. An individual owning 3 or less single family houses can offer them for sale or rent without being subject to the law if he or she:
--does not hire a broker
--does not use discriminatory advertising
--not more than 1 house is sold in a 2-year period when the owner was not the last occupant of the house
--is renting a room or united in owner occupied mult-family dwelling of 2-4 families
--religious groups offering houses if membership in the religion is not discriminatory
--private club offering housing but not operated commercially
There is a civil penalty of $10,000 for violating any of the above. It's $25,000 for the 2nd offense within a 5-year period; and $50,000 for two or more offenses within a 7-year period.
More than you wanted to know? If not, check the HUD site under Fair Housing.
I disagree with telemon (sorry).
You may not discriminate against the 7 protected classes (race, sex, age, handicap, familial status, national origin, and religion.
You can, however, discriminate all you want against ANYTHING else (although is you do so blatantly you could get you sued).
You MAY discriminate against:
Pet owners
Income (they don’t make enough money)
Alcoholics
Smokers
Criminals
Poor credit
People who have filed bankruptcy
People who have ugly cars
You don't like their sign (Ares, Gemini, Leo, etc)
They wear a toupee
They wear bell bottoms
etc.
I’d be careful against subjectively discriminating (they’re ugly, you don’t like them, they smell, etc), but objective discrimination would hold up if you’re true to your policies.
Granted, I'd be careful and keep records of why you did NOT allow someone to live there who doesn't meet your qualifications, but IS a protected class (e.g. Handicap person with a criminal record).
Lastly, you must be consistent. Go ahead and discriminate against bell-bottom wearing folks, but be consistent. Even if they've got great credit, 100K income, and 50K in the bank...if they're wearing bell bottoms (and that's against your policy) they can't stay there.
I strongly encourage you to selectively and carefully choose your tenants. Those that you like, and would like to have as tenants, encourage them to give you an earnest money deposit or a down payment to secure their spot. Those that you’re not fond of, tell them that you’ll let them know within 3 weeks. Tell them you raise the rent aggressively. There are things you can do to sway people.
I’m a firm believe that there are good tenants of every socio-economic class, race, religion, etc. I believe just as strongly that there are bad tenant of each as well. You must discriminate, but do so legally, fairly, and ethically.
[ Edited by hibby76 on Date 12/19/2003 ]
Research some companies that provide background checks. They have quite a bit of information for landlords on what you can/can't ask or discriminate on.
Further, talk to your local police department. Here they do presentations for landlords as to their responsibility to know who is renting in the complex, and how to prevent crime in their housing.
Just like in hiring, you've got to be consistent in your standard of who you choose to rent to. There are the seven protected classes, but that's about it. But if you're inconsistent, then you leave yourself open to lawsuits for different claims.
Lastly, don't tell people why their rental application was rejected other than "they just didn't pass."
Beyond the 7 protected classes under federal laws, each state may also have their own protected classes and so you have to check that out too. For example, in Wisconsin, we have 11 protected classes, not just the 7. We also have other laws that are stricter than the federal guidelines. It use to be in Wisconsin that if the owner personally lived in one of the units he could discriminate. That is no longer the case. Even if you live in the lower unit you can't discriminate. So, check your STATE codes, not only the federal. Be careful in this area.