Investing and owning single-family rental properties can be a rewarding and exciting investment. Unlike other types of investments, there are numerous things you need to think about to successfully go from a property owner to a landlord. Suppose you are a Filer rental property owner who is about to lease for the first time. In that event, you must fully understand the basics of leasing strategies and, even more importantly, the laws that now apply to you and your renter. We’ve put together a comprehensive guide to get you started on leasing your first property. Implementing these straightforward guidelines can make your first experience a great one.
Renter Screening Process
One of the first and most critical moves in leasing your rental property is picking the perfect renter. And the right approach to do this is to have a good tenant screening process for each applicant. You’ll have to collect information from your prospective renter to assist you in determining whether they are the ones you’re waiting for. At a minimum, insist that they fill out an application that contains all intended home occupants’ names and birth dates (even those under 18), five years of employment history, and at least three past rental references. You’ll also need to acquire Social Security numbers for all adult renters and conduct a background check on them all. Then, call and verify the information on their application. If you can, call any previous landlords and get details on their renting history. It may take a few days, but the more research you need before you sign that lease, the less likely you are to encounter mishaps in the future.
As you advertise to and screen renters, avoiding discriminating against potential renters is vital, even if it’s accidental. Various federal laws make it illegal to discriminate against a renter based on race, sex, color, national origin, religion, handicap, and familial status. These laws include:
- Fair Housing Act (FHA): The Fair Housing Act (FHA) is a federal law that prohibits discrimination in housing due to race, color, national origin, religion, sex, familial status, or disability. The FHA supervises every aspect of the rental process, including advertising, tenant selection, and terms and conditions of tenancy.
- Americans with Disabilities Act (ADA): Also covered by FHA is a federal law that prohibits discrimination against individuals with disabilities. Landlords who own multi-unit buildings of 4 units or more must provide reasonable accommodations for people with disabilities, like placing accessible parking spaces or putting grab bars in bathrooms.
- Age Discrimination in Employment Act (ADEA): The Age Discrimination in Employment Act (ADEA) is a federal law restricting discrimination against individuals 40 years of age or older. Although the ADEA is primarily planned to protect employees, it also outlaws discrimination in housing based on age.
- Equal Credit Opportunity Act (ECOA): The Equal Credit Opportunity Act (ECOA) is a federal law prohibiting discrimination in credit transactions, including rental transactions. Under the ECOA, landlords may not discriminate against individuals based on their race, color, national origin, religion, sex, marital status, age, or because they receive public assistance.
Along with federal law, it is necessary to research state and local law. There may be other protected classes depending on local regulations.
As you compose your rental ads, avoid using language that could be considered discrimination, like declaring that you would not rent to seniors or people with children or that you won’t rent to those who live on government assistance. Next, as you accept applications and screen renters, fairly assess your applicants based on the information they provide and not on other criteria. By keeping professionalism and implementing an unbiased screening system, you can avoid discriminating against any potential renters.
Understanding Reasonable Accommodations
In the same way, it is essential not to assume that someone with a disability is automatically an undesirable candidate for your rental property. Under the Federal Fair Housing Act, Filer property managers are demanded to make “reasonable accommodations” for their renters if they are needed. By definition, a reasonable accommodation is “a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling.” If your prospective renter otherwise meets the criteria for renting your property, accommodation should not be a reason to reject them. The accommodation a renter requests would be paid for and installed by the renter, with the assumption that they will restore the property to its original condition upon move-out.
Other accommodations include accepting service and emotional support animals in the rental property, even if you have a strict no-pets policy. Service and emotional support animals are not included in a rental pet policy. You may not charge additional rent or fees if a renter has a service animal on the property.
Learning all of the laws and best practices for leasing rental properties take a lot of work. Why not give this significant task to a professional property manager? At Real Property Management Magic Valley, we offer transparent and anti-discriminatory screening and leasing services to help our rental property owners pick the most suitable renters. Contact us today or call us at 208-734-4001 to learn more.
Originally published on June 4, 2021
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.