6 Golden Rules for Rental Property Owners: How to Safeguard Your Property Without Upsetting Your Applicants (or Ending Up in Court)

Hello, dear rental property owners! Are you gearing up to submit that request? Exciting times! But before you hit the “submit” button with abandon, let’s make sure you’re not about to step into a legal quagmire or get on the bad side of your potential tenants. Here’s your unofficial, lighthearted guide to smooth sailing in the world of screening applicants.

1. Brush Up on Fair Housing Laws (A.K.A. How Not to Get Sued)

We get it – the ever-changing landscape of tenant screening laws can be a bit of a chore to keep up with. But unless you fancy seeing the inside of a courtroom more than your own living room, it’s time to do some homework. Brush up on federal and local Fair Housing Laws to ensure you’re not discriminating against any protected classes.

On the federal level, the Fair Housing Act outlines rights and obligations for rental property owners, as well as federally protected classes for discrimination enforced by the US Department of Housing and Urban Development (HUD). On the state level, however, each state has its own protected classes, often beyond that of the federal level. For example, California’s protections are oftentimes the strictest, and its list of protections is constantly changing. California State Bill 403 is an example of this, which seeks to add caste to the list of protections from discrimination. (For more information on certain rental property owner/tenant laws and proposed bills, visit the CIC blog homepage and view our regulation map).

Remember, refusing someone based on their pet iguana? Fair game. Refusing based on race, color, religion, etc.? Big no-no. Speaking of staying out of the courtroom…

2. Cross-Reference, Cross-Reference, Cross-Reference!

When it comes to background screening information on your applicant, you can never be too careful. Taking a magnifying glass to both your tenant screening report and comparing them to the application can not only save you from potential pitfalls – it can also ensure a positive and trustworthy experience for your potential applicant from the start. Good cross-referencing practices include:

  • Cross-referencing descriptors on sex offender registry records with the person who’s applying.
  • Cross-referencing that the spelling, date of birth information, social security number, and previous addresses are correct on the application and tenant screening report.
  • If they have a middle name, make sure that it’s included in the tenant screening report.
  • Communication can resolve most discrepancies. When in doubt, ask your applicant and consult your background screening data provider!

3. Accurate Advertising: No Tall Tales, Please!

Your property might be wonderful, but if it doesn’t come with a jacuzzi on the roof and a personal butler, don’t claim that it does. Exaggerating or providing misleading details can lead to legal issues and a host of disappointed applicants. There are also other required disclosures that can vary based on local-level advertising laws. For example, in Seattle, WA, a listing cannot advertise a ban on applicants with a criminal history, and this kind of required disclosures go beyond the listing itself. Remember, honesty is the best policy!

4. Accessibility Accommodations Matter!

Remember, accessibility accommodations are required if a reasonable accommodations request is made by the applicant, so on top of ensuring all safety equipment (such as smoke detectors) is in working order, be sure your property managers are ready to potentially accommodate these types of requests, including, but not limited to emotional support and service animals, installing ramps, changing assigned parking spaces, installing wheelchair handlebars, hearing impaired smoke detectors, etc. Your applicants will thank you.

5. Document, Document, Document! (Did We Mention Document?)

Imagine telling a story about the incredible vacation you just got home from, but not having any photos to prove it. That’s what it’s like dealing with property issues without documentation. Before you lease, advise your team and leasing agents to take photos of your property’s current condition, write down any existing damages, and re-read your policy manual for potential blind spots regarding damage documentation, renter complaints or violations, or accommodations that were requested or granted. Be sure to keep a record of all communications, as well. That way, if a tenant says, “The wall was already painted neon green when I moved in!”, then you’ll have the proof to say otherwise.

6. Transparency is Key: No Hidden Agenda (or Fees)

Imagine ordering a delightful ice cream sundae, only to find out they’ve charged you extra for the cherry on top. Ouch, right? Be clear about all costs from the get-go. Application fees, security deposits, monthly rents, maintenance fees – let it all be known. Some states and ordinances have instituted rent control, such as California’s SB-567, aimed at no-fault just causes terminations of tenancy based on rental rate increases. Every state also has its own rental property owner/tenant laws on the application fee cap, so be sure to be aware of yours. This way, applicants won’t feel like they’ve been hit by an unexpected financial whirlwind, and you won’t come under fire for not being upfront about the costs.

In conclusion, being a rental property owner isn’t just about collecting rent and ensuring the grass is cut. It’s about building trust, fostering good relationships, and of course, staying clear of any pesky legal troubles. Remember, happy tenants often equate to happy property owners and managers, so keep the peace, stay informed, and spread the rental love. Now, off you go! May your rental property ownership journey be smooth, legal-trouble-free, and full of wonderful tenants who appreciate your newfound wisdom.

This page is made available by Contemporary Information Corp. (CIC) for informational purposes only. It is not meant to convey CIC’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed on this page do not necessarily reflect the views of CIC, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. The information on this page is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. CIC makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. CIC expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall CIC or any of its partners, employees, or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

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