Purchasing and owning single-family rental properties can be an exciting and profitable investment. Unlike other types of investments, there are many things you need to know to successfully go from a property owner to a landlord. Suppose you are a Washington Township rental property owner and are arranging to lease for the first time. In such a case, it is important to fully understand the basics of leasing strategies and, even more importantly, the laws that now apply to you and your renter. We’ve compiled a comprehensive guide to get you started on leasing your first property. By following these guidelines, your first experience can be a successful one.
Renter Screening Process
One of the first and most critical responsibilities in leasing your rental property is locating the right renter. And the best way to accomplish this is to have a good tenant screening process for each applicant. You’ll need to acquire information from your prospective renter to establish whether they are the ones you’re on the hunt for. At a minimum, request that they fill out an application that incorporates all intended home occupants’ names and birth dates (together with those under 18), five years of employment history, and at least three past rental references. You’ll also want to collect Social Security numbers for all adult renters and run a background check on each person. Afterward, call and verify the information on their application. Preferably, phone any previous landlords and get details on their renting history. It may necessitate some time, but the more research you do before you sign that lease, the less likely you will be disappointed in the future.
As you advertise to and screen renters, you need to avoid discriminating against potential renters, even by accident. Many 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 by race, color, national origin, religion, sex, familial status, or disability. The FHA covers all aspects 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 are required to make reasonable accommodations for individuals with disabilities, such as offering accessible parking spaces or installing grab bars in bathrooms.
- Age Discrimination in Employment Act (ADEA): The Age Discrimination in Employment Act (ADEA) is a federal law that prohibits discrimination against individuals 40 years of age or older. Although the ADEA is mainly designed to protect employees, it also prohibits 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.
In addition to federal law, it’s advisable to research state and local law. There may be additional protected classes depending on local regulations.
As you prepare your rental ads, avoid using language that could qualify as discrimination, like indicating that you will not rent to seniors or people with children or that you won’t rent to those who live on government assistance. Then, when you collect applications and screen renters, fairly assess your applicants based on the information they provide and not on other criteria. By maintaining professionalism and applying an unbiased screening system, you can avoid discriminating against any potential renters.
Understanding Reasonable Accommodations
Likewise, it is important not to assume that someone with a disability is automatically not a good candidate for your rental property. Under the Federal Fair Housing Act, Washington Township property managers are required to provide “reasonable accommodations” for their renters if requested. 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 for rejection. The accommodation a renter requests would be paid for and installed by the renter, with the understanding that they will return the property to its original condition upon move-out.
Other accommodations include allowing service and emotional support animals in the rental property, even if you have a strict no-pets policy. Service and emotional support animals are excluded from a rental pet policy. You may not pay additional rent or fees if a renter keeps a service animal on the property.
Considering all of the laws and best practices for leasing rental properties can be complicated. Why not entrust this critical obligation to a professional property manager? At Real Property Management Silverstone, we offer transparent and anti-discriminatory screening and leasing services to help our rental property owners find the ideal renters. Contact us today or call us at 586-992-6419 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.