There are a number of federal, state, and local laws that pertain to tenant screening and selection, and they can get confusing. The most important step for Orlando property owners to take is carefully planning a tenant screening process that covers all the legal requirements, then implementing that process and following it consistently. A well-documented tenant screening process and records demonstrating that you follow that process every time can be a powerful defense against a claim of discrimination from a prospective tenant. Since the U.S. Department of Housing and Urban Development (HUD) civil penalties for a Fair Housing Act (FHA) violation start at nearly $20,000 for a first-time offender, it’s an issue no property should ignore.
Make A Plan And Make It Public
Establish a fixed set of criteria you’ll use to judge each application. If you own more than one property, each property might have its own set of criteria, but you have to be consistent in applying the same set of criteria to every application for a given property. Your criteria can and should include things like a minimum credit score and income; standards for issues like bankruptcy or eviction (number or length of time since filing bankruptcy or being evicted, for example); criminal history, when allowed; length of prior tenancies and/or references from previous landlords; or length of employment. Be sure to include something like a decision tree for matters where you might accept a tenant, but only with a co-signer, extra deposit, or increased rent. These are called adverse actions, and you need to have established policies for when you will take these actions, and when you will simply reject the application.
Once you’ve established your selection criteria and verified that they are compliant with applicable laws, you can shortcut a lot of potential trouble by publishing your criteria on your website, or another outlet where prospective tenants can see them before they apply.
Be Consistent And Follow Through
Don’t be tempted to bend the rules for an applicant, no matter how much you may wish to. The value of establishing this process lies in being able to demonstrate 100% compliance with your own process. If you need to take an adverse reaction on an application, you’ll need to provide the applicant with a written explanation of the reasons. If you’re ever faced with a discrimination complaint, this documentation is your first and strongest line of defense.
Compliant, Defensible Tenant Screening In Orlando
Defending against a discrimination complaint can involve hefty legal fees on top of the civil penalties if you’re found to be in violation. The most effective way to prevent such costs is to create a tenant screening system that builds a defense as you go about your business. The Belmont Management Group helps Orlando property owners with all aspects of residential property management, including tenant screening. Call or contact us online for a free consultation.
Note: Please keep in mind that this is a general overview of the important points, but by no means does it constitute or cover all of the requirements of a compliant tenant screening program.