Purchasing and owning single-family rental properties can be an exciting and rewarding investment. Unlike other types of investments, there are a lot more details to learn to successfully go from a property owner to a landlord. Suppose you are a Blackfoot rental property owner getting ready to lease for the first time. To that end, it is crucial to fully understand the basics of leasing strategies and, even more importantly, the laws that now apply to you and your renter. We’ve assembled a comprehensive guide to get you started on leasing your first property. Obeying these simple guidelines can make your first experience a positive one.
Renter Screening Process
One of the first and most important steps in leasing your rental property is finding a reliable renter. And the way to achieve that is to have a good tenant screening process for each applicant. You’ll need to gather information from your prospective renter to help you choose whether they are the ones you’re seeking. At a minimum, encourage them to fill out an application that includes 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 get Social Security numbers for all adult renters and execute a background check per person. Then, call and verify the information on their application. Ideally, contact any previous landlords and get details on their renting history. It may take some time, but the more research you do before you sign that lease, the less likely you will encounter unfavorable surprises in the future.
Avoiding Discrimination
As you advertise to and screen renters, it’s imperative to avoid discriminating against potential renters, even by accident. Several 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 because of race, color, national origin, religion, sex, familial status, or disability. The FHA applies to all parts 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 demanded to make reasonable accommodations for persons with disabilities, such as providing accessible parking spaces or adding grab bars in bathrooms.
- Age Discrimination in Employment Act (ADEA): The Age Discrimination in Employment Act (ADEA) is a federal law that forbids discrimination against individuals 40 years of age or older. Although the ADEA is principally designed to protect employees, it also bans 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.
Together with federal law, it’s best 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 might qualify as discrimination, such as expressing 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, as you obtain applications and screen renters, fairly assess your applicants based on the information they provide and not on other criteria. By maintaining professionalism and using an unbiased screening system, you can stay clear of discriminating against any potential renters.
Understanding Reasonable Accommodations
Furthermore, 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, Blackfoot property managers are obligated to make “reasonable accommodations” for their renters, should they be required. 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 disapprove them. The accommodation a renter requests would be paid for and installed by the renter, with the agreement that they will restore 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 policy banning pets. Service and emotional support animals are excepted from a rental pet policy. You may not pay additional rent or fees should a renter keep a service animal on the property.
Knowing all the laws and best practices for leasing rental properties can be difficult. To avoid any potential missteps, you should hire a professional property manager. At Real Property Management Pocatello, we offer clear and anti-discriminatory screening and leasing services to help our rental property owners select the best possible renters. Contact us today or call us at 208-234-1000 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.