Real Estate Articles

Listener Q&A: I’m Being Threatened with a Fair Housing Suit! | By: Multiple Speaker(s)

Upcoming Events with: Multiple Speaker(s):
Listener Q&A: I’m Being Threatened with a Fair Housing Suit!
Q: I recently rejected a tenant because her previous landlord told me that she had people in the house at all hours of the day and night and he was constantly getting complaints from the neighbors. When I told the applicant she couldn’t have the unit, she threatened to sue me for discriminating against her because she had 5 kids. Am I in danger, and what should I have done? P.S., Seattle, Washington

A: I’ve seen an unfortunate trend in applicants threatening to file discrimination suits against landlords who refuse their applications. It’s unfortunate both because these applicants are abusing the laws put in place to protect them, and because landlords are running scared from women, minorities, and people with children. However, the fact that someone threatens you with a suit or complaint doesn’t mean they will, and the fact that they do file doesn’t mean they’ll win.
The key here is to have clear criteria for renting (or selling) to an applicant, and then sticking to them. These criteria should be objective, easy to quantify, and unrelated to the applicant’s membership (or non-membership) in a protected class. You should use criteria that you have found to be good predictors of the tenant’s ability to fulfill the requirements of the lease—that is, paying the rent on time every month and keeping the unit in good condition. The criteria don’t need to count equally; you can choose to give some more weight than others.
Examples of criteria that I’ve seen used include: whether the applicant earns at least 3x (or in some cases, 4x) the amount of the rent or rent plus utilities; whether the applicant has ever been evicted; whether the applicant has any unpaid judgments; whether the applicant has a dog; how long the applicant has been on the job; how many places of residence the applicant has had in the last 2 years; and whether the applicant lied about rental history, employment or income. These are all fairly safe criteria, because they can be independently verified through sources like courthouse records, credit services, and so on.
Slightly dicier are criteria that depend on opinion, such as reports by previous landlords. I ask previous landlords 4 simple yes/no questions: “did they pay $xxx in rent?” (based on what the applicant has told me), “were they always on time with rent payments?”, “did they leave the unit in good condition?” and “would you rent to them again?” (Note: if a former landlord is too effusive in his praise for an ex-tenant, be sure to check the tax rolls to make sure he’s actually the owner of the property).
You can select any criteria you like, as long as it is not discriminatory. For instance, one landlord I know will not rent to smokers. Another refuses any applicant who is a lawyer, a paralegal, or a law or paralegal student (she fended off one too many nuisance suits from tenants who didn’t want to pay rent).
Whatever your criteria, it’s crucial that they be in writing, that they be applied equally to all applicants, and that rejected (and accepted) applications be KEPT ON FILE for at least 5 years with the details of why the application was disposed of in the way that it was. Furthermore, you should be certain that you investigate each applicant to the same extent (and may I suggest this be to the nth degree), and not go further in digging up dirt on one applicant vs. another.
Assuming that you did not discriminate, most fair housing suits will go away when testers find that you treat everyone equally and when your written records back you up. So write down your reasons for rejecting this one, put together some criteria for the next one, call your local fair housing agency for additional advice, and don’t be cowed by ignorant people who try to use the law as a bludgeon .

Contact Us

Akron Canton Real Estate Investors Association, Inc.

P.O. Box 176
Kent, OH 44240
(330) 858-0456

Proud Affiliate Member of Think Realty

Follow Us

Privacy and Security Policies

Your email will never be shared or sold to other members, vendors or any other third party without your consent.

Disclaimer  (Akron Canton Real Estate Investors Association, Inc.) does not give legal, tax, economic, or investment advice. ACREIA disclaims all liability for the action or inaction taken or not taken as a result of communications from or to its members, officers, directors, employees and contractors. Each person should consult their own counsel, accountant and other advisors as to legal, tax, economic, investment, and related matters concerning Real Estate and other investments.   

Copyright 2023 © Akron Canton Real Estate Investors Association, Inc.  All rights reserved.

This REIA Website is powered by: Real Estate Promo.