Should You Meet Potential Tenants Before Making A Decision On Their Rental Application? | Nexus Property Management® Franchise

17 April 2024

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WITH DATA FROM THE APPLICATION IN HAND, WHAT MORE DO YOU NEED THAT IS WORTH THE RISK OF A DISCRIMINATION ACCUSATION?

Some property owners insist on meeting potential tenants before deciding whether or not they can rent their property. If landlords want to meet after they’ve already given their approval to place the tenants, that’s one thing; but to meet a prospective tenant and then after that meeting decide not to rent to them opens landlords up to accusations of discrimination. These days, with online assistance or by hiring a qualified property manager, it’s very easy to gather effective data through the application process so you can make an objective decision without risk of violating Fair Housing statutes.

FAIR HOUSING LAWS AND REGULATIONS

The Fair Housing Act was signed into law in 1968 to combat discriminatory practices across real estate. The law recognizes and extends protections to individuals of different race, color, nation of origin, religion, sex, familial status, or those with mental or physical disabilities. Additionally, many states have since added protected classes to their own books and it is important you’re aware of these in the states where you invest:

LEARN MORE: FAIR HOUSING: EQUAL OPPORTUNITY FOR ALL (H.U.D. BOOKLET)

WHY THAT TABLE MATTERS SO MUCH

The vast majority of people would consider themselves to be non-discriminatory, but all it takes is a conversation during a meeting with a prospective tenant in New Jersey where he or she reveals they’ll likely be sent overseas as part of a military assignment and you could be in trouble if you don’t rent to them, even if that wasn’t why you rejected them. When you converse and learn subjective information about a prospective tenant you inadvertently solicit information that could be used against you.

As Greg shares in the video above, early in his tenure as a leasing agent, an owner requested to meet with a potential tenant and Greg arranged it. Greg and the owner met with her and then the owner decided not to rent to the single mother of two and she filed a case with the H.U.D. (Housing and Urban Development) under familial status. When the Executive Branch of the Federal Government is looking into your actions as a landlord, it’s not a comfortable spot to be in. We recommend avoiding that.

LEARN MORE: PENALTIES FOR FAIR HOUSING VIOLATIONS

WHY THAT TABLE SHOULDN’T MATTER SO MUCH

There are a lot of categories in that table to trip up on inadvertently regardless of your intentions or biases. If you meet with an 80 year old on Social Security who thought they were going to get the apartment and were surprised to learn they didn’t, they could file with H.U.D. based on age and/or source of income in many states. Sure, you want to get a qualified person that you’re comfortable with into your rental unit, but there’s zero reason you need to meet someone in person these days to assess a tenant’s suitability and qualifications. REPEAT…THERE IS ZERO REASON TO MEET THEM IN PERSON IF YOU DON’T NEED TO!

Today, it is easy to have potential tenants complete online applications that include credit reports, legal reports, history of bankruptcy and foreclosures, credit card history, unpaid medical bills, and income. Those all contribute to hard data that allows you to make an informed decision without any doubt of legality. You want to make any business decisions as objectively as possible, and placing a tenant is no different. Avoid the perceived comfort that might come with a face-to-face and instead ensure that you have a strong application process and system for placing the most highly qualified tenants per the metrics and hard data.

LEARN MORE: THE IMPORTANCE OF TENANT SCREENING AND BACKGROUND CHECKS

WHAT’S THE BEST WAY TO ENSURE YOU HAVE A STRONG APPLICATION PROCESS???

The best way to ensure your application is perfected and to keep yourself as far away from the Federal Government as possible is to hire a reputable professional to help with your leasing. At Nexus Property Management®, we back our tenant placement and screening process with two tenant placement guarantees should tenants we place leave or ever be evicted. Yes, hiring a professional will help you avoid falling into a problem with Fair Housing Law, but even more importantly, and more obviously, it will help you find the right tenant for your property with confidence, which is your ultimate goal.

LEARN MORE: FIND A PROPERTY MANAGER WHO HAS YOUR BEST INTERESTS IN MIND…WHO MAKES MONEY WITH YOU, NOT FROM YOU!!!

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Mick Lefort is the General Manager of Nexus’ New Haven County Franchise Office and the Vice President of Operations for Nexus Property Management®, a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.

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