What are some legal reasons to reject a potential tenant?

Finding great tenants can some times be very challenging,
especially with apartment vacancies reaching record highs.  But just because Depression 2.0 is making leasing difficult, it does not mean that we, as property managers do not have a fiduciary duty to protect our clients from dead-beat and/or
potentially dangerous tenants. We must, however, keep in mind that when we do decide to eliminate prospects that we
take care not to violate the Fair Housing Act.  For anyone not familiar with this Act, here
is a quick snapshot.

What is prohibited in
the sale and rental of Fair Housing?

No one may take any of the following actions based on race,
color, national origin, religion, sex, familial status, or handicap
(disability):

a)      Refuse
to rent or sell housing

b)      Refuse
to negotiate for housing

c)      Make
housing unavailable

d)      Deny
a dwelling

e)      Set
different terms, conditions, or privileges for sale or rental of a dwelling

f)       
Provide different housing services or facilities

g)      Falsely
deny that housing is available for inspection, sale or rental

h)      For
profit, persuade owners to sell or rent (blockbusting)

i)       
Deny anyone access to or membership in a facility or
service (such as multiple listing service) related to the sale or rental of
housing.

 

The Fair Housing Act is setup in an effort to help deter
Landlord discrimination against prospects on a personal level.  If a prospect is going to be rejected from
renting space at your place, it has to be because that person could adversely affect
your profit and/or safety as a landlord

 

This entry was posted in Asset Management, Fair Housing Act, Multifamily investment, Property Management, Prospective Tenants and tagged , , . Bookmark the permalink.
  • Big Mook

    If I use all those reasons, my property is going to be vacant for another year!

  • http://profile.typepad.com/1242598695s2226 First Light Property Management

    Very good point, Big Mook – Leasing is most certainly one of the more difficult challenges our industry faces in this economy. The list above is just a quick set of reasons that an Owner or a Property Manager could use if faced with the need to expunge a prospect. In our experience, we have found it much more beneficial for our clients to remedy problems on the front end instead of later down the road. Thanks for the post. -TH

  • Gary Steuernagel

    Whether we’re in a good or bad economy the rules are the same. The reasons that we are allowed to reject an applicant are ones tha we CAN use but don’t have to. We don’t have to consider those items or we may put more weight on any one of them ove the others, but if we choose to reject an applicant on any one of these we are safe as long as we can show that we hold all other applicants to the same standard.