Buying and owning single-family rental properties can be a fun and satisfying investment. Unlike other types of investments, there are some considerations to remember to successfully go from a property owner to a landlord. Suppose you are a Fort Worth rental property owner who is gearing up to lease for the first time. Therefore, 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 put up a comprehensive guide to get you started on leasing your first property. If you follow these simple guidelines, your first experience can be a fantastic one.
Renter Screening Process
One of the first and most important steps in leasing your rental property is selecting an appropriate renter. And the best method to do so is to have a good tenant screening process for each applicant. You’ll need to collect information from your prospective renter, so you can pick whether they are the ones you’re searching for. At a minimum, you should urge them to fill out an application that includes all intended home occupants’ names and birth dates (such as those under 18), five years of employment history, and at least three past rental references. You should also obtain the Social Security numbers for all adult renters and conduct a background check on each one. Afterward, call and verify the information on their application. If feasible, communicate with any previous landlords and get details on their renting history. Even though it might take some time, the more research you do before you sign that lease, the less likely you will be surprised by something negative in the future.
As you advertise to and screen renters, it is advisable to prevent discriminating against potential renters, even inadvertently. Various federal laws make it unlawful 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 based on race, color, national origin, religion, sex, familial status, or disability. The FHA covers every component 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 required to make reasonable accommodations for those with disabilities. For example, they may ensure that there are accessible parking spaces or install grab bars in bathrooms.
- Age Discrimination in Employment Act (ADEA): The Age Discrimination in Employment Act (ADEA) is a federal law that prohibits discrimination against individuals 40 years of age or older. Although the ADEA is primarily meant to protect employees, it also prohibits discrimination in housing on the basis of 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.
It is critical to research state and local law in addition to federal law. There may be other protected classes depending on local regulations.
When writing your rental ads, avoid using language that could be perceived as discrimination. For instance, don’t indicate that you won’t rent to seniors or people with children or rent to those who live on government assistance. Then, as you take applications and screen renters, fairly assess your applicants based on the information they provide and not on other criteria. By maintaining professionalism and applying an unbiased screening system, you can prevent discriminating against any potential renters.
Understanding Reasonable Accommodations
Similarly, it is essential not to assume that someone with a disability is inherently an unsuitable candidate for your rental property. Under the Federal Fair Housing Act, Fort Worth property managers must provide “reasonable accommodations” for their renters if necessary. 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 deny them. The accommodation a renter requests would be paid for and installed by the renter, with the assumption that they will send back the property to its original condition upon move-out.
Other accommodations incorporate accepting service and emotional support animals in the rental property, even if you have a strong policy against pets. Service and emotional support animals are excluded by a rental pet policy. You may not demand additional rent or fees should a renter keep a service animal on the property.
It can be challenging to stay on top of all the laws and best practices for leasing rental properties. Why not work with a professional property manager to take care of this critical responsibility? At Real Property Management Meridian, we offer understandable and anti-discriminatory screening and leasing services to help our rental property owners locate the best possible renters. Contact us today or call us at 817-678-8787 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.