We hear about discrimination all the time; as much as we would like to pretend that it doesn’t exist, it’s something that plagues the world around us and the rental housing industry is not excluded. Some may think that simply screening applicants remove prejudices from their rental process, but discrimination can still find its way into the tenant screening process. By expanding your knowledge in this area, you can better avoid discriminatory practices in your tenant screening.
- The Fair Housing Act
The Fair Housing Act (FHA) that there are seven protected classes: race, color, religion, national origin, sex, disability, and familial status. You cannot discriminate against anyone based on these factors in any way, shape or form, or you could find yourself facing legal action. Questions on your application shouldn’t even touch these topics, even in a way like asking for a spouse’s name. Instead use vague information to get the information you may require, like inquiring about the number of adults that would be living on the property.
- Judge Everyone by the Same Criteria
It is imperative that you treat every applicant in the same regards. Have a written set of criteria that you hold every applicant to, and be sure not to stray from it. Holding every applicant to the same standards and judging them with the same criteria is important to avoid discrimination, and helps to evade claims that anyone was treated unfairly.
- Red Flag Ruling
A red flag ruling is an indication that there may be some form of identity theft taking place. The Federal Trade Commission mandates that anyone with access to credit information must have “reasonable policies and procedures for detecting, preventing, and mitigating identity theft” in place. Make sure that you have a procedure for verifying an applicant’s identity and supply a confirmed, accurate address for the credit bureau.
The National Consumer Assistance Program (NCAP) was implemented by the 3 major credit bureaus after deciding that some public record data didn’t meet minimum data standards. New standards were put in place, requiring minimum consumer identifying data of name, address, social security number and date of birth. It also required a minimum update frequency of courthouse visits to obtain newly filed and updated records to at least every 90 days.
- Adverse Action
When denying an applicant, it is required to send them a written notice informing them of the decision. An Adverse Action letter does just this, and provides the applicant with the reason behind the denial. These documents are good to retain as well, so that you have them in case someone accuses of discriminatory practices.
Simply screening all your applicants isn’t enough to claim that it is free of discrimination. By educating yourself and taking a few extra precautions, you can adhere to industry regulations and make your screening process as fair as possible. A little research can go a long way, and can save you a lot of trouble down the road.