Tenant screening
is a process used primarily by residential
landlords
and property managers to evaluate prospective tenants. The purpose of the tenant
screening process is to assess the likelihood the tenant will fulfill the terms
of the lease
or rental agreement. The process culminates in a
decision as to whether to approve the applicant, approve the applicant
conditionally (such as requiring an increased deposit or cosigner) or deny tenancy.
Title VIII of the
Civil Rights Act of 1968 (Fair Housing Act) prohibits discrimination in the
sale, rental and financing of dwellings based on race, color, religion, sex or
national origin. Title VIII was amended in 1988 (effective March 12, 1989) by
the Fair Housing Amendments Act, which expanded
coverage of the Fair Housing Act to prohibit discrimination based on disability
or familial status (presence of child under age the of 18, and pregnant women).
State
law often expands protections guaranteed under Title VIII. Washington law, for
example, prohibits discrimination based on marital status, sexual orientation
and domestic violence victim status.
Violating (or even being accused of violating) state or federal fair housing law
in your tenant screening process can be disastrous - in terms of the time and
expense associated with responding - as well penalties that may be assigned. So
it is important that there is nothing in your tenant screening process that is
(or ideally may be perceived as) discriminatory - that treats protected
individuals differently than others.
The
tenant screening process begins with the Application to Rent.
The Application
As a
rule, there should be nothing in the rental application that directly solicits
information regarding membership in a protected class. Asking an applicant
where they were born, for example, might elicit information regarding national
origin. Asking applicants and co-applicants whether they are married goes to
marital status. Similarly, charging married couples a lower application
(background screening) fee may run afoul of marital status or sexual orientation
protections.
Tenant Screening Report
Background checks (tenant screening reports) are a critical component of the
tenant screening process. There should be nothing in your screening reports
that associates the applicant with a protected class. Some tenant screening
companies will return "protection orders" granted to victims of domestic
violence as part of a civil records search. Bad idea - certainly in the State
of Washington (for example) where victims of domestic violence are specifically
protected under RCW 59.18.580. Records of arrest are a bad idea as well, since
it is well established that reliance on records of arrest has a disparate impact
on protected individuals.
Few
would dispute the business necessity of considering convictions for serious
offenses - but convincing a jury of the business necessity of considering
records of arrest (alone) will be much more difficult.
Considering minor (or unrelated) convictions, or convictions that occurred long
ago may also be problematic - in terms of the disparate impact discrimination
exposure. So it is advisable to limit your criminal search parameters to
convictions for specific (serious) offenses, the dates of final disposition is
more than 7 years old - a limit commonly found in state law.
The
bottom line is if you cannot use the information, you do not want it in your
file. If your tenant screening company returns information you cannot use, ask
them to stop.
Your Criteria
It is
important to craft and carefully follow criteria that does not discriminate -
directly or indirectly (under the disparate impact legal theory). Well-crafted
criteria applies thresholds to objective credit, public records, rental and
employment data to arrive at a decision whether to approve, approve
conditionally or deny tenancy.
Visit
MyScreeningReport.com®
or Moco
Incorporated for a free
Criteria Worksheet and other helpful tools for landlords.
The
good news in all of this is that a well crafted tenant screening process allows
you to carefully screen prospective tenants while minimizing the risk of a fair
housing claim.