Can Landlords Choose Their Tenants?

12 May Can Landlords Choose Their Tenants?

Great news! Your Niceville Florida rental property is in high demand! It may be because you listed your property online, invested in some upgrades, or simply because your rental property is located in a highly sought-after area. As a landlord, receiving multiple applications is a desirable situation. However, it is important to exercise caution when evaluating multiple applications.  

Is it legal for a landlord to choose who they rent their property to? 

In Florida landlords have the right to choose the most qualified applicant for their rental property, as long as their decision is based on legitimate business reasons such as the applicant’s sufficient income or credit score. However, the decision should also be compliant with fair housing laws. The Fair Housing Act prohibits discrimination based on race, color, religion, sex, ethnic background, familial status, or disability. Additionally, some local laws also prohibit discrimination based on source of income, sexual orientation, marital status, or age. It is important to familiarize yourself with federal and state laws to ensure you are in compliance with them. 

Florida landlords cannot discriminate based on protected categories according to the Fair Housing Act. Some examples of discriminatory behavior in the context of renting or leasing a property include the following actions:

• Terminating a tenancy based on discriminatory reasons.
• Refusing to provide reasonable accommodations for tenants with disabilities and/or service animals.
• Falsely claiming that a unit is unavailable to certain applicants.
• Refusing to rent or show the property to individuals belonging to a protected class.
• Applying more restrictive screening standards for certain applicants, such as requiring a higher income.
• Setting different terms for certain tenants, such as having an inconsistent policy for handling late rent payments or fees.
• Advertising that indicates a preference based on group characteristics like skin color.

Florida landlords have the right to accept or reject applicants based on business reasons. To determine if a prospective tenant is reliable and can pay rent on time, landlords can screen them by running credit and background checks, requesting proof of income, and contacting references. All of these screening methods are legal. If a prospective tenant fails to meet the screening criteria, landlords can legally deny their application. For instance, if they have a history of late payments, have caused serious property damage at their previous residences, or have been evicted before, the landlord can reject their application.

Be Aware of Legal Restrictions When it Comes to Rental Applications

Florida landlords have the legal right to decline rental applications based on bad rental history, poor credit, smoking, or pet ownership. Smoking is considered a lifestyle choice and is not covered under the Federal Housing Act (FHA), so landlords can prohibit smoking on their property. If a landlord chooses to do so, an addendum can be added to the lease to inform tenants that smoking is not allowed. Similarly, landlords can refuse rental applications from prospective tenants with pets, except for service animals. Service animals are not considered pets under the FHA and landlords are legally required to provide reasonable accommodations for tenants with service animals. Tenants with service animals are exempt from pet rules and any related fees, such as pet rent and pet deposits.

Landlords need to be aware of legal considerations when selecting tenants. Even if you don’t intend to discriminate, accepting applications out of order, using inconsistent policies or lacking proper documentation can give the impression of housing discrimination. If a tenant feels discriminated against, they can file a fair housing complaint and take legal action, which can be expensive to defend against. Therefore, it is important to have a clear process for choosing tenants that complies with fair housing laws. 

Review Applications in Received Order

It is not illegal to accept rental applications out of order, but it is generally recommended for landlords to follow a first-come, first-served policy. This means that landlords should accept and deny applicants in the order they receive them and select the first qualified applicant. Choosing tenants in a non-chronological order may give the appearance of discrimination and could result in a rejected tenant filing a claim. To avoid this, landlords often use a first-come, first-served policy to minimize the risk of discrimination claims. 

It is advisable to have back-up applications ready in case the first applicant withdraws or if negative information is discovered during their background or credit check. To stay organized and save time, consider setting a limit to the number of back-up applications you keep on file. You should also wait until it is time for the next application to be reviewed before running credit and background checks. It is important to be transparent with potential tenants and let them know that someone has already applied for the unit, but they are next in line to be considered. This helps prevent any suspicion of discrimination or the feeling of being brushed off. Being open and honest will help you maintain a positive reputation. 

When selecting tenants landlords may use a ranking system based on legitimate business criteria, such as a solid rental history and a high credit score. However, the ranking system must be the same for all applicants and cannot discriminate against any protected group under the Fair Housing Act (FHA). For example, it is not legal to rank applicants based on their source of income. If two applicants are equally qualified, landlords should choose the one who applied first. This is the best practice.  

It is important to avoid making promises to applicants about their chances of renting the property, regardless of the method you choose. Giving potential tenants false hope may result in legal problems, if the applicant relies on your word and rejects other available rentals or gives their current landlords a notice of non-renewal letter.  

Make Sure to Document Your Process

It is important to have proper documentation in order to avoid a discrimination claim. Having the right documentation can also help you defend yourself in court against a fair housing accusation. When reviewing applications, make sure to have an FHA-compliant list of criteria. Using a written list will help ensure that selection standards are applied equally and will also help you to narrow down the pool of potential tenants to find the best fit.

It’s important to document the reasons why you chose a particular tenant over others whenever you accept a new tenant. This will help protect you from potential lawsuits. When you ask for references from previous landlords, make sure to take note of the day you called them and their responses to your questions. For instance, if a previous landlord mentions that an applicant had several late payments, noise complaints, or caused significant property damage, it is crucial to write down this information.

When you reject a rental application, it is important to send a letter or email to the applicant explaining why they were denied and the specific criteria used to make that decision. If the reason for denial is negative information on the applicant’s credit report, the letter must include a disclosure of this information due to the Fair Credit Reporting Act. It should also include the name and address of the agency that provided the report, and inform the applicant of their right to request a free copy of the report within 60 days. Regardless of the reason for rejection, it is advisable to have an attorney review the letter to ensure all necessary information is included. 

Consistency is Key

Consistency is key when it comes to meeting fair housing compliance. It’s important to choose one selection method and stick to it. This way, you can ensure that you’re not violating any fair housing laws. Moreover, using the same policies will enable you to refer back to your documentation and prove that you’ve always been fair and consistent. This can come in handy if an applicant questions a rejection or files a discrimination claim. 

Don’t want to deal with the legal stress of choosing a tenant? Let Sound Choice Real Estate handle it!

If you’d like some help from our team of professionals at Sound Choice Real Estate please Click Here or give us a call at 850-389-8533 to Contact Us.

Sound Choice offers full-service property management in Niceville, Destin, Crestview, Fort Walton Beach and the surrounding areas. We are dedicated to providing a maximum return on your investment and eliminating hassle and stress.