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We have one potential applicant who said they will have their company rent the house for them. I am not sure it is the good idea. Would it complicate later to evict when their company cannot make payment and they are the ones who established residency? I am thinking to have them as primary applicant and their company as cosigner. I still not sure how to check their company credit worthiness.
I wouldn't touch this one at all. They are doing this so that if something happens, you can't sue them personally, and as a business, they have limited liability. This would be a big red flag for me.
Here is what I get from Texas Gov site. Is that mean, you can get exemption from Fair Housing Act just by listing without a broker? We listed it using flat fee mls listing. I am not sure how this will be considered. Maybe it means without broker on both sides.
The Texas Fair Housing Act covers most housing. In some circumstances, the law exempts owner-occupied buildings with no more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. Also, housing developments that qualify as housing for persons age 55 or older may be exempt from the provisions barring discrimination on the basis of familial status.
If you listed it on the MLS, you're engaging in the uses of a broker in order to rent the house, since you'll be getting applicants represented by a broker.
I wouldn't touch this one at all. They are doing this so that if something happens, you can't sue them personally, and as a business, they have limited liability. This would be a big red flag for me.
It depends. Is it a legitimate, functioning business or simply an LLC functioning as an alter ego? If it's the former, it is probably a safe bet provided you do your homework.
- It would not be any more difficult to terminate the lease and/or evict a company than it would be an individual person.
- If the business leases the property from you, your recourse against the individuals would be limited but you would have recourse against the business instead. Depending on the laws in your area this could actually be to your advantage.
I was approached once to use one of my apartments as a corporate apartment, for a company that hires temporary traveling nurses. I talked it over with the owner, and we decided not to do this.
I only want to contract with the person who resides in the apt. Your only real leverage is the ability to evict someone. I don't want to rent to a company, who can then put whoever they want in the unit.
The sneaky, yet legal way, around the fair housing laws in your case, would be if there was anything you could deny the family on. Is their credit bad? Can you find any lie on their application? When you run their credit check, did they list the correct former addresses?
I would get a copy of their driver's license, so I could see the address on it. I would also require a personal check for the application fee, so I could see the address on that. Then, I compare these addresses to the addresses they listed on their application, and what shows up on their credit report.
I swear, 9 times out of 10, an applicant will not be forthright about their former addresses. If you find ANY lie on their application, you can deny them.
If they are rude, you can deny them - you don't want to deal with rude people. If they argue in front of you, you can deny them - because you're afraid of them being noisy. If they smoke, you can deny them. If you see them smoking out at their cars, or smell pot on them, you can deny them.
People who lie, have bad credit, criminal histories, are rude, or are loud arguers, or smoke, etc., are not protected classes. If they don't have good landlord references, who aren't relatives, they can be denied. You can require good landlord references for their past two addresses, etc., etc.
All you need to know, is you can't deny them based on the few protected classes that there are. You can't deny them, just because they have children. But, you can deny them if those children destroyed your flower beds while you were talking to the parents.
I once denied a student applicant because he was an opera student, and he couldn't promise me he wouldn't practice in his apartment. Opera singers are not a protected class.
What you need to have in place, is a written formula for how you choose a tenant, if anyone were to report you to fair housing. As long as it's based on choosing/denying based on anything other than the protected classes, you're good.
You can deny familes with children, if they have bad credit. Being a protected class does not mean a free ride. So, look for legal reasons to deny them. If you can't find one, and they were first in line, you should take them.
Unless you have some local law that says the fair housing laws don't apply to you.
I believe the answer varies depending on the state you are located in and how many properties you own.
Incorrect. Fair Housing laws are federal. One of the few exemptions is if the owner owns a 4 unit or less property, and lives in the property themselves. Another is an owner desiring a roommate that will share a bathroom (you can specify male or female). There are other exemptions that deal with properties owned by other than an individual.
Hi. I have a few questions. I am expecting to get a few applications on our house renting for $2900/month and need some help to make up the decision.
My first question is that can I favor one applicant over another based on their family status. We are renting a house with pool and really don't want family with small kids due to liability. Let's say I get two applications, can I choose to proceed (check background etc) with the one we favor first or do we have to run in the order we receive the applications. Of course I would refund the application fee on second one if we ended up renting to our first choice applicant. I am not sure if it would violate fair housing laws. Also we just have this one rental property, does fair housing laws apply to individual renter like us?
Second question is about credit worthiness of the applicant. I am thinking to reject anyone below 650 unless they have substantial income. Do I need to tell the applicant not to apply if they have less than 650? Also I am thinking of requiring applicant or applicants combined income 3 times the rent. It may be stronger than credit score?
We have one potential applicant who said they will have their company rent the house for them. I am not sure it is the good idea. Would it complicate later to evict when their company cannot make payment and they are the ones who established residency? I am thinking to have them as primary applicant and their company as cosigner. I still not sure how to check their company credit worthiness.
First of all, become aware of the law as it applies to you. It is your responsibility to understand it.
No, you cannot discriminate based on familial status. Really big lawsuit there.
Be sure that your property complies with codes pertaining to fences around pools. I'm sure you already have that in place.
Plenty of families with children live in homes with pools.
On our properties with pools or spas, we have a disclaimer that basically states "the tenant is aware of the inherent risk of a water feature, and accepts all personal liability regarding such".
Take the best credit score over any other criteria. These are people who pay their bills on time. Yes, I know there are exceptions but it's impossible to know who will pay their rent before they buy groceries, and who will not.
Yes, require 3 times the rent in gross income. Require VERIFIABLE proof of income. If they're working for cash on the side and don't pay their taxes, you could be the next one they cheat.
You are not able to run their credit but there are options. While we never accept a credit report obtained by an applicant, you could have them bring you a recent (as in today) credit report. 2 that I know of that are free, annual credit report . com, and credit karma. It's possible there is an agency that would provide this service for you, but I'm not familiar with any.
Decide on your policies, and apply them equally to every applicant. First qualified applicant is your safest bet. Don't get chatty or friendly; remember this is a business transaction. Treat it as so at all times.
Be sure to notify your insurance company that the property is no longer occupied by you, and is a rental now.
I don't know if it is legal or not but I have seen ads that say you need at least x credit score. I also have seen the ad state you need pay stubs, credit report, references, etc.
If you think you are going to get a few applications how would any of the tenants know that you did not pick them because of being a family? I would think though if this is a large home you may get more families apply.
One more question - will i violate Fair Housing Laws if I set limit on how many people can live in a house. The house is four bedroom, 1 extra room that can be made bedroom. However it has only 2 and half bath. Can I limit to families larger than 5, 6? Where is the line that you can make legal argument that the house is not built to service such big families?
By the way, thanks for all the replies. I am learning a lot from all your posts.
If I rent a family with dog, is it good idea to meet the dog in person before signing off?
One more question - will i violate Fair Housing Laws if I set limit on how many people can live in a house. The house is four bedroom, 1 extra room that can be made bedroom. However it has only 2 and half bath. Can I limit to families larger than 5, 6? Where is the line that you can make legal argument that the house is not built to service such big families?
By the way, thanks for all the replies. I am learning a lot from all your posts.
If I rent a family with dog, is it good idea to meet the dog in person before signing off?
Under the federal Fair Housing Act, landlords are permitted to adopt reasonable occupancy standards as long as these policies do not discriminate against families with children. FHEO will generally consider an occupancy limit of two persons per bedroom to be reasonable. Limits which comply with state or local occupancy requirements are also generally considered to be reasonable.
Under no circumstances should occupancy limits be based on the age or gender of family members (except that an infant might not be considered to violate occupancy standards). For example, a landlord could limit occupancy of a two-bedroom unit to four persons. It would violate the FHA to require a mother with three sons to rent a three-bedroom unit. Only the total number of occupants can be limited.
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