For the future of your park and for the sake of your other tenants, you’ll no doubt be concerned with the kind of new tenants you rent to. You could also be thinking that you have the absolute last say when it comes to choosing your tenants. Unfortunately, that’s not the case. Proceeding in that direction can land you in deep trouble. Lucky for you, we are here to show you when you can and cannot refuse a prospective tenant. We’ll walk you through the process for screening applicants and what the law has to say about it.
Legal reasons to refuse tenancy
Let’s start with the legal and fair reasons why you could refuse tenancy to someone. A very important thing to remember about these reasons is that they are only legal and valid if they are pre-established and reasonable. In other words, you can’t suddenly apply them to a tenant without applying them to every single prospective (or current) tenant.
That also means that you must apply the exact same screening process to every new tenant:
- Credit history: Credit history is still one of the benchmarks against which the ability (and willingness) of someone to repay money they lend or to make future payments are based on. This makes refusing a tenant with a bad credit history legal basis for discrimination.
- Income: If a tenant doesn’t get paid enough to pay rent, they can’t pay rent. As simple as that. The U.S. government recommends citizens don’t spend more than 30% of their income on housing needs. If your rent is more than this, you can refuse tenancy.
- History of nonpayment of rent: If someone has refused to pay rent before, what’s to stop them doing so again?
- Prior bankruptcies: Again, the presence of prior bankruptcies is a stain on the person’s history that doesn’t look good for their ability to keep paying rent.
- References: Bad experiences from previous landlords could provide grounds for refusing tenancy.
- Criminal convictions
- Pets
Illegal forms of discriminating against a prospective tenant
You might wonder why it is illegal for you to refuse tenancy in some cases.
Just imagine that every landlord refuses someone that has the money and an acceptable reputation based on a single characteristic. That would leave someone that has the money to pay for his or her housing effectively homeless. The law is usually put in place to stop extreme situations such as these from ever occurring.
The Fair Housing Act along with the Fair Housing Amendment Acts (42 U.S. Code 3601-3619,3631) lays out in which cases discrimination is fair and legal or not. You should refer to these documents for more information as well as to understand the legal definition of certain terms.
Here are some of the cases where discrimination is illegal:
- Refusing tenancy to someone based on their race, color of skin, national origin, religion, physical or mental disability or handicap, sex or familial status.
- Refusing tenancy of a specific unit or property or steering a tenant to a specific area or property based on their race.
- Placing unreasonable restrictions on the number of people that can live in a certain unit or property. However, if the property is so small that it would affect the safety or dignity of a certain number of people, it could be legal grounds for refusing tenancy.
- When a landlord lists preferences or limitations in the advertisement of the property.
- Measuring different tenants against different standards. Especially if the tenants are treated differently based on race or the other illegal factors.
- Making certain amenities or services only available to certain tenants. On the other hand, if these services are tied to the amount tenants pay (i.e. paid-for services) it is usually legal.
- Expecting or implying any type of sexual favor in order to be granted tenancy.
- Refusing to make reasonable adjustments for disabled tenants to be able to stay on the property. This means that you must make accommodations to disabled tenants out of your own pocket. For example, installing a ramp for someone in a wheelchair in some areas.
These are the minimum requirements based on federal law. Your state or local authorities can enforce even stricter requirements so it’s important that you check with them to make sure you don’t land in hot water.
Discriminating against an applicant
If a tenant believes that you discriminated against them based on illegal reasons they can sue you for damages, damages for emotional distress, punitive damages as well as the cost of legal fees. They can sue you regardless of whether or not a complaint was made with HUD but it has to be made within 2 years since the alleged incident.
Screening process to select a good tenant
So, now that you know the legal and illegal reasons that you can use to choose a tenant, how do you actually go about selecting a good or fitting tenant? That’s what we will cover next:
1. Check their financial ability
- Income: You should ask the tenant for copies of pay stubs.
- Run a credit check: You can pay an agency to run a credit check on a prospective tenant.
2. Criminal background check
Criminal records are provided publicly for just this type of occasion. It’s important to note that you can’t just issue a blanket prohibition on anyone with any type of criminal record. You need to write up specific reasons why certain criminal convictions will be refused tenancy.
There are multiple state, county, and federal databases you should check if you want to be thorough. Here is a good guide for completing a criminal background check.
3. Previous rental history
You are well within your right to ask a tenant where they previously rented. Feel free to contact the landlords of these properties to ask about their experience with the tenant.
You should check whether the tenant paid their rent on time, if they left on good terms (i.e. not because of a problem or without giving proper notice), whether they abused the property, etc.
4. Choose a stable tenant
By asking a bit more about their history and after doing the previous three checks, you should be able to ascertain how stable or reliable a tenant is.
5. Number of people per unit/property
This law depends largely on what is considered reasonable. However, the Fair Housing Act states you can enforce a two-people-per-bedroom rule. You should follow local building safety codes.
Make the right prospective tenant your next tenant!
Well, that’s it! Follow these guidelines and you should be able to keep yourself out of trouble, especially the legal kind. You’ll also be able to keep the tenants you have in your mobile home park. And you’ll be able to determine if a prospective tenant will be a loyal, decent, and reliable future tenant.
About Dan Leighton
