Being a landlord can be frustrating. There are some tenants who act surprised every time the rent is due. But while landlords often have good reasons to quibble with their tenants, the reverse is true as well. Sometimes, landlords do things that are downright illegal. They may not know it’s illegal, but ignorance of the law is no excuse for breaking it.
If you’re a landlord, you should have a real estate lawyer to guide you. Laws vary by city and state, but here are some general guidelines about what you can and can’t do legally.
Landlords can charge application fees
As a landlord, you can charge a fee for potential tenants during the application process. In most cases, though, there are limits on what the application fee can be used for. You cannot, for instance, collect $50 application fees from 100 people if you know that 80 of them aren’t serious candidates.
Remember that the fees must reflect the actual cost of screening. If it costs you money to run a tenant credit check, then you can charge for that. If it doesn’t cost you money, you’re better off not charging for it. In many cases, the more detailed a report is, the more you’ll have to pay for it. But that may not be true in every situation, so do your homework before deciding you have to charge $75 for every background check. It shouldn’t cost that much money to run a background check on someone unless they’re up for a job at the CIA.
It’s often bad form to charge people to fill out a basic application. Yes, you may have property in a hot rental market. There’s nothing wrong with charging market price for your property, but there is something wrong with giving people false hope. Someone who pays money for an application may think they’ve advanced past the initial round of screening. Be upfront about what paying a fee does or doesn’t guarantee someone.
Landlords can’t discriminate
Anyone who is even thinking of becoming a landlord should know the Fair Housing Act forwards and backwards. If it’s too hard to understand, talk to a local real estate attorney and get them to explain it to you in layman’s terms. Essentially, the Fair Housing Act makes it illegal for most landlords to discriminate based on specific protected classes.
If you refuse to rent to someone because of their skin color, that’s a violation. If you refuse to rent to someone because of their religious beliefs, that’s also a violation. However, gender identity and sexual orientation are trickier matters. The Human Rights Campaign says that 17 states prohibit housing discrimination on the basis of both sexual orientation and gender identity. Another four states prohibit on the basis of sexual orientation only.
To be clear, that doesn’t mean discriminating against someone for their gender identity is a good idea regardless of where you live. But legal consequences are more serious in some locations than in others. As of 2018, federal law offers no protections for gay or transgender tenants.
Landlords can’t refuse to make certain repairs
Being a landlord comes with certain obligations. Your tenants have the right to live in a home that’s safe and habitable. If something goes wrong, you’re expected to fix it. More urgent repairs, obviously, will need to be fixed soner.
To use an extreme example, let’s say your tenant in Apartment C gets home one day to find the ceiling in the shower fell through. That’s not a case where you can say, “I’ll try to send someone out there next week.” In that situation, you need to call emergency repair companies. You may also be obligated to put your tenant in a hotel for a few nights until their apartment is habitable again.