We’re speaking with attorney Janet Portman, an expert on landlord tenant law and the author of, “Every Landlord’s Guide to Finding Great Tenants.”
NOLO: Janet, your book is geared to finding and screening great tenants. But what about a landlord who has just purchased your book, and already has tenants in the building? Can a landlord go back now and run a screening effort on existing tenants?
JANET PORTMAN: Great question, and the answer is no. Here’s why: in order to request a credit report, a first level screening tool, you have to have a valid business reason. But if you’ve already rented to someone, especially someone with a lease, you don’t have that reason anymore. If you want to check criminal background, a second level screening tool, you need your tenant’s permission, but existing tenants aren’t likely to play along. The most you can hope for with your building full of tenants is that the prior owner did some minimal screening, and that the bad apples are either near the end of their lease, or are renting on a month-to-month basis. You can terminate their rental agreements with requisite notice – usually thirty days. If you have a really bad tenant, regardless of the length of his lease, you can always terminate for cause.
NOLO: You mentioned criminal background checks. If you were to explain the rules to someone from another country, they might be mystified. For example, the California Apartment Association advices their members not to do a Megan’s Law search, and not only that, but refusing to rent to an ex-con might result in a lawsuit. How did it come to be that landlords have to take a “don’t ask, don’t tell” approach when it comes to ex-convicts?
JANET PORTMAN: This is one of the most interesting issues in the landlord tenant world today. Here’s the deal: California and New Jersey and Madison, Wisconsin, passed laws that prohibit employers and landlords from using Megan’s Law databases to deny housing or employment, and there’s hefty penalties if landlords break the law. Maybe these legislators realize that if ex-cons could be denied a job or a place to live once an employer or landlord saw their name on the list, they would become outcasts, and eventually go underground, defeating the whole purpose of the registration process. But landlords in these states, knowing that they are charged with maintaining a safe place for residents to live, feel that they should be able to use the database to weed out applicants who might commit crimes. So, there’s the problem. Fortunately, there’s a way to find out about a person’s unsavory past by using other tools besides the Megan’s Law lists.
NOLO: Janet, just so we’re clear, is it okay to turn down tenants who are pet owners solely on the breed of their dog? And can you do other things, like ask for special deposits because of the pet?
JANET PORTMAN: Landlords can prohibit all pets, or some pets, and they can also say, “No dogs over a certain weight, no un-spayed or non-neutered dogs,” and yes, “No pit bulls, Dobermans, or any other breed.” The only caveat here is when the tenant says, “I am disabled, and this is my service or companion dog or animal.” But let’s not get hung up on this exception. It’s not that easy to satisfy the legal definition of being disabled, so landlords aren’t likely to find hoards of tenants successfully circumventing their no-pit bulls policy by using this exception. Now, as to charging more if a tenant wants to bring a pet, most of the time, the pet deposit that a landlord wants to set should be included within the security deposit, and if your state sets limits on the amount of security deposit you can charge, you must fold whatever you consider a pet deposit into the overall deposit you charge the tenant.
NOLO: I want to be sure I have another rule correct: you can rent to a person who is in the U.S. illegally, that’s not a violation of the law, but you can’t employ that person as your property manager?
JANET PORTMAN: Yes, that is right. Our legislators, and really, our society, for we elect them, have decided that it’s against the law to hire someone who is here illegally, but it is not illegal to rent to that person.
NOLO: What happens if a married couple wants to rent, and one spouse is ideal from a screening perspective but the other spouse is a dud, and a potential liability? Can you turn them down because of one spouse’s screening results?
JANET PORTMAN: That depends on what the problem is: is it behavioral, or financial? Suppose this couple’s former landlord describes one spouse as a dream tenant, and the other as a wild party animal who caused endless neighbor complaints. You can turn them down for this reason. But suppose one spouse has a great job, and satisfies your minimum income requirement, but the other doesn’t work. Here, you must treat them as one, and disregard the fact that the unemployed spouse couldn’t handle the rent on his or her own. That’s because married people are responsible for their spouse’s basic living expenses. So, in a sense, you’re dealing with one renter, when it comes to income.
NOLO: In chapter nine of Every Landlord’s Guide to Finding Great Tenants, you say it’s okay to participate in a bidding war; you just can’t initiate one because of bait-and-switch laws. Can you elaborate on that?
JANET PORTMAN: It’s against the law to advertise one thing, then change the terms of the deal when the customer shows up. So, if you’re on a hot market and have several qualified applicants vying for your place, it’s risky to say, “Well, I’ll rent to anyone who will pay me $100 more in rent,” and so on. Instead, lucky landlords in this situation should wait and see what develops. If an applicant offers a deal-sweetener, then fine, but understand that you’re still taking a risk. A disappointed applicant may claim later that you initiated the war. It’s smarter to figure out the temperature of the market before you set the rent, and choose your tenant on the basis of who’s the best applicant, not who can offer the best goodies.
NOLO: Janet, is it really true, or is it just an urban myth, that a landlord can deny an apartment to someone simply because they’re an attorney?
JANET PORTMAN: If you live in California, then you may have a problem, since a judge might view being a lawyer as a personal characteristic or trait, and in California, you can’t discriminate on the basis of a personal characteristic. I’m not aware of any legal decisions that have followed that line, but I do recall a similar situation out of San Diego several years ago, where a condo association had a rule that an owner couldn’t sell to a lawyer. A selling owner challenged the rule, and I believe they settled it. Other states don’t forbid personal characteristic discrimination, so a “no lawyers need apply” rule might work outside of California. But there’s one thing to keep in mind: a person may be a lawyer, but could also be old, of a certain ethnicity, national origin, race, religion, be disabled, have a family… all of these characteristics are protected by fair housing laws. If the lawyer you reject happens to be a member of one of these groups – and these are big groups – you’ll get challenged for discriminating on one of these bases.
NOLO: Janet, it seems like we’ve come a long way since the landlord was actually the “lord of the land.” In viewing your book, so much of what a landlord says and does is regulated by the government. I doubt this was the case when Benjamin Franklin and Thomas Jefferson were renting property. So how did it come to be that the government could have so much control over how you screen and choose tenants?
JANET PORTMAN: The answer to your question is in how the term “landlord” has morphed into “residential rental owner,” which is what landlords like to call themselves these days. Back before Ben’s day, there were no city-dwelling tenants; all tenants were tenant farmers, who rented land from the local lord, who owned it, hence “landlord.” The lord didn’t warrant that anything worked, or was up to code, and certainly didn’t promise to fix anything; his tenant farmer was far handier. With the industrial revolution, people began moving to the cities, and gradually began renting homes without land. Fast-forward to 1971 in Washington, DC, where a group of tenants refused to pay rent because nothing worked, it wasn’t up to code, and the landlord wouldn’t fix it. Same complaint, but they won, having turned the tables 180 degrees. Courts and legislators had begun to realize that the handy tenant farmer was now the hapless office worker, who didn’t know a screwdriver from a chisel, and that the owner was in a better position to take care of the structure. Once the courts acknowledged that decent housing was a basic necessity, it was a short hop to requiring landlords to offer it, and another short hop to forbidding them from denying housing for any reason other than a solid business reason. In other words, they couldn’t discriminate based on racial and other stereotypes.