December 29, 2014
Are you about to entrust possibly your most expensive possession to someone you have met for about 15 minutes? In 1977 I picked the perfect tenant for my home that I was keeping as a rental. By all outward appearances she (Mary) was perfect for my home. Recently divorced, 3 kids, looking for a 4-bedroom stable home to raise her kids. Mary’s finances fit our parameters. All was perfect. I purchased a fill in the blank rental agreement from a local office supply store, filled it out, and we both signed it. Mary gave me 1st month’s rent and a security deposit. She was due to move in May 1st, so I moved out April 15th and out of state. I hadn’t heard anything from her, so I called my neighbors around May 15th and asked if all looked ok over there. My neighbors told me that no one ever moved in. About a week later I received a letter from an attorney stating that Mary had been declared incompetent and was in an institution. He demanded return of all moneys Mary had paid me. (So much for my ability to judge people back then…) I have learned a lot since my first foray into home rental back in ’77. Here are some recommendations: * Setting the standards – There are many ways that you may exclude potential tenants legally, but do not violate antidiscrimination laws. The Federal Fair Housing Acts (42 U.S. Code §§ 3601-3619) prohibit discrimination on the basis of race, color, religion, national origin, gender, age, familial status (having children), and physical or mental disability (including alcoholism and past drug addiction). In addition, many states and cities also prohibit discrimination based on marital status, gender identity, and sexual orientation. * What can you use as a basis for rejection? A landlord may reject a tenants application for poor credit history, income that a reasonable businessperson would deem insufficient to pay the rent, negative references from a previous landlord or employer, a criminal conviction, or a prior eviction lawsuit (even one that they won). As long as they don’t discriminate, landlords can basically choose whomever they want. For example, a landlord can refuse to rent to smokers or disallow pets because smokers (and pet owners) as a group are not protected by antidiscrimination laws. If your landlord’s policy is no pets, no smoking, or some other legitimate lease or rental agreement term, you’re out of luck unless you can make some convincing arguments for your case. * It may be difficult to believe, but some people do lie on their rental applications. Do you want to start off your relationship with a tenant that lies to you on the very first item you have from them? It is very normal for me to reject an application as soon as I discover misrepresentations on it. Diligently checking their references and backgrounds also builds credibility for you with your tenants. * Ask them about their employment, and verify what they disclose. You have a right to know if they will be able to pay the rent. * Ask them about financial resources and run a credit check. Do they have judgments from electric companies or other utilities against them? If they won’t pay to keep their lights on, it is doubtful that they will pay you timely in the future. * Check their criminal background. There may be items that you are willing to overlook, but I’m sure that there are criminal histories that you would reject immediately also. * Make sure that you check the national sex offender’s database. * Check for any previous evictions. * Make sure that you check with at least two previous landlords. A current landlord may give you a great recommendation because they are dying to get rid of them. Two landlords ago has nothing to lose and will usually give you an honest reply. * Ask for copies of their Social Security cards and Drivers Licenses or other form of picture ID. * It will be difficult for you to get it later, so ask in the beginning for information that will help you find them in the future if they skip out owing you money. Siblings, Mothers and Fathers addresses and phone numbers, direct supervisors phone number at work. Friends (references) phone numbers, etc. They will willingly give you this information up front, but you are unlikely to get it later. * Make sure you treat all applicants equally. If you apply the same standards to all that apply to rent you will probably be fine, as long as you are not discriminating against a protected class or status. * Assuming all of the above works out , have a Florida Attorney prepare a lease for you. They will usually have the most up-to-date information and will help you to meet your legal responsibilities. * Hold security deposits and advance rents (if any) in a Florida banking institution, not commingled with your own money. There are many services that can help you with any or all of the above if you are willing to look for them.