Rental discrimination/morality
November 22, 2009 5:09 PM   Subscribe

I'm a landlord for a owner-occupied 4-unit bldg. I know I can't discriminate, with respect to tenant selection, regarding "family status", but am I free to prefer a single-occupancy renter to a family? My motivation is mostly remunerative -- included in rent are: water, hot water, and heat, and so a single renter is cheaper for me than a family of three with respect to those utilities. Is my preference for 1 vs. 3 rentors actionable discrimination? (Call me a miser if you like, but I'm under rent control, and I need to watch my costs, since it is near impossible to pass inflationary costs on to tenants.)
posted by JimDe to Law & Government (15 answers total) 3 users marked this as a favorite
Lots of places charge $100 extra/person for this very reason (presumably).
posted by shownomercy at 5:19 PM on November 22, 2009

Couldn't you unbundle these utilities from the rent, thus saving you this problem entirely? Otherwise, what you're asking for here is legal advice, and MeFi can't give you that. You may be exempt from the Federal Fair Housing Act, because "owner-occupied buildings with no more than four units" are typically exempt. However, state or local laws can give increased protections, and may apply in your case. Ethically, you're certainly skirting the spirit of the law, whether such discrimination is actually actionable or not (the exemption for small owner-occupied buildings is really intended to allow the landlord to have some control over the climate of the building, not to force down utility costs), and the moral thing to do would be not to discriminate, but to charge separately for utilities, if possible under your rent control ordinance, so as to keep differing family sizes from touching your bottom line.
posted by zachlipton at 5:20 PM on November 22, 2009

Can you be specific as to where you are? That's important.
posted by chesty_a_arthur at 6:15 PM on November 22, 2009

It may well be legal to charge more per person in each unit, but you generally have to allow any number of tenants up to the legal maximum permitted on your occupancy permit. I'd say the real question here is what is allowed by your local rent control rules. You may be able to pass on some of the utility expenses in a way not covered by rent control. What you cannot do is pass on those expenses to families while giving preferential treatment to singles. Again, you need a local landlord-tenant lawyer to advise you on what is legal in your jurisdiction.
posted by zachlipton at 6:30 PM on November 22, 2009

As long as you're not advertising, only finding potential single renters through word-of-mouth, discrimination is a moot point. I think.
posted by BostonTerrier at 6:59 PM on November 22, 2009

You need to ask your lawyer--you have one, right?--this question. Not us. We are not competent professionals in your jurisdiction, and anything we say could land you in hot water.
posted by dirtynumbangelboy at 7:29 PM on November 22, 2009 [1 favorite]

Hi JimDe- I was in the same situation (as far as owning/living in a 4-plex.)
In my state it was legal to discriminate, in some ways, if YOU lived under the same roof. For example (I was told) I didn't have to rent to unmarried couples and a few other groups---I don't remember which ones because it was more an academic discussion with my best friend (who happened to be law review.)
I'm saying all this not to give legal advice but rather to point you in a direction you may benefit by examining.
posted by Twist at 7:45 PM on November 22, 2009

Two things.

As far as rent control, you may or may not be able to charge extra for more than one occupant. You'll have to seek local counsel about that one. This isn't even a state-level question most of the time, so no one on here is even going to be able to gesture at the right answer without knowing your location pretty precisely.

Second, there is a plausible argument that limiting your units to single occupants is not in fact discriminating based upon family status, as you'd presumably not want to rent to unrelated roommates either. Landlords are generally permitted to exert some control over how many people are living in an apartment, and not just for the purposes of enforcing fire code. Again, your local ordinances may have other things to say, but there is possibly room for hope.

But in the end, you really are going to have to talk to a local landlord/tenant attorney. Get in contact with your state or local landlord's association--they're around--and see who they recommend.

Though IAAL, IANYL, nor probably licensed in your state.
posted by valkyryn at 7:53 PM on November 22, 2009

If you talk to a professional legal entity, you will get the advice that you may not discriminate. This covers their liability, obviously.

What you need is a work-around. I've employed a few, here they are:

1. While I can't control who phones in about a vacancy, I do a telephone pre-interview. This tells potential tenants I am serious and professional and usually discourages deadbeats and other undesirables from scheduling a viewing.

1b. I ask questions regarding their requirements before telling them about the unit. You need a dishwasher? Sorry - not in that unit. You want to hook-up your own washer/dryer? Sorry - that's against building policy. You need a move-in date 2 months from now? Sorry - I need a tenant for immediate move-in. And so on, and so forth. You have a big family - sorry, I'm pretty sure the apartment is too small for your requirements, it has a really small living room/kitchen/bedrooms, etc.

Most folks won't waste their time going to see an apartment you've talked them out of. Be open if they still want to see it, though!

2. I NEVER let folks take an application. If they like the apartment, they must must must sit down with me for a short formal interview and to fill out the application. I let them call me with additional info, but I do not let them take the app to fax back later.

2b. There is an application fee. By law, it is the exact amount of the credit check. Cash only. I don't consider an app until I've got the cash and a fully completed app.

2c. Run the application of every adult occupying the unit, without exception! This means they must sit down and interview with you, as well. Do not consider tenancy until you've met with all potential occupants.

Conclusion: Between their requirements, your requirements, and the background check... you should be able to legally turn down anyone you don't want to rent to. Most people have credit dings, these work to your advantage.

(What I'm telling you is that you can and should use the application process. Most owners get lazy and only look at credit scores - but that doesn't tell the whole story. Is your applicant a party person and the rest of your tenants 9-5 professionals? That won't work for you, and you'll find this out during the interview and background check. I don't think you can refuse someone on the grounds that they seem like a party hound, but you can reject them for having defaulted on their school loan. You understand what I'm getting at here?)

**If all else fails and I'm really really widgey about someone, I tell them I think I have the apartment rented, but if they want I can show it to them anyway. Then I show it, if they want. I don't do the interview or application. If they call back to inquire about the status, I tell them it's rented and take the apartment off the market for a week or two. Worse case, you can always claim the renter flaked, although this has never backfired on me. I only had to do it once or twice, never "caught."

***I know owners who let apartment calls go to voicemail, and then they only return the calls of folks who were polite and clear in their messages. I don't do this, but it seems to work for others.

YMMV. MeMail if you have additional questions.
posted by jbenben at 9:07 PM on November 22, 2009 [3 favorites]

jbenben: it is, as I understand it, generally illegal, and very often immoral, to create conditions that constitute discrimination even if you do so in a way that isn't outright discriminatory. Telling a single mother with two kids, "oh, that's a third floor apartment with a balcony so that's not ok for your family" or, "each child needs his/her own bedroom" is usually considered illegal according to the websites of many of the agencies that deal with housing discrimination. Obviously, you can (and likely must) refuse to rent to more individuals than you are permitted to house, but it's generally not ok to "talk people out" of renting or even to discourage them from renting if you are doing so based on membership in a protected class (unless you're under an exemption from the Fair Housing Act).

As I and valkyryn have said, this mostly turns on the details of your local rent control ordinance, which is likely a city or county function wherever you are. You need to talk to a lawyer there who can answer questions like "are utility payments rent?" and "can I charge extra per person?" based on your local laws. A short consultation won't cost you too much, and it may well pay for itself if you find that you are able to pass along some utility costs to your tenants. Finally, there may be a local landlord association in your area that might serve as a resource, although this is of course not the same as personalized legal advice for your situation.
posted by zachlipton at 9:26 PM on November 22, 2009 [3 favorites]

Oh, and should you pull the "tell them it's already rented, pull it off the market, and put it back a bit later and hope nobody notices" trick and later come under the attention of your local Fair Housing Enforcement Board, this will look really, really bad. It isn't exactly hard for them to verify that you didn't really rent the apartment and relist the apartment in the intervening period, and once they find out you pulled this shenanigan on somebody where a protected class was involved, they will be wholly unsympathetic to your case.

Similarly, only calling back the people who left "polite and clear" messages could well be viewed as discriminating based on national origin, disability (e.g. speech impediments), or perhaps ethnicity depending on what kind of screening you're doing. Fair housing groups and state attorneys general are known to conduct "sting" operations where they, say, have six people with accents call a landlord and six without call and compare who gets callbacks. You also (again, if you're not exempt from the relevant federal and state fair housing laws) can use credit reports, but not in a discriminatory way against a protected class. So you can't accept a single childless person who defaulted on a student loan and then reject someone with two kids because he/she defaulted on their loan.

There are lots of legal forms of housing discrimination, but trying to workaround the law through underhanded tricks really isn't acceptable. Your criteria should be "does this person satisfy the requirements to be a responsible tenant?" and you can use information like credit reports, background checks, income verification, references, and the like in order to verify this condition. Ethically, you really don't get to go too far beyond this, even if the law may let you discriminate further, as it does in many states.
posted by zachlipton at 9:54 PM on November 22, 2009 [2 favorites]

People with accents are no less likely to give clear complete information. Parts of jbenben's list are very helpful, but, no, don't use the process to discriminate on the basis of any protected category. It's okay to discriminate because you think someone will be loud, not pay the rent, or be a bad neighbor in a specified way.

Call the local Legal Aid Office. Ask them. Tell them you're a landlord, and want to be certain you do not break the law.

If possible, charge for extra occupants. I used to be a landlord, and agree that costs go up with the head count. Water, heat, and wear & tear. Heat wasn't included, in my case, which was better for me and the environment. People who don't pay their own heat can be really wasteful. You should be able to legally limit how many people can live in the apartment, but you probably can't specify children vs. adults. My favorite tenants, who did their own repairs and painting, had 2 little kids, and ran a home daycare. Good tenants are varied.
posted by theora55 at 7:51 AM on November 23, 2009

Re: having the renters pay separate utilities - In some places this is only legal for utilities that you have separate meteres for measuring each unit's consumption.
posted by WeekendJen at 9:10 AM on November 23, 2009

As others write above, you really need to consult with a local attorney. I'm not your lawyer, and this shouldn't be construed as legal advice.

It's unclear from your post whether you are the owner of the building or just an agent for the owner. In the US, the Fair Housing Act of 1968 specifically excludes owner-occupied dwellings of 4 or fewer units except that you may not ADVERTISE that you have a preference. In other words, under the Fair Housing Act, if you're the owner-occupant with 4 or fewer units, you can discriminate, but you can't admit that you discriminate. HOWEVER: you are obviously subject to other, local regulations that those of us in other jurisdictions are unaware of. We don't know where you are, so we can't know what the local rules are. Local advice is best. An hour of an attorney's time to determine what the law is in your jurisdiction will be far cheaper than the number of billable hours you'll pay if you have to defend a lawsuit.
posted by fogovonslack at 11:14 AM on November 23, 2009 [1 favorite]

Geezus H.!!

I've actually called in friends to translate languages with polite folks who had trouble communicating with me in the 3 languages that I do speak -- I was referring to demeanor NOT ethnicity. I'm sad that was misconstrued!

Polite folks always make better tenants. Thats why I'm all about the interviewing, interviewing, interviewing. It cuts out on future hassle once the lease is signed.

Sometimes splitting the meters is not fiscally possible. OP will have to do a cost/benefit analysis to decide if the upgrade is worth it. If the cost of separating out the utilities pays for itself and provides savings within 2 to 5 years - it is well worth the hassle. If rent-control prevents OP from shifting the utilities cost onto existing tenants (and thus altering their leases) maybe not so much.

Yes. Local advice is best.
posted by jbenben at 5:48 PM on November 25, 2009

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