July 2023 Blog

This month, we talk Assembly Bills, Fair Housing Laws and how we as property managers screen tenant applications.

Recently in the California Senate, a bill authored by Sen. Maria Elena Durazo, D-Los Angeles, that would critically hinder your ability to effectively manage and invest in rental housing in California.

Here’s how SB 567 could negatively impact you:

  • Restricts your ability to move into your property: This legislation introduces a restrictive definition of an “owner,” potentially preventing you from moving into your own property if you or your family needed to do so.
  • Obstructs essential repairs and renovations: The bill could obstruct your ability to repair significant property damage or to conduct necessary renovations, even when tenant safety is at risk.
  • Complicates property sales and investments: The bill introduces unnecessary obstacles if you’re a small property owner looking to exit the rental market or sell your property.

Now let’s outline how Fair Housing and Tenant Screening are related

Fair Housing Laws prohibit discrimination in housing based on protected characteristics such as race, color, religion, sex, national origin, familial status, and disability. In California, the Fair Employment and Housing Act (FEHA) extends these protections and applies them to housing practices, including tenant screening.

Screening tenant applications on a first-come, first-serve, first-qualify basis is considered a fair and non-discriminatory practice that aligns with the principles of Fair Housing Laws. Here’s why:

  1. Equal opportunity: By using a first-come, first-serve, first-qualify approach, property managers ensure that all applicants have an equal opportunity to be considered for tenancy. It creates a transparent and objective process where applicants are evaluated solely based on their qualifications and the order in which they submitted their applications.
  2. Non-discriminatory: Screening tenants based on their qualifications, rather than subjective criteria or personal biases, helps eliminate discrimination in the tenant selection process. Fair Housing Laws require that housing providers treat all applicants equally, without regard to their protected characteristics. By following a standardized and objective process, property managers can minimize the risk of discriminatory practices and potential fair housing complaints.
  3. Consistency and documentation: Implementing a first-come, first-serve, first-qualify policy allows property managers to demonstrate consistency in their tenant selection process. They can establish clear criteria for qualification, such as creditworthiness, income verification, rental history, and criminal background checks. By documenting the process and adhering to the same criteria for all applicants, property managers can establish a strong defense against discrimination claims.
  4. Avoiding selective practices: Adopting a first-come, first-serve, first-qualify policy helps property managers avoid selective practices that may inadvertently discriminate against certain groups. When applications are processed on a subjective basis or if landlords selectively choose tenants without clear criteria, it can create opportunities for bias and discriminatory actions. By adhering to an objective and non-discriminatory process, property managers can mitigate these risks.

It’s important to note that while first-come, first-serve, first-qualify screening is generally considered fair and lawful, property managers still need to ensure that their qualification criteria do not disproportionately impact protected groups. They should review their criteria periodically to ensure they are necessary and directly related to the applicant’s ability to fulfill their lease obligations.

It is always advisable for property managers in California to consult with legal professionals or organizations familiar with local fair housing laws to ensure compliance and to stay updated on any changes or additional requirements.