When you own commercial apartment or home rentals, you are responsible for following state, local and federal laws for tenant screening. Failure to do so can result in an expensive lawsuit.
These are the key regulations for fair tenant screening in Los Angeles.
In a rental application, you may ask a tenant to provide:
- His or her monthly income
- Employment information
- Financial information to prove he or she can pay the monthly rent
- The number of family members who will live in the unit
Federal law prohibits landlords from asking questions about:
- Race, ethnicity or religion
- Gender or sexual orientation
- Ancestry or national origin
- Marital or familial status
- Source of monthly income
- Disability or health status
- Age of individuals who will live in the household
- Citizenship or immigration status
Deciding not to rent to a tenant based on any of these factors constitutes discrimination.
California law limits landlords to a set amount per adult for a tenant application fee. The state updates the maximum fee to adjust for cost of living each year. If two adults want to rent a unit, you can charge twice the limit on the application fee to cover the cost of credit and background checks for both.
If you decide not to rent to potential tenants based on their credit, you must give them a copy of the report you used. Landlords must provide a receipt for the cost of credit and background checks plus reasonable time spent to obtain these items.
Required application elements
If you plan to perform background checks on potential tenants, you must get explicit permission to do so in writing. Ask this question as part of the rental application and require the applicant to sign that section.
Using a tenant screening application that does not comply with state law can result in federal fines and potential discrimination lawsuits. A legal review can ensure that your screening process complies with Los Angeles and California law.