Landlords Challenge Tenant Screening Limits

by | Mar 13, 2017 | Tenant Screening

A group of landlords are suing the city of Seattle over a recent ordinance that dictates how landlords there must fill vacancies. The landlords claim the city’s new ‘first-come, first-served’ rule hampers their ability to pick the most qualified tenants.

The Seattle ordinance requires landlords who advertise vacancies to list minimum qualification standards for applicants. The first person who meets these minimum standards must be offered a right of first refusal on the rental. The applicant then has two days, and in some cases longer, to decide whether to accept the offer. Landlords cannot collect rental applications from multiple prospects and then choose the most qualified renters.

According to lawmakers, the ordinance was designed to level the playing field for vulnerable renters, such as low-income, those with disabilities, or those on government assistance who might otherwise be passed over for more qualified tenants. However, it has been argued that the ‘first-come’ policy will have the opposite affect, giving the advantage to tenants with better resources — like cars, computers and phones — who can respond to ads more quickly.

Proponents also have claimed that choosing from multiple rental applicants inevitably leads to discrimination, citing what they say is a tendency for landlords to choose tenants based on “gut instinct.” One lawmaker allegedly stated that this law will help to “reprogram” landlords to look at more objective standards.

The landlords, on the other hand, say that a first-come mandate conflicts with their existing tenant screening policies, and violates their rights to due process and free speech.

These landlords say that they have the right to rent or sell their properties to anyone they choose and for whatever price they choose, so long as they are not discriminating. They say that the ordinance does not take into account other business considerations.

For instance, in one case, the landlord rents two units in a triplex where she lives with her kids, so she seeks out tenants that she can get along with. Another landlord prefers tenants who are looking to stay long-term. One landlord cannot afford to risk a one-month vacancy, so he rallies to find a new tenant within the first three days of a 30-day notice to terminate.

These landlords say they’ve given consideration to not-so-perfect credit if the applicant otherwise was a good fit. Now, however, they say they’ve had to make qualifications more stringent — so much so that existing tenants would not qualify.

Each of the landlords runs a small rental business, and none can readily absorb income loss from vacancies. In addition to more stringent rental standards, the landlords are avoiding rental ads and relying solely on referrals in order to limit the potential renter pool.

The landlords are asking the court to grant an injunction against enforcement, overturn the ordinance, and award attorneys fees and costs.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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