Rule Changes for Tenant Screenings Worry Landlords

By Michael Klazema on 10/17/2019

Across the country, access to affordable housing and whether landlords have created unfair barriers to housing remain hot topics for debate. Increasingly, those debates have produced legislation and local ordinances that directly affect a landlord's ability to choose to whom they rent. With tenants and their advocates pushing for fair access to housing while landlords express concern over safety and profitability, the stage is set for a long-term battle over these issues. 

At the battle’s center is the background checks that many landlords use. Late in 2019 in Minneapolis, the city council passed an ordinance reshaping tenant screening in the area. Following objection from landlords and real estate groups, the new rules put into place large-scale changes to the rental process. Most significant among them is how landlords can react to information that they discover from criminal history reports such as the US OneSEARCH by  

Landlords now face time limits on what they may consider; for example, misdemeanors or evictions three years old and older cannot influence housing decisions. The lookback period in Minneapolis ends at seven years for felonies and a decade for certain more serious crimes such as some assaults, and landlords can still outright deny registered sex offenders. Landlords contend that these changes will make their position unprofitable or untenable; proponents claim that it is an essential step towards a fairer, "renter-first" approach. 

In other areas, background checks are caught in the crossfire as a tool that some landlords and their real estate brokers use in circumventing the law—not laws related to tenant screening but rather rent stabilization. In New York, new rules that went into effect in 2019 capped background check fees for tenants at $20 and limited security deposits to one month's rent. According to reports by applicants in the city, landlords persisted in charging high fees, using applicants' need to move quickly on vacancies against them. 

Authorities in both New York and Minneapolis have claimed that the new restrictions on tenant background checks could drive landlords out of business. In Manhattan, some property companies began to leave apartments vacant just months after the new rules went into effect, lending some credence to the claim of unintended consequences made by Minneapolis landlords. However, with concern over accessible housing remaining high at the state and local governmental level, further changes in screening procedures are likely.  

While understanding how to use background checks effectively and legally as a landlord is important, the ability to consistently run those checks is just as critical. empowers landlords to develop a clearer, broader picture of an applicant's history and suitability through both tenant background checks and credit reports.  

Always be sure to investigate local rules, such as those in New York and Minneapolis, that may affect your screening process—but don't let them dissuade you from checking at all.

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