From reviewing the analytics program that works in conjunction with my blog, I have learned that my two prior posts on fair housing/discrimination issues peaked a lot of interest which resulted in them being two of my most read posts to date. My prior posts can be read here and here. As a result I have decided to add another post related to Fair Housing issues.
When I give seminars on the topic of screening and accepting tenants, especially after I have just discussed the 12 protected classes, the attendees often feel as if they are not allowed to reject any applicant that is a member of a protected class. The important thing to remember is that you are legally allowed to deny rental to a member of a protected class as long as the reason you are denying them rental is not becasue they are a member of a protected class. This is a subtle distinction but a very important one. If you keep this distinction in mind during your screening process I think you will feel less “hamstrung” in general and hopefully more confident that you are not running afoul of the law.
Here are some examples of acceptable reasons to deny an applicant rental, which do not violate fair housing laws at the federal, state or local level (at least not in the city of Milwaukee):
1. The person smokes.
2. The person wants to keep a pet (not to be confused with a service animal or a comfort animal, both of which are not pets).
3. The applicant has insufficient income (income is defined broadly and includes more than just a salary from a job)
– Note: The City of Madison does have a local ordinance preventing landlords from denying a rental applicant based on minimum income standards.
4. The person’s income cannot be verified.
5. The applicant has been arrested and/or charged with a crime.
– Note: Dane County and the City of Madison have made persons with arrest records or criminal convictions protected classes in some instances.
6. The person has been convicted of a crime.
– Note: Dane County and the City of Madison have made persons with arrest records or criminal convictions protected classes in some instances.
7. The individual has been sued for owing someone money.
8. The applicant hasa money judgment against them.
9. The person does not have a prior rental history (1st time renters are not protected).
10. The applicant has a poor rental history.
11. They do not provide complete answers on the application.
12. The applicant provided false information on the application.
13. Prior landlords had negative comments about the applicant and would not rent to them again.
14. The person has poor or no credit history.
15. They have only been employed for a short period of time at their current job ( I prefer to see at least 6 months – 1 year of employment at their current job so that I know there is some stability in their source of income).
16. The individual has filed bankruptcy in the past.
17. They have a foreclosure on their record.
These are just 17 of the many legal reasons that a landlord may deny a person’s rental application even if the applicant is a member of a protected class.As long as you are rejecting an applicant for a reason other than th eperson being a member of a protected class — such as for the reasons set forth above — you are not violating the fair housing laws.
To protect yourself further, I strongly suggest that rental property owners and management companies utilize written screening criteria which sets forth the minimum standards that must be met for an applicant to be accepted, or to put it another way, what will cause you to deny an applicant.
#1 by John on November 20th, 2009
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Is it discriminatory to have different screening cirteria for different groups of people at the same building? e.g. General public has to have no criminal history, 600 credit score, etc., but University students, Short-term hospital patients, etc are allowed in with lower credit scores or no credit check because their institution has a relationship with us (but not necessarily a master lease situation) We are considering this, but we are afraid of discrimination claims under Fair Housing even though decisions aren’t made based on protected classes (even though everyone is technically part of one of the protected classes.)
Thanks,
John
#2 by Tristan R. Pettit, Esq. on November 21st, 2009
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John – Thanks for your question. I think that you will have definite fair housing issues if you have different sent of screening criteria for different sets of people. Students are a protected class in some municipalities also dont forget.
#3 by Tristan R. Pettit, Esq. on November 21st, 2009
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Steve thanks for the question — this is also a good topic for a future post.
If your landlord’s property is located in the state of Wisconsin then your landlord is incorrect. The law is very clear that in a situation such as yours that the landlord has to make “reasonable efforts” to mitigate your damages (i.e. attempt to re-rent your unit). If the landlord fails to do that then you may be able to argue that you should not be responsible for any further rent because your landlord failed to make reasonable efforts and therefore did not comply with the Wisconsin Statutes.
Your landlord is correct however that you will be responsible for the re-rental costs such as the costs of running ads.
As a note of caution to landlords, I personally would never allow my tenants to run ads for my rental property. What if the tenant places discriminatory language in the advertisement unknowingly (becasue they are not familiar with Fair Housing laws)? What if the tenant includes some wording in the advertisement that would run afoul of the landlord’s written screening criteria? It is the landlord’s property – the landlord should never relinquish the control over the property. Landlording is a business. Would you allow a client to come in and take over a portion of your business and run it – I hope not – it is no different as a landlord.
A slight digressions, but the same applies to repairing damage to the unit caused by the tenant — the landlord should either do the work himself/herself or choose the contractor to do the work and not allow the tenant to do the work themselves or hire the contractor – what if the tenant does a poor job with the repairs and someone is hurt as a result —- who is going to get sued in the end??? The landlord is. If there is a possiblity that I can get sued then I am going to make darn sure that I am in control as far as making the decisions as to who to hire and how the work is completed.
Ok, now back to the Steve’s question, the appplicable statute is Wis. Stat. Sec. 704.29 which I have set forth below:
704.29 Recovery of rent and damages by landlord; mitigation.
704.29(1)
(1) Scope of section. If a tenant unjustifiably removes from the premises prior to the effective date for termination of the tenant’s tenancy and defaults in payment of rent, or if the tenant is removed for failure to pay rent or any other breach of a lease, the landlord can recover rent and damages except amounts which the landlord could mitigate in accordance with this section, unless the landlord has expressly agreed to accept a surrender of the premises and end the tenant’s liability. Except as the context may indicate otherwise, this section applies to the liability of a tenant under a lease, a periodic tenant, or an assignee of either.
704.29(2)
(2) Measure of recovery.
704.29(2)(a)
(a) In this subsection, “reasonable efforts” mean those steps that the landlord would have taken to rent the premises if they had been vacated in due course, provided that those steps are in accordance with local rental practice for similar properties.
704.29(2)(b)
(b) In any claim against a tenant for rent and damages, or for either, the amount of recovery is reduced by the net rent obtainable by reasonable efforts to rerent the premises. In the absence of proof that greater net rent is obtainable by reasonable efforts to rerent the premises, the tenant is credited with rent actually received under a rerental agreement minus expenses incurred as a reasonable incident of acts under sub. (4), including a fair proportion of any cost of remodeling or other capital improvements. In any case the landlord can recover, in addition to rent and other elements of damage, all reasonable expenses of listing and advertising incurred in rerenting and attempting to rerent, except as taken into account in computing the net rent under the preceding sentence. If the landlord has used the premises as part of reasonable efforts to rerent, under sub. (4) (c), the tenant is credited with the reasonable value of the use of the premises, which is presumed to be equal to the rent recoverable from the defendant unless the landlord proves otherwise. If the landlord has other similar premises for rent and receives an offer from a prospective tenant not obtained by the defendant, it is reasonable for the landlord to rent the other premises for the landlord’s own account in preference to those vacated by the defaulting tenant.
704.29(3)
(3) Burden of proof. The landlord must allege and prove that the landlord has made efforts to comply with this section. The tenant has the burden of proving that the efforts of the landlord were not reasonable, that the landlord’s refusal of any offer to rent the premises or a part thereof was not reasonable, that any terms and conditions upon which the landlord has in fact rerented were not reasonable, and that any temporary use by the landlord was not part of reasonable efforts to mitigate in accordance with sub. (4) (c); the tenant also has the burden of proving the amount that could have been obtained by reasonable efforts to mitigate by rerenting.
704.29(4)
(4) Acts privileged in mitigation of rent or damages. The following acts by the landlord do not defeat the landlord’s right to recover rent and damages and do not constitute an acceptance of surrender of the premises:
704.29(4)(a)
(a) Entry, with or without notice, for the purpose of inspecting, preserving, repairing, remodeling and showing the premises;
704.29(4)(b)
(b) Rerenting the premises or a part thereof, with or without notice, with rent applied against the damages caused by the original tenant and in reduction of rent accruing under the original lease;
704.29(4)(c)
(c) Use of the premises by the landlord until such time as rerenting at a reasonable rent is practical, not to exceed one year, if the landlord gives prompt written notice to the tenant that the landlord is using the premises pursuant to this section and that the landlord will credit the tenant with the reasonable value of the use of the premises to the landlord for such a period;
704.29(4)(d)
(d) Any other act which is reasonably subject to interpretation as being in mitigation of rent or damages and which does not unequivocally demonstrate an intent to release the defaulting tenant.
704.29 – ANNOT.
History: 1993 a. 486; 1995 a. 85.
704.29 – ANNOT.
Acceptance of the surrender of premises terminated the lease and deprived the landlord of the right to seek future rent. First Wisconsin Trust Co. v. L. Wiemann Co. 93 Wis. 2d 258, 286 N.W.2d 360 (1980).
704.29 – ANNOT.
A court’s retention of jurisdiction to determine damages for rents not yet due is permitted. Mitigation expenses that may be recovered are limited to necessary expenses incurred and do not include compensation for time spent in mitigating damages. Kersten v. H.C. Prange Co. 186 Wis. 2d 49, 520 N.W.2d 99 (Ct. App. 1994).
704.29 – ANNOT.
A landlord may elect to accept the surrender of premises by a tenant, which terminates any further obligation of the tenant under the lease, but which also relieves the landlord from the obligation to apply payments from the new tenant to the former tenant’s unpaid rental obligations. CCS North Henry, LLC v. Tully, 2001 WI App 8, 240 Wis. 2d 534, 624 N.W.2d 847, 00-0546.
704.29 – ANNOT.
Whenever a landlord does not, by word or deed, accept the surrender of leased premises following a tenant’s removal, the landlord must mitigate damages by attempting to re-rent the premises. If a landlord elects to hold the tenant to the tenancy, the landlord’s re-renting the premises to another cannot, standing alone, constitute an acceptance of surrender of the premises. A landlord’s actions in dealing exclusively with a successor tenant, proposing a new long-term lease to the successor, accepting higher rent from the successor as called for in the proposed lease, and failing to communicate in any way to the tenant that she deemed him responsible for the remainder of the tenancy clearly evidenced an intent to accept the tenant’s surrender of the premises. Vander Wielen v. Van Asten, 2005 WI App 220, 287 Wis. 2d 726, 706 N.W.2d 123, 04-1788.
704.29 – ANNOT.
A landlord has an obligation to rerent when a tenant breaches a lease. Specific performance is not a proper remedy. Chi-Mil. Corp. v. W. T. Grant Co. 422 F. Supp. 46 (1976).
#4 by Susan on October 31st, 2011
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I am a landlord in New York. A recent applicant falls short of the financial requirements but is claiming his disability makes him exempt from those requirements. I have a concern about getting involved with advocate groups. What are my l rights.
#5 by Tristan R. Pettit, Esq. on November 1st, 2011
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Sue — I cannot give legal advice via this blog and I also do not know the laws in the state of NY. I would suggest that you contact a lawyer in NY that can review your situation and give you an opinion and advise you of your rights.
#6 by Elizabeth Esquibel on February 4th, 2012
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Please read the emails below… my husband, who is disabled due to schizophrenia, has a cat recommended/prescribed for by his medical and psychiatric doctors. Our application for a town house (restricted to seniors or the disabled) was denied because of his bet. I am disabled for physical reasons and due to bi-polar. Was it legal for them to deny our application? Thanks for your help! – Liz
—————————————————-
Hi Liz & Dan,
It was a pleasure meeting you.
I have talked to the owner, XXXXXXX.
He has denied your request for having the pet.
I am sorry.
If you consider moving here without the pet, we would be glad to take your application.
Sincerely, Kass
715-xxx-xxxx
————————————————————————————
From: “Liz & Dan”
To: “Kass @ XXXXXX Properties”
Sent: Tuesday, July 5, 2011 2:54:06 PM
Subject: Re: XXXXXXX Cottages
Hi Kass!
I wanted to thank you for showing the XXXXXX properties last week.
You mentioned that pets are not allowed… and I mentioned that my husband has a companion pet and you said if it was not a service animal, it would not be allowed.
My husband, Dan, is disabled from schizophrenia and his doctors (medical and psychologist) recommended he get a pet to help him manage the symptoms and stress of his illness. So 4 years ago we adopted a 5-year old neutered and de-clawed cat, Andy, who has truly been a gift emotionally to Dan.
The apartment complex we currently live in does not normally allow animals either… except for service and companion animals for the disabled, which required an application signed by our doctors. I understand cats are not like a service dog for the blind… but they can play a very important role in the life of someone who struggles with mental illness.
I just wanted to ask again if you are sure that companion animals are not allowed at the Heritage properties.
Thanks for your help!
Liz
#7 by Tristan R. Pettit, Esq. on February 6th, 2012
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Elizabeth — Please understand that I cannnot give legal advice via this blog. I can only talk about the law in general. If you wish to obtain legal advice then I would reccoemend that you retain a lawyer. Fair Housing laws do protect persons with disabilities and some of those protections include a landlord having to allow a tenant keep a a service animal even in a “no pets” rental. Other protections inlcude allowing “companion” animals under the theory of “reasonable accomodations” even in “no pet” rental properties and even if the pet is not a service animal. These cases are very fact specific and therefore you should retain a lawyer to have your specific situation analyzed.