Interviewing potential residents for your rental property is fraught with risk. You need to accomplish multiple goals without exposing yourself to potentially bankruptcy-inducing liability. San Diego property management companies are experienced at interviewing applicants without exposing you or themselves to liability for discrimination or any other reason. California is particularly challenging because it imposes additional protections on top of the federal Civil Rights laws.
If you are hoping to fill your home condo in Point Loma, your single-family home in Pacific Beach, or your sprawling “tract home” in Chula Vista with a reliable, trustworthy and credit-worthy resident then you may want to review the following information. There are numerous rules with which you are required to comply, missing even one could result in hundreds of thousands of dollars in fines and legal fees.
Rejecting an Applicant
The general rule is that property owners can reject any applicant and you aren’t required to give a reason. For example, if an applicant showed up with pink hair and a face tattoo, you could politely reject their application and never call them again. You could do that same if they have an animal (unless it is a service animal, which is why you need to be careful).
You can even reject them based on the information you get back from a credit check. However, in California, if you reject a housing applicant because of information on their credit report, you are required to give written notice of the following: first, that you decision was based on information contained in their credit report, second, the name, address, and telephone number of the credit agency that provided you with the report, and finally, a statement that the applicant has the right to obtain a free copy of their credit report from the agency that prepared it and the right to dispute inaccurate information found on it.
It isn’t intuitive to think that it is your responsibility as a property manager to inform someone if they have bad credit, but in this situation, you are. It is because of idiosyncratic rules, such as this one, that a San Diego property management company is so useful. Good full-service property management companies are experienced in both interviewing and rejecting applicants in a way that protects property owners from any potential liability so you can continue having peace of mind that your property is being managed correctly.
As a property manager, you are permitted to review the background of an applicant resident to see if they have been evicted before. Past evictions are a good indicator of potential future behavior. The reason you want to reject tenants with eviction is that the eviction process in California is slow and expensive. You can serve a tenant with an eviction for just for any reason but they get either 30 or 60 days notice and they are permitted to respond.
You aren’t required to list a reason, but many property owners do because it is a way to define the conversation about the eviction early. If you don’t choose a reason, the tenant could counter with a discrimination claim. Whereas, if you report failure to pay rent or that the resident materially damaged the property, then the conversation is about neutral reasons to evict.
In these situations, it is ideal to have a management service company, like Property Advantage, on your side. Eviction proceedings, like applicant screenings, are fraught with potential liabilities and lawsuits. The last thing you need while you are trying to build your rental property portfolio is a lawsuit or two in the background. These discrimination lawsuits are expensive to defend, even if you are 100 percent innocent.
You Are Responsible
Finally, you are allowed to conduct credit checks, work history checks, background, criminal, and eviction history checks. However, you are also required to comply with all applicable rules if you conduct these checks. That means you need to know every rule and comply with it. If you think that is unfair or unrealistic, that is why San Diego property management companies exist; these companies can help you stay in compliance. Essentially, the buck stops with you, but a property management company can help manage the burden.
If you’re interested in full-service property management for your real estate in San Diego county, Property Advantage can help you! We service all of the San Diego area including Pacific Beach and North San Diego county.