Can you charge a different application fee for a married couple versus 2 individuals?
Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes
Can you charge a different application fee for a married couple versus 2 individuals?
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Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
12y
Originally posted by @Walter Ichikawa-Doyle:
... Even the married/unmarried should be able to be justified by the extra work involved to qualify the tenants, one member of the couple as opposed to two individuals I would think....
It would be a mistake to just check one person from a married couple. I can tell you the story about the married couple who only wanted to use the husband's info to qualify. Why was that? Because upon further investigation, the wife is the one who had the recent bankruptcy and multiple judgments ...
So each adult person, married or unmarried, gets to fill out the application and pay the application fee in to get into one of my units.
26 Replies
- Property Manager · Big Bear Lake, CA · Member since 2013 · 585 posts · 330 votes12y
I'm not positive, but yes, it appears to me that it would be discrimination. I'm pretty sure they are not allowed to do that.
- Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes12y
That's what I thought, Michelle.
Found another one with the following app fee set up:
"$35 for one person or married couple. If not married it is $45."
Seems like discrimination to me.
- Property Manager · Big Bear Lake, CA · Member since 2013 · 585 posts · 330 votes12y
There probably is no specific law written about it, but I agree, that has to be discrimination based on marital status. I would stay far away from this practice.
- Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes12y
I would think it could be considered steering, which is considered discriminatory. It is not unlike using wording such as "great apartment for a young person" or "great for families." Just as those discriminate based on age or family status, it seems that the policy of charging differently for married vs unmarried couples discriminates based on marital status.
- Investor · Nagano, Nagano · Member since 2014 · 66 posts · 18 votes12y
Wow, this is interesting. @Kimberly T. , are you saying that you can't advertise with terms like "great apartment for a young person" or "great for families"? That this is considered discrimination as you described?
I can sort of understand the married/unmarried thing, but the above blows my mind! Even the married/unmarried should be able to be justified by the extra work involved to qualify the tenants, one member of the couple as opposed to two individuals I would think... interesting.
Walter - Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes12y
Yes @Walter Ichikawa-Doyle, mentioning anything that could be considered directed at (or away from) a protected class is considered steering, which would be discriminatory. Landlords have been successfully sued for discrimination for having such wording in their ads.
- Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes12y
It's my understanding that marital status is a separate state's issue, not federal fair housing. So if that state, county, city, etc., doesn't include it as a protected class, they can probably offer that different application fees for married/unmarried. My research found that North Carolina & Virginia don't have marital status as a protected class for state rules, but Maryland does. I understand that familial status, a federally protected class, pertains to children under 18, not whether you are married or not.
- Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes12y
@Lynn McGeein wow, I'm so used to marital status being a protected class, I had no idea that some states did not include that. We currently only own rentals in CA and AZ. Looks like marital status is not covered under FHA after all - I had assumed it was. You're right, familial status relates to having minor children, not to being married (or unmarried).
The PMs with the app fees I mentioned above are indeed in NC, so I guess what they are doing is perfectly legal. Thanks for teaching me something new!
@Walter Ichikawa-Doyle I found something to back up my earlier statement regarding wording in advertisements. From nolo.com:
The federal Fair Housing Acts apply to all aspects of the landlord-tenant relationship. A landlord may not:?
- advertise or make any statement that indicates a limitation or preference based on race, religion, or any other protected category
...
http://www.nolo.com/legal-encyclopedia/free-books/renters-rights-book/chapter5-2.html
Since age and familial status are protected classes, making any comment regarding those (or any other protected class - see your state laws to confirm what all the protected classes are) is considered discrimination.
- Investor · Nagano, Nagano · Member since 2014 · 66 posts · 18 votes12y
Very interesting! Thanks for this @Kimberly T. . I'm pretty sure there's no such thing here in Japan, but I'm going to double check!
Walter
- Investor · Chesapeake, VA · Member since 2011 · 47 posts · 15 votes12y
Here's my 2 cents on this subject. I think you're over thinking this just a bit. Discrimination would be if you use words like"only" in your ad, such as only white people or only Christians. It's not going to be steering or discrimination if you used wording along the lines of, "this is perfect for college students, it's near the campus and the bus line. You're not eliminating other people, you're just stating who you think might prefer it based on the location. Some people, such as myself or seniors might appreciate knowing that the apt/house is in a college area so they can avoid it and not waste their time. Just stay away from wording that singles out specific classes as being the only ones you'd rent to and all should be good.
Disclaimer: I'm not an attorney and this is not legal advice. If in doubt, always consult a local real estate attorney.
- Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes12y
No problem, Walter!
@Jim Blatchley , "college students" are not a protected class, and you can therefore have no problem with stating that your unit is "great for college students" in your ad. Just like you could state "great for <insert name of nearby company here> employees." That's not discriminating because that's not a protected class. This is also why you can say no pets, no smoking, no tattoos, etc. They aren't protected classes.
However, stating that a unit is great for <families, immigrants, elderly, Christians, whites, etc.> is considered to be indicating a preference, and landlords can be (and have been) sued due to this wording in ads. As nolo states on their site, a landlord can't "advertise or make any statement that indicates a limitation or preference based on race, religion, or any other protected category."
If you want to mention protected classes in your ads, that's your prerogative, but don't say I didn't warn you if you get sued for discrimination.
- Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes12y
Originally posted by @Walter Ichikawa-Doyle:
... Even the married/unmarried should be able to be justified by the extra work involved to qualify the tenants, one member of the couple as opposed to two individuals I would think....
It would be a mistake to just check one person from a married couple. I can tell you the story about the married couple who only wanted to use the husband's info to qualify. Why was that? Because upon further investigation, the wife is the one who had the recent bankruptcy and multiple judgments ...
So each adult person, married or unmarried, gets to fill out the application and pay the application fee in to get into one of my units.
- Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes12y
There's a property management company in my area that charges a lesser fee for a married couple and I have wondered this same thing. My state does have a protected class for marital status and age. I don't see why you would cut a break for a married couple - there's the same amount of work involved screening them vs. an unmarried couple.
I was told when I first got my real estate license to stay away from certain terms and phrases like "great for familes" or "close to churches" and we were also told that using "master bedroom" could be considered offensive, but everyone still uses that term.
- 12yRhett TullisBusiness MemberProperty Manager · Oklahoma City, OK · Member since 2013 · 1k+ posts · 617 votes
how exactly do they verify that someone is married or unmarried? what about common law marriages? cultures where the spouse does not take their new spouses name? seems like they just use the honor system on verifying this? I tend to steer clear of all these items. while it may be legal not really worth the risk or the hassle when someone complains for a few extra bucks. You might want to look at fair housing regulations for your state/city.
- Investor · Chesapeake, VA · Member since 2011 · 47 posts · 15 votes12y
@Kimberly T. It would be nice if you actually read my post completely before commenting. I'm basically stating the same thing that you are. I'm saying NOT to mention specific classes of people, that's why I used college students as an example. Again though, to reiterate my original point, you certainly can state that an area is "great for families because it's near parks, schools, etc." You're not eliminating other people. You're NOT stating that you will ONLY rent to families. Also, there are plenty of places that ONLY rent to seniors. In fact they advertise that you must be 55 or 65 and older to live there. Obviously it's much easier and wiser if you just advertise your place for rent and don't get into specifics, then there are no worries.
- Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes12y
I charge an application for EACH ADULT INDIVIDUAL because they are screened independently.
If you want to charge less for married couples, I supposed you can charge a flat fee PER APPLICATION FORM submitted.
On the application form you can have an applicant and a spouse with their information. Two roommates, two applications, two fees. A couple, one application (with spouse) one fee, but if they choose to fill out two application forms that's fine too, two fees.
Would that work?
- Involved In Real Estate · West Palm Beach, FL · Member since 2008 · 104 posts · 17 votes12y
This type of Application fee structure is common .here.
It could reflect a view of difference in the Legal Status of
" Married" vs. " Un-Married" individuals. There are
definite differences in the obligations of the parties
and their Rights to property - The Idea being the "union"
is now one. Having credit together, resident History Together
probably looks the Same on credit checks and
differentiating is a now a " dated" idea. ( no Pun intended)
Interesting point on " Background Checks" and individuals purposely
keeping separate credit , which Steve Babiak points to. There
are definite " holes" in most PM 's determinations on
tenant credentials. The application process for many has
just evolved from what they have traditionally done.
The main reason for the "break" for married couples
usually stems from the excessive fees charged for" checking",
and are offered to off-set the "turn-off" of such fees. If you really
want something to think about: ask the PM's for their written
policies on the review of tenant credentials and the basis used
to recommend approvals: Yipes!
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes12y
Originally posted by @Jim Blatchley:
@Kimberly T. It would be nice if you actually read my post completely before commenting. I'm basically stating the same thing that you are. I'm saying NOT to mention specific classes of people, that's why I used college students as an example. Again though, to reiterate my original point, you certainly can state that an area is "great for families because it's near parks, schools, etc." You're not eliminating other people. You're NOT stating that you will ONLY rent to families. Also, there are plenty of places that ONLY rent to seniors. In fact they advertise that you must be 55 or 65 and older to live there. Obviously it's much easier and wiser if you just advertise your place for rent and don't get into specifics, then there are no worries.Jim,
You are a little off in your assessment of the fair housing laws. "great for families because it's near parks, schools, etc" IS steering. I think we should be allowed to say things like that but I don't make the rules.
As for the senior's only buildings.
-
(A)provided under any State or Federal program that the Secretary determines is specifically designed and operated to assist elderly persons (as defined in the State or Federal program); or
(B)intended for, and solely occupied by, persons 62 years of age or older; or
(C) intended and operated for occupancy by persons 55 years of age or older, and--
-
(i) at least 80 percent of the occupied units are occupied by at least one person who is 55 years of age or older;
(ii) the housing facility or community publishes and adheres to policies and procedures that demonstrate the intent required under this subparagraph; and
(iii) the housing facility or community complies with rules issued by the Secretary for verification of occupancy, which shall--
-
(I) provide for verification by reliable surveys and affidavits; and
(II) include examples of the types of policies and procedures relevant to a determination of compliance with the requirement of clause (ii). Such surveys and affidavits shall be admissible in administrative and judicial proceedings for the purposes of such verification. - Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes12y
Thanks @James Wise, you're exactly right about mentioning "great for families" as well as the exception for 55+ communities.
Saying "great for families" is considered to be indicating a preference regarding a protected class (even if the landlord wouldn't actually discriminate for or against families in his/her screening of applicants), which means it is discrimination and is therefore illegal.
As Lynn M. mentioned above, though, some states do not have marital status listed as a protected class, so discriminating against married/unmarried couples is apparently legal in those states. Just like discriminating against smokers, people with tattoos, etc.
- Investor · Chesapeake, VA · Member since 2011 · 47 posts · 15 votes12y
Well there sure are lots of people breaking the law then, according to you. Here's just 2 ads found and there's thousands more available.
http://www.flipkey.com/ewa-beach-vacation-rentals/p199789/
Here's more examples taken from
http://www.apartmentlist.com/ca/santa-barbara
So, you're moving to Santa Barbara. I hope you like beaches, laid back vibes, mountains and beautiful scenery, because if you don't, who are you anyway? Santa Barbara is a popular destination for surfers, families, party-goers and anyone who likes a good time. Now, let's find you an apartment so you can start enjoying your new city!
The Mesa is located southwest of the downtown, close to both Santa Barbara City College and the beach. Because it is removed from the State Street crowd, it has less of a tourist vibe than the southern portions of town along the waterfront. East Mesa, which is closer to the college, has a bit of a younger vibe, while West Mesa is better for settled families and low-key professionals. Dwellings in this neighborhood vary from charming houses to drafty apartments to sprawling mansions. Prices for two bedrooms throughout Mesa generally cost in the low $2000s.
There's something interesting happening in the northern portion of Santa Barbara. Because of the breathtaking views in the Foothills, rental prices are quite high in this region of town. However, just below the Foothills neighborhood, the distance from the beach makes the neighborhood of San Roque much more affordable. So, if you're a multimillionaire, good for you! You should definitely check out the luxurious rentals in the Foothills, which can cost up to $10,000 a month. If you have slightly less money to toss around, look into the family-friendly San Roque area, where two bedrooms generally go for the more modest price of $1800-2000. So you won't be in walking distance of the beach, but you'll be a safe distance from the tourist-infested areas that are closer to the waterfront.
- Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes12y
Yup, I see it regularly. Obviously not everyone who does it gets sued, but I don't see the point in taking a chance. Advertising that a unit is "close to parks" is more enticing and informative than saying "great for families," so I really don't see why anyone (who knows that it's illegal per FHA) would still say that.
Anywho, my thread was about marital status, and that issue has been resolved per Lynn's post.
- Investor · Chesapeake, VA · Member since 2011 · 47 posts · 15 votes12y
@Kimberly T. Yes, sorry that we got off track here. My only problem is that you keep saying that it's illegal to say something along the lines of "great for families", when that's just not true. Secondly, unless you're an attorney you probably shouldn't be giving legal advice without at least having a disclaimer or showing some examples of case law in order to prove your point.
Here's a link to The Fair Housing Act:
http://www.justice.gov/crt/about/hce/title8.php
and here's the specific section that I believe, although I'm not an attorney, proves my point.
Sec. 804.[42 U.S.C. 3604] Discrimination in sale or rental of housing and other prohibited practices
As made applicable by section 803 of this title and except as exempted by sections 803(b) and 807 of this title, it shall be unlawful--
(a)To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.
(b)To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin.
(c)To make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.
(d)To represent to any person because of race, color, religion, sex, handicap, familial status, or national origin that any dwelling is not available for inspection, sale, or rental when such dwelling is in fact so available.
(e)For profit, to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex, handicap, familial status, or national origin.Now, if you're concerned about "intent", then here's another good read:
http://portal.hud.gov/hudportal/documents/huddoc?id=discriminatoryeffectrule.pdf
"Consistent with its own past practice and that of many federal courts, HUD proposed a burden-shifting framework for determining whether liability exists under a discriminatory effects theory. Under the proposed burden-shifting approach, the charging party or plaintiff in an adjudication first bears the burden of proving that a challenged practice causes a discriminatory effect. If the charging party or plaintiff meets this burden, the burden of proof shifts to the respondent or defendant to prove that the challenged practice has a necessary and manifest relationship to one or more of its legitimate, nondiscriminatory interests. If the respondent or defendant satisfies this burden, the charging party or plaintiff may still establish liability by demonstrating that the legitimate, nondiscriminatory interest can be served by another practice that has a less discriminatory effect."
So, as I originally stated, as long as you don't use words that indicate that you prefer families (or any other class) or that you are limiting the rental to families only (or any other class), then you should be OK. I also stated that if you're not sure, then don't use such terms and seek the advice of a real estate attorney.
- Investor · Colorado Springs CO · Member since 2014 · 535 posts · 253 votes12y
Originally posted by @Jim Blatchley:
@Kimberly T. Yes, sorry that we got off track here. My only problem is that you keep saying that it's illegal to say something along the lines of "great for families", when that's just not true.Yes, it IS true. Every article I've read from a lawyer on this topic states that it is illegal to have such statements in your ads. A simple search online will bring up articles available from lawyers indicating that such a statement is considered discriminatory because it can be interpreted to indicate a preference. One such example from the American Bar Association's website:
10 Things Landlords Should Know About Fair Housing
By Kristi Bunge
Sounds pretty simple if there are just 10 things to advise Landlords about with regard to fair housing law. Unfortunately there are more than just the 10 items listed in this article. However, these 10 are an excellent start, and knowing about fair housing will help lead to understanding what should and should not be done when renting property. Understanding fair housing is the best protection against a claim that a fair housing law has been violated. If you are an attorney advising a landlord on what to watch out for, the following items are a good start.
1. ADVERTISING. Advertising is one of the most common ways landlords find people to place in rental properties. When advertising, landlord clients should describe property attributes and/or amenities, not what they are or are not looking for in a resident. Landlords should not say “great for a young couple” as it may be considered discriminatory to families with children.
...
Obviously, the reverse would be true as well (saying "great for families" could be discriminating against childless people).
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes12y
Didn't read a thing, just from the title.
You can charge for those actual charges incurred necessary that are customarily required for the due diligence normally performed. If you get a joint credit report on a husband and wife that will have a certain cost. Obtaining two individual CRs may cost more, you can charge for the difference. Verifying past rents of a couple may be less than for tow separate individuals, if your state laws allow to charge application fees you can justify the additional costs and charge accordingly.
Say fees are allowed and you charge $35 for an individual and $40 for a married couple. You can charge $40 to process two individuals together with actual additional costs, if you were to charge $70 that may well be a violation in treating applicants different as to family status.
If 3 people were involved I'd still stick to the charge of a couple and one individual in aggregate. IMO the issue is whether or not you are attempting to use the application process as a profit center, that can get you hammered. If you had enough applicants, say you advertised below market rents or even market rates, drawing in applicants and then processing applicants in a stringent manner not approving tenants, you'll be up a creek. You could make more from application fees than rents, you'll likely see fraud charges just as mortgage brokers do in application fees and not making loans.
Bottom line, application fees should cover actual expenses and a reasonable amount for admin duties if they are allowed to be charged at all. :)
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