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Travis Logue: Smart Landlords Use Screening Criteria to Combat Discrimination Lawsuits

In today’s online social media era, it is especially easy for professional litigants and scam artists to harvest useful content, masquerade as prospective tenants and victimize landlords like targeted prey.

That is why it is absolutely essential that landlords utilize a systemized approach to reduce the likelihood of selecting the scheming tenant who, inevitably, will be armed with powerful knowledge that fair housing laws are slanted heavily against property owners. Such information, when combined with unwitting landlord missteps, may be leveraged into lucrative settlements.

Don’t be fooled. Discrimination lawsuits are not confined to San Francisco, Berkeley and Santa Monica. If they have not emerged in your community, they will soon.

At some juncture, many of us will become a landlord — whether it’s individually, as a trustee or executor, or helping your mother-in-law or a friend. Successful landlords in California must effectively navigate a minefield of local, state and federal law.

It’s no wonder that property owners, property managers, real estate agents and even attorneys frequently make critical mistakes in this area. There are countless traps for the unwary and, in fact, the wary.

The penalties are extremely stiff: treble damages, punitive damages, attorneys’ fees, injunctive relief, etc.

In addition, being named as a defendant in a discrimination lawsuit is embarrassing and may produce a public relations nightmare.

One element to a systemized approach and the landlord’s first line of defense is to successfully screen the applicants, which is no easy feat.

Furthermore, even if the landlord acts 100 percent within the law, a disgruntled tenant still may file a claim with the California Department of Fair Employment & Housing (DFEH) and trigger an “official review.”

Acting as a “neutral fact-finding agency,” one of the first investigative steps undertaken by the DFEH is to send the landlord an ominous formal letter demanding documents and answers to countless questions within an unreasonably short timeframe.

Similar to an IRS audit, responding takes substantial time and careful consideration. Any prudent landlord would be well-advised to immediately hire experienced counsel after receiving the dreaded DFEH love letter. After all, the DFEH has the power to take depositions, issue subpoenas and interrogatories, and seek temporary restraining orders during the course of its investigation.

Moreover, if a meritorious complaint for discrimination filed with the DFEH is not resolved through conference, conciliation, mediation or persuasion, or if a respondent breaches a conciliation agreement on the complaint, the DFEH must file an action in state court. DFEH v. Ottovich (2014) 227 CA4th 706.

One routine DFEH question is, “Describe in detail your criteria for selecting tenants. Submit a copy of any written policy or procedures.” Thus, shrewd landlords and property managers absolutely must develop and employ written screening criteria.

Analogous to a checklist, the criteria are the landlord’s minimum rental requirements. If one criteria is not achieved, move on to the next applicant. Written screening criteria assist landlords to stay disciplined and refuse rental only if there is an objective, quantifiable and verifiable reason.

If the landlord rejects a potential tenant and is subsequently smeared with a fair housing complaint, it behooves the landlord to demonstrate why the individual he or she rented to was lawfully more qualified than the rejected applicant.

Fundamentally, a landlord who has the prescience to develop and maintain written screening criteria, with the assistance of a qualified attorney, will undoubtedly be far more effective in rebutting allegations of discrimination down the road.

Travis Logue is a partner at Rogers, Sheffield & Campbell LLP, a Santa Barbara law firm. Click here to read previous columns. The opinions expressed are his own. This article is not intended to provide legal advice. For legal advice on any of the information in this post, click here for the form on the Rogers, Sheffield & Campbell Contact Us page, or call 805.963.9721.

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