Tenant screening is an essential step for landlords in New Hampshire to ensure they rent their property to reliable and responsible tenants. Conducting thorough background checks, reviewing rental history, and understanding the state’s legal requirements can help landlords avoid problematic tenants and legal issues. This blog will outline the legal guidelines and best practices that landlords in New Hampshire should follow during the tenant screening process.
Complying with Fair Housing Laws
One of the most important aspects of tenant screening in New Hampshire is adhering to federal and state fair housing laws. Under the federal Fair Housing Act, landlords cannot discriminate against potential tenants based on race, color, religion, sex, national origin, disability, or familial status. New Hampshire law extends these protections, prohibiting discrimination based on sexual orientation, marital status, and gender identity.
Landlords should ensure that the tenant screening criteria are applied equally to all applicants. This means using the same application form and asking the same questions for every applicant to avoid claims of discrimination. It’s also vital to avoid any language in advertisements or applications that suggests a preference for or against certain groups.
Setting Clear Rental Criteria
Establishing clear and consistent rental criteria is a key best practice in the tenant screening process. Landlords should determine in advance the factors they will consider when evaluating prospective tenants. Common rental criteria include credit score, income level, employment history, rental history, and criminal background.
By having these criteria in place before screening tenants, landlords can make fair and informed decisions. This also protects against accusations of unfair treatment or bias. It’s essential that these criteria be reasonable and comply with both federal and New Hampshire state laws.
Charging Application Fees
New Hampshire landlords can charge application fees to cover the costs associated with screening prospective tenants. While the state does not have a specific cap on application fees, it is important to keep these fees reasonable. Landlords should disclose the application fee upfront and explain what it covers, such as credit reports, background checks, or verification of references.
Transparency is key when it comes to application fees. Informing tenants about the cost and purpose of the fee will prevent confusion or complaints later on. Keeping fees consistent for all applicants also helps avoid any perception of discrimination.
Conducting Credit Checks
A credit check is a vital part of tenant screening as it provides insight into a potential tenant’s financial responsibility. A credit report allows landlords to see whether an applicant has a history of late payments, unpaid debts, or bankruptcies. This information can help landlords assess whether a tenant is likely to pay rent on time.
Before running a credit check, New Hampshire landlords must obtain the tenant’s written consent. This is typically done through a clause in the rental application. Reviewing the credit report carefully and considering the applicant’s entire financial situation, including income and current debts, can help landlords make informed decisions.
Verifying Employment and Income
Verifying a tenant’s employment and income is crucial to ensure that they have the financial means to pay rent. Landlords should ask applicants for proof of income, such as recent pay stubs, tax returns, or bank statements. The general rule is that a tenant’s income should be at least three times the monthly rent, but this may vary based on local market conditions.
Landlords can also contact the tenant’s employer to confirm their employment status and income. This step adds an additional layer of security, ensuring that the information provided on the application is accurate. However, it’s important to inform tenants that their employment and income will be verified.
Checking Rental History
A tenant’s rental history is another critical factor in the screening process. Landlords should reach out to previous landlords to inquire about the applicant’s behavior as a tenant. Questions to ask include whether the tenant paid rent on time, how they treated the property, and whether they complied with lease agreements.
It is also worth checking if the applicant was involved in any disputes with neighbors or landlords. A history of frequent evictions, complaints, or lease violations could be red flags that indicate potential problems. On the other hand, a positive rental history can provide reassurance that the tenant will be responsible.
Conducting a Criminal Background Check
Running a criminal background check is another step that landlords in New Hampshire can take to assess the suitability of potential tenants. However, landlords must be careful to follow fair housing guidelines when evaluating criminal records. The U.S. Department of Housing and Urban Development (HUD) advises landlords to avoid blanket policies that automatically disqualify applicants with a criminal record.
Instead, landlords should consider the nature of the offense, how long ago it occurred, and whether the offense poses a risk to other tenants or the property. For example, a conviction for a non-violent offense from many years ago may not be a valid reason to deny a tenant. Landlords should evaluate each case individually and avoid making discriminatory decisions based on criminal history.
Handling Security Deposits
New Hampshire landlords are permitted to collect a security deposit, but the amount is limited to no more than one month’s rent. This deposit is meant to protect landlords in case of unpaid rent, property damage, or other lease violations. Landlords must provide tenants with a written receipt for the security deposit and keep it in a separate, interest-bearing account.
At the end of the lease, landlords have 30 days to return the security deposit, along with any accrued interest, to the tenant. If there are any deductions for damages or unpaid rent, landlords must provide an itemized statement explaining these deductions.
Communicating Rejections
If a landlord decides not to rent to an applicant based on information obtained during the tenant screening process, they are required to follow certain legal procedures. Under the Fair Credit Reporting Act (FCRA), if the decision is based on a credit report, the landlord must provide the applicant with an “adverse action notice.” This notice should include the reason for rejection, contact information for the credit reporting agency, and details about the tenant’s right to dispute the report.
Providing clear communication when rejecting an applicant helps ensure transparency and compliance with the law. It also reduces the likelihood of misunderstandings or complaints from applicants who were not selected.
In conclusion, following proper tenant screening procedures is essential for landlords to protect their property and ensure they find reliable tenants. By adhering to New Hampshire rental laws and implementing best practices like verifying rental history, conducting background checks, and following fair housing guidelines, landlords can minimize potential risks and legal issues. A thorough and lawful screening process sets the foundation for a successful landlord-tenant relationship in New Hampshire.
