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    Screening Applicants – Order in Which Received

    Must landlords and property managers screen applicants in the order in which they were received?

    In a single word: no. But don’t stop there, because the full answer is a bit more complicated and absolutely necessary to absorb. Although no federal, Michigan, or local fair housing laws specify a first-come-first-served basis for tenant application processing, there are a host of other important factors to consider. In short, to avoid the appearance of discrimination, all landlords should strive to screen applicants in the order in which they were received as a standard practice. Let’s explore why this is the case.

    While it is true that no law specifies the order in which applications for housing must be processed, there are a number of other considerations that make first-come-first-served the best option for any landlord or property manager. These considerations all fall under the umbrella of Fair Housing.

    What Is Fair Housing?

    In a nutshell, it is the guaranteed right for people to choose housing free from unlawful discrimination. Laws from the local on up to the federal level are designed to protect everyone from discrimination during the transactional process for all housing, from rentals to sales to financing to insurance. These laws ensure equal access to housing for everyone, regardless of age, ethnicity, religion, level of physical ability, and many other factors. They enshrine for everyone the right to choose the housing that best suits their needs, removing many historical barriers from the process.

    The goal is the proliferation of equitable, diverse, and open neighborhoods, fostering a better sense of community and shared stewardship of the space we live and share. Because equal access housing and improved quality of life have been shown to rise in tandem, these laws are an important backbone for retaining and growing solid communities in which residents are eager to invest.

    Fair housing laws take the guesswork out of the equation for everyone, offering criteria to guide real estate agents and brokers, developers, building owners, condominium associations, individual homeowners selling their homes, banks and other financial institutions, rental managers and leasing agents, advertising agencies, and insurance companies. These laws clarify exactly which protected classes cannot be factored into housing transactions, simplifying things for everyone involved.

    Protected Classes

    Here is where the practicality of fair housing laws comes into play. At every level – federal, state, city – protected classes of people are specified. This is where we see exactly which bases cannot be used in consideration for housing. As you look over the list, you’ll notice that the more local you get, the more protected classes you’ll encounter. Each layer of the law helps enshrine fair housing for a wider array of people. The following is a comprehensive list that precludes any ambiguity in the law.

    At the federal level, we see:

    • Race
    • Color
    • Religion
    • National origin
    • Gender
    • Disability
    • Familial status

     

    Michigan law adds:

    • Age
    • Marital status

     

    Here in Grand Rapids we also have:

    • Creed
    • Ancestry
    • Source of lawful income
    • Public assistance recipient status
    • Gender orientation

     

    What are these classes protected from? The law guides us through a breakdown of exactly what actions are prohibited.

    Within the realm of rental and sales of housing, the following actions cannot be taken based on any protected class listed above:

    • Refusal to rent or sell
    • Refusal to negotiate housing
    • Denying a dwelling or making housing unavailable
    • Setting specific, different-than-normal terms and conditions on a sale or rental
    • Falsely denying the availability of housing
    • Persuasion of owners to sell or rent
    • Denial of access to facilities and services

     

    When it comes to mortgage lending, the following actions are similarly prohibited based on protected class:

    • Refusal to make a loan
    • Refusal to provide documentation about loans
    • Imposition of specific, different terms and conditions on a loan
    • Discrimination in the appraisal process
    • Refusal to purchase a loan

     

    Beyond these prohibitions, it is important to note that it is illegal to threaten, intimidate, or interfere with anyone exercising their fair housing rights or anyone assisting those who are exercising that right. Additionally, landlords, property managers, and building owners may not advertise or make any statement that indicates preferences based on any of the above listed protected classes.

    Depending on your local municipality, you may need to seek clarification on the full range of protected classes to take into consideration as a landlord. Armed with this knowledge, you can far better tackle the application screening process in a fair, nondiscriminatory manner. But here is where we get to the complete answer to the question at the top: although the law does not require it, why are you encouraged to screen applicants in the order which they were received?

    First-Come-First-Serve Is Best

    Keeping in mind that landlords and property managers cannot reject applicants because of race, religion, gender, and the rest of the protected classes listed above. Going through all applications in the order they were submitted avoids accusations of discrimination and circumvents biases. There are a handful of reasons why.

    First of all, we must acknowledge that everyone has inherent biases – whether conscious or subconscious – that should not come into play when it comes to housing applications. While we accept inherent bias as a fact of human life, we must do our best to render it inconsequential here. Choosing to screen applications in simple numerical order means that we are not skipping through the roster of applicants, allowing our emotions and biases to affect our decisions. We are simply taking them as they come, and screening them using the same criteria across the board.

    Taking applications on a first-come-first-serve basis helps encourage consistency in treatment between applicants in similar situations. With an established process in place, the chance of unintentional fair housing violations is minimized. But what happens when a fair housing violation is perceived even when it did not occur? Even when the possibilities of actual violations are minimized, there are secondary risks to account for.

    Screening applications in the order in which they were received will also act as a bulwark against possible discrimination claims. Even in cases where no bias comes into play, rejected applicants can perceive the process differently. In the event that a rejected applicant files a discrimination claim, a paper trail of consistent, fair, chronological application screening will help any landlord or property manager. Being able to readily display a history of consistent, legitimate, nondiscriminatory housing decisions will always put you in the best position possible.

    Summary

    Circling back to our original question, we can see clearly that, although there exists no single law specifying the order in which housing applications must be processed, fair housing laws work to make it the best practice possible. Landlords and property managers could trust themselves to avoid bias and discrimination, but human nature and perception factors will always come into play. Regardless of how fair we think we are being, there exists the possibility that our actions in this process could be questioned and considered discriminatory by rejected applicants. So for all intents and purposes, you are highly encouraged to treat the application screening process as a first-come-first-served situation. It minimizes bias, streamlines the process, and defends against claims of discrimination against protected classes. There’s no reason to do otherwise.

     

    Disclosure: This Knowledge Base article is accurate as of the last update. Laws and policies are subject to change. If you have any questions, please call the office. Click here for contact information.