Avoiding discrimination when selecting a tenant
Young professional couple? No pets? Non-smoker? These are just some of the questions that some landlords may think about when preparing to rent their property out.But beware; some criteria may land you in hot water with a breach of anti-discrimination laws or state residency legislation.
Although you have the legal right to select the most suitable tenant for your property, it should only be based on economic factors such as number of people suitable to reside in the property, demonstrated ability to maintain the rent, and proven capacity to preserve a rental property in a neat and tidy condition. Although there is some variance state to state, unfair discrimination can occur when you treat someone less favourably because of their sex, age, race, nationality, marital status, number of children, sexual preferences, disability or impairment, religion, or political beliefs.
You also need to be careful of your state’s Residential Tenancies Act as some criteria can fall under this rather than anti-discrimination laws. For example, you may think it’s wise to ask tenants who are under 18 to provide an adult guarantor (should they fail to meet payments). However in NSW it’s illegal to ask for a guarantor, whereas in WA it is perfectly acceptable.
At every step of the leasing process, you must ensure that you abide by the relevant legislation. Some examples of possible breaches include:
- Advertising the property as “not suitable for children”
- Evaluating an application differently based on the religion of the applicant (e.g. because of previous bad experience)
- Changing the terms on which the property is offered by setting a higher bond, (e.g. because the tenants are under 21 years of age)
- Evicting a tenant because they wish a friend to move in with them who requires a guide dog
- Refusing to extend or renew a tenancy because the tenant is now pregnant
The consequences of discrimination include being ordered to pay compensation, which can be thousands of dollars, and often both the property manager and the landlord will be held accountable.
With this in mind, it’s advisable to become acquainted with the relevant legislation in your state and trust your property to a managing agent who is trustworthy and up-to-date with current legislation.