Three Things Every Landlord and Tenant Should Know About Steering

iStock_000004787361Small-300pxEarlier this summer, the U.S. Department of Housing and Urban Development (HUD) announced that a Pennsylvania landlord agreed to pay $25,000 to resolve allegations that it discriminated against prospective tenants based on race. The claim was that the landlord’s agents allegedly directed white prospects to neighborhoods they believed were safe while showing black prospects apartments in less desirable, high-crime neighborhoods.

The practice at issue is quite common and is known as “steering.” Steering occurs when a landlord or agent guides or encourages prospects to live in a certain neighborhood, building, or even a particular section of a building based on a protected class (in this case, race) under federal (the Fair Housing Act), state, and local fair housing laws.

Very often, victims don’t know they’re being steered or don’t realize it’s illegal, and many landlords who engage in steering aren’t aware that they’re breaking any laws. Whether you’re a landlord or a tenant, here are three important points to help you get up to speed on steering:

  1. Steering may not be overt, but it’s illegal. In the recent Pennsylvania case, it’s not that the landlord was refusing to rent to prospects because of race. The claim was that the landlord was guiding people to different neighborhoods based on their race, with white prospects receiving more favorable treatment. Although less overt than other types of discrimination, steering is illegal because it limits tenants’ housing choices based on a protected class. Plus, if a landlord runs out of vacancies in the floor, building, or neighborhood to which he steers certain types of people, then the landlord would presumably start flat-out rejecting such prospects.
  2. Steering can happen with any protected class. Steering often involves separating people based on race, as allegedly occurred in the Pennsylvania case. But steering can (and does) happen with any protected class. For example, a landlord who avoids renting apartments in the main building of a complex to people who use wheelchairs because he’s afraid his property will “resemble a nursing home” is steering based on disability. A landlord who shows non-Christian prospects apartments only on certain floors is steering based on religion.
  3. Good intentions don’t make steering legal. Very often, steering is motivated by a dislike of a certain group of people and a desire to be exclusionary. But steering is illegal regardless of what’s fueling it. For example, the sight of a prospect using a wheelchair shouldn’t lead a landlord to assume she would be interested only in a ground-floor or accessible apartment. Also, a landlord can’t tell a family with children about vacancies in only one building because children live there. It’s up to the family to decide how important it is to have other families with children as close neighbors.

Learn More About Steering

For more information about steering and help with identifying it, check out my Nolo article, “Avoid Practicing Illegal Steering at Your Property.”

Can Landlords Benefit from Renter’s Insurance?

iStock_000015565844Small-300pxAs you read in the last post (see “Renting Without Insurance: Why So Many Tenants Do It,” August 29, 2014), renter’s insurance offers significant benefits to tenants. Most notably, tenants need renter’s insurance to cover losses to their personal property, since their landlord’s insurance only covers the building’s structure. Plus, renter’s insurance includes a liability component that can offer you coverage in case, for example, someone breaks a hip after tripping over a step in your apartment.

It’s no surprise that, true to its name, renter’s insurance aims to help renters. But does a renter’s insurance policy also benefit landlords? In other words, is a landlord better off if the tenants in the building have renter’s insurance?

The answer is yes. Although renter’s insurance is only for renters and landlords already have their own insurance, landlords nevertheless stand to benefit when their tenants also buy insurance. If a tenant gets compensated after a loss thanks to insurance, it’s more likely that the tenant will continue staying in the apartment and remain in a position to afford the rent. Plus, if a guest is injured and you’re found partly liable, you’ll feel better knowing your tenant’s insurer is there to shoulder the tenant’s costs.

How to Get Your Tenants to Carry Renter’s Insurance

Tenants are already paying rent, a security deposit, and other apartment-related fees and expenses. So, how do you get tenants to open their wallets again and purchase a renter’s insurance policy? You have two choices:

  1. Require it. Some landlords choose to require tenants to have renter’s insurance, citing the benefits to both parties. Sometimes, a landlord’s insurer actually imposes this requirement. If you decide to require tenants to carry insurance, you can add an addendum to your lease going forward. You’ll need to wait, however, until lease renewal with current tenants. If your property participates in an affordable housing program, be sure to check if the program rules bar you from requiring any additional financial outlays from tenants, such as renter’s insurance premiums. If you decide to require renter’s insurance, enforce it by giving yourself the right to ask tenants for proof that their policy is still in effect each year.
  2. Suggest it. There’s nothing stopping you from simply recommending renter’s insurance to your tenants. Since the reason so many tenants don’t carry a policy is they’re not aware of the option or they don’t understand the need, giving your tenants a little education about renter’s insurance without pressure may actually inspire them to buy a policy. You can spread the word by giving tenants information on renter’s insurance at their lease signing, in an e-mail to tenants, or as part of an issue of your property’s newsletter, if you publish one. Mention the benefits, point out the average cost ($15-$30 per month, according to the National Association of Insurance Commissioners), and provide a list of suggested insurer sites for tenants to go for more information about purchasing a policy, such as State FarmGEICOAllstate, and Progressive.

Renting Without Insurance: Why So Many Tenants Do It

iStock_000002694005Small-300px

In the wake of Sunday’s magnitude 6.0 earthquake that rocked northern California, it came to light that only 12% of California’s residents have insurance that includes earthquake coverage, according to a press release from the Insurance Information Institute.

But here’s an even more surprising statistic: According to a recent survey by InsuranceQuotes.com, only 40% of apartment tenants across the United States have any insurance coverage at all.

Short of an earthquake, there are many ways your belongings can get damaged or lost, such as by fire or as the result of a theft. Having a good renter’s insurance policy in place covers your personal property loss in many situations, plus it gives you liability coverage for times when a guest trips and breaks a leg in your apartment.

What’s Your Reason?

If you’re an apartment renting without insurance, take a look at the common reasons why so many tenants don’t have a policy in place. If any of these reasons looks familiar to you, it may be worth revisiting the issue:

  1. You didn’t know it’s available. Some tenants get so caught up in the excitement, stress, or fatigue of the apartment search process that they don’t consider insurance. Others don’t think about renter’s insurance because they assume that insurance is only a homeowner’s concern. But renter’s insurance exists as an option to help compensate tenants for property damage and injuries. Even if you never need to file a claim, knowing you have a policy in place can bring you valuable peace of mind.
  2. You haven’t gotten around to it. Did you know you can compare renter’s insurance policies and buy one online? The process is probably easier and less time-consuming than you think. Just search the Web for “renter’s insurance” and then visit the sites of top insurers to determine coverage and pricing. As a tip, if you already have automobile insurance, a good place to start is to check your auto insurer’s Web site to see if it also offers renter’s insurance coverage. Maintaining two or more policies with the same insurer may qualify you for a multi-line discount.
  3. You think your landlord’s insurance is all that’s needed. Picture what your apartment looked like before you moved in. That’s what’s covered by your landlord’s insurance. All the stuff you love that you brought with you to the space, from the living room sofa to the flat-screen TV, would be covered only by a renter’s insurance policy. Plus, don’t forget that renter’s insurance also has a liability coverage component, which can save you thousands of dollars in the event someone gets hurt.
  4. You don’t want to spend the money. You may be pleasantly surprised to discover that renter’s insurance costs less than you thought. Like other types of insurance, the premiums depend on the level of coverage you select and your deductible, but the average policy costs only between $15 and $30 per month, according to the National Association of Insurance Commissioners.
  5. You believe the chances of something happening are so slim. Hopefully, you’ll have nothing short of an enjoyable apartment living experience. But keep in mind that a crime or other loss can occur at any type of rental property. Even if you live in a gated community or low-crime area, that’s no guarantee that a crime won’t occur. Plus, keep in mind that a criminal can be a neighbor, a neighbor’s guest, or even a tenant’s own guest.
  6. You think it’s not worth the bother because you’re just renting for a year or so. As mentioned above, obtaining adequate renter’s insurance is a fairly quick and easy process. Also, a policy provides the same coverage every day for as long—or as little—as it’s in place. So, if you rent an apartment for only a year, you’ll only pay premiums to cover that time period.

When Landlords Get in the Way of Their Own Success

iStock_000022102932Small-300px

As a landlord, it’s important to learn as much as you can about specific situations and what to do to steer clear of potential liability lurking behind each one. That said, it’s just not possible to know all the answers all the time, given the complex legal landscape and changing laws. For example, did you know that if you order credit reports as part of your tenant screening, you can get into trouble with the federal government if you don’t follow certain rules for the disposal of the reports when you’re done with them? Even if you were aware of this, chances are there’s something else you don’t know.

So, what’s a prudent landlord to do?

While it’s certainly important to strive to learn as much as you can about specific situations and laws that pertain to your business, even better advice is to run your property in a thoughtful and careful way. This way, you keep a watchful eye on liability traps while always taking time to seek answers, strategies, and solutions as new or challenging situations arise.

In the last Roundup, I took a look at risky behaviors that tenants commonly engage in (see “Elevator Surfing and Other Bad Ideas,” August 15, 2014). Unlike tenants, landlords have a business to run, which means they have even more at stake. A poor decision or a rush to action can jeopardize the integrity of a rental property and the safety of those who live in it, not to mention the business’ bottom line.

Here are top ways to ensure that your behavior or procedures won’t lead to problems at your property:

  1. Not always following the law. Before taking any adverse action, consider whether you’re at liberty to do so. Some landlords know what’s required of them yet they take the law into their own hands because they want a speedier path or more favorable outcome. For example, rather than follow the judicial process to evict a tenant, some landlords engage in “self-help evictions” by shutting off utilities or even removing tenants’ belongings from their apartment and then changing the lock. Other landlords don’t follow the law simply because they didn’t think about whether there might be any laws that apply to the situation. For example, since trespassing is illegal, some landlords assume it’s okay to set traps for trespassers, but the law imposes at least a minimal duty on property owners to not intentionally harm trespassers. If you find yourself in a situation in which another person’s rights are affected, there’s a good chance there’s an applicable law.
  2. Taking too long to respond to issues. Too often, particularly when it comes to property ownership, problems arise from inaction. For example, delaying repairs to a small leak in a tenant’s refrigerator could yield a much costlier bill down the road, when you must deal with a large leak that has caused substantial property damage. Similarly, when several tenants complain about a harassing neighbor and you don’t respond, you may find yourself later responding to a lawsuit claiming you should be held liable for harm suffered after the neighbor has committed a crime.
  3. Not protecting yourself. The last thing you want is to do everything right but still have to pay in the end. Don’t rush to throw away important documents, such as recent tax returns and key compliance documents if your property participates in an affordable housing program. Also, keep good written records to ward off unfounded claims of discrimination. For example, keep an apartment availability log that backs you up should a prospective tenant claim you didn’t tell her about all available apartments. If you decide there’s a valid reason to make an exception to a house rule, document the reason or modify the rule itself so that you can be sure to make exceptions consistently going forward.

Elevator Surfing and Other Bad Ideas

433766_63731070-300pxThere are plenty of things that landlords and tenants can and should do to improve various aspects of their rental experience. For example, landlords should follow tips for safeguarding apartment keys while tenants should take steps to protect themselves if a roommate pays rent late. But a recent report about a New York City man’s tragic elevator surfing death is a reminder that it’s also important to be aware of what shouldn’t be done because of the risks involved.

Elevator surfing is the term for an “urban sport” in which the participant rides on the roofs of elevators, sometimes taking it further by jumping between cars or riding a counterweight, according to reporting by Vocativ. Of course, not only does the surfer risk his life, but the unnatural strain that such an activity places on a building’s elevator equipment can lead the elevator to malfunction, putting all tenants’ safety at risk.

Don’t Try These at Home, Either

While refraining from elevator surfing and other clearly reckless activities is wise, there are far less extreme activities and habits that tenants commonly engage in that also create serious risks. If any of these examples are familiar to you, you may wish to rethink your behavior to help ensure a safe tenancy:

  1. Keeping your apartment door ajar. Many tenants leave their apartment door slightly open, or they turn the deadbolt to prevent the door from shutting, when they’re leaving their apartment to run a quick errand, such as check mail, tend to a load of laundry, or resolve an issue with a neighbor. This makes it easier to return without having to fuss with your keys or even turn the doorknob, which could be difficult if you’re carrying a laundry basket or package. Although keeping your door open is convenient, consider the risk before you do it. If you’re just walking down the hallway to drop off bottles for recycling, that’s one thing. But an errand on a different floor may run longer than you anticipate, and in the meantime the door to your home is unlocked, open, and unattended.
  2. Heating your apartment with your oven. When the outside temperature plummets and your apartment heat isn’t working as well as it should, it’s tempting to try to seek warmth any way you can. Insufficient heating in the winter is a serious matter that you should bring to your landlord’s attention to get fixed immediately. Until it’s fixed, you may need to dress in additional layers, buy a space heater (or borrow a friend’s), or even spend the night elsewhere, if the cold is unbearable. But don’t consider turning on your oven and leaving its door wide open overnight as a heating alternative. Although it may raise the mercury a bit, the risk of fire and accidental injury isn’t worth it.
  3. Letting anyone gain access to your building. Criminals and others who have no business at a rental property often manage to gain access by taking advantage of a tenant’s lax attitude with the intercom system or fear of coming across as rude when it comes to holding entryway doors for the next person. If you’re quick to buzz people into your building without checking who they are or you make a habit of assuming that the person behind you as you enter your building has the right to do so, keep in mind that you may be opening the door to crime.

Tenants aren’t the only ones who can unwittingly cause harm or create problems at a rental property through their actions. Landlords, too, should avoid certain behavior so they may keep their tenants safe, their property sound, and their business running profitably. If you’re a landlord, stay tuned for some common yet risky behavior patterns to steer clear of, coming up in the next Roundup.