Over the last decade, Craigslist has emerged as the preeminent rental property hub on the internet. As a quick, free, and convenient way to find rentals, it has attracted the lion's share of traffic for the online rental listing market. Don't let the low barriers to entry fool you, though; posting your ad can land you in the courthouse (or even jailhouse) quick if you don't mind your p's and q's when posting, negotiating, and signing your lease.
1. Don't use discriminatory language in your ad. The Fair Housing Act protects seven classes in the housing arena: race, color, national origin, religion, sex, familial status, and handicap. Mentioning a preference for or against any characteristic in these listed categories is enough to put you in violation of the FHA, even before you've reached the point of rejecting a candidate. There is an exception in the cases of shared-housing (roommates), but as a general rule, try to keep your ad as neutral as possible. Better to have to screen a few applications than run into a costly (up to $10,000) suit just because you worded your ad wrong. Obviously, these protected classes apply to any applications you actually reject as well.
2. Screen Your Applicants. Screening potential tenants for credit, criminal, and eviction histories is not only prudent from a business perspective, it can give you legal cover in court if the tenant subsequently causes harm to others. Courts have found that landlords have a duty to all their tenants to properly screen new tenants, and held landlords who neglect this duty liable for huge damages when the new tenant harms someone else. Check out this story, where a court awarded $132,000 to the family of a grandmother who was killed by a drug addict tenant who the landlord failed to screen.
3. Don't make unnecessary promises. Not every potential client you hear from will be able to meet your demands for an application, rent or deposit right away. This is fine, but avoid promising to such applicants, either verbally or in writing, that the deal is done or that you will hold the apartment for them. If you do, the tenant can later claim that you either accepted their offer, creating an enforceable contract, or made them rely on your broken promise, which allows them to recover money for any damages they suffered because you broke your promise. Also be wary of accepting deposits or money prior to the contract signing, as these can create an option contract that legally obligates you to keep the offer open to that applicant, even if there are other applicants ready to close.
4. Don't lie. Don't even fudge the truth. Advertisements that are misleading, even if literally true, can be considered false advertising. False advertising can land you a $2500 fine and six months in jail.
Always sign a contract. Even for short-term sublets or roomshares, a written contract is the best evidence in case of a later dispute. It isn't hard to draft up a simple contract that outlines key terms (rental amount and due dates, period of the lease, deposit, etc.), and templates can easily be found searching online. Be sure to read over any pre-written contracts, though, and adapt them to meet your needs.
Remember, no matter what section of Craigslist you are browsing, always be careful and use protection!
Ken Tran is a legal consultant for http://www.leasely.com. Ken received his J.D. from the University of Michigan Law School and has practiced at a private law firm and in the non-profit sector. Leasely screens your tenants for you.
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