October 2023 Coach's Quiz
A rental applicant who’s been unemployed for months gets all of her income from welfare and alimony payments. After calculating her income, you determine it’s not enough to meet your community’s income requirements. The laws of your state ban discrimination based on lawful sources of income. Must you accept the applicant?
a. No, as long as you consistently reject other applicants who don’t meet your income requirements
b. Yes, because rejecting her would be discrimination based on her sources of income
c. No, because applicants who don’t have steady jobs are too great a financial risk
In a city where source of income discrimination is illegal, you can reject a prospect with a Section 8 voucher because he’s unemployed and doesn’t meet your minimum income requirements.
COACH’S ANSWERS & EXPLANATIONS
Correct answer: a
Reason: Rule #8 applies here:
Rule #8: Consistency Is the Key
Source of income restrictions simply mean that if an applicant has the lawful funds to pay her rent each month, you can’t reject her simply because you object to where those funds come from. What they don’t require you to do is accept an applicant with insufficient income. So, a is the right answer.
Wrong answers explained:
b. is wrong because an insufficient amount of income, regardless of source, is a legitimate, non-discriminatory reason for rejection as long as you consistently apply the income standard with all prospects. Stated differently, the ban on source of income discrimination doesn’t require you to reduce your normal income standards based on their income sources.
c. is wrong because requiring applicants to have a steady job is a form of source of income discrimination that the laws ban. As long as applicants can get the money they need to pay rent from legal sources, the source of that income is none of your concern.
Correct answer: b
Reason: Rules #5 and #6 apply here:
Rule #5: Don’t Require Prospects to Be Employed
Rule #6: Beware of Imposing Minimum Income Requirements
As a landlord, you have a legitimate interest in verifying that your tenants have ample income to pay rent. Requiring tenants to be employed and earn at least a specific amount of income each year are two ways to accomplish that goal. However, if a tenant has a Section 8 voucher, it means that the government has determined that he has enough income to pay his portion of the rent; the rest of that money will come from the government. In other words, you can be sure you’ll get paid in full each month. And that’s all you need to know. Whether the tenant is employed and how much he makes each year are none of your concern. So, when you ask about these things, you’re delving into the sources of the tenant’s income. And in so doing, you’re risking liability for source of income discrimination, especially if your state or municipality bans the practice. So, the answer is b., false.
See The Lesson For This Quiz
|Source of Income Discrimination Liability Risks & How to Avoid Them|