Laws are always changing in the real estate market, and legislation is in place to protect residents and investors. They can often become complicated, and you have to pay attention to the changing requirements and the rules for compliance. If you don’t understand what’s being said in the legislation that pertains to you and your property, you can run into some trouble.
We aren’t lawyers and we’re not giving legal advice. But, we are experts in Portland property management, and today we’re talking about the Fair Access In Renting (F.A.I.R.) laws that are now in effect in Portland. They cover everything from upfront advertising to resident screening to security deposits.
Specifically, we’re looking at what they mean for your advertising process today. These new laws are onerous, and the ordinance starts with advertising. There are some clear rules and regulations that are now in place, and you’ll probably find them restrictive.
Application Waiting Period for Multiple Units
If you have multiple units on the rental market in Portland, and you’re advertising units in duplexes or four-plexes or apartment buildings, you’ll have to follow a 72-hour waiting period before you can take and approve any applicants.
You’re also required to advertise your entire range of properties, including the numbers of bedrooms and bathrooms you’re offering, and the specific rent prices for each unit. This is fairly common anyway, but there are now specific requirements for how you accept applications from prospective residents.
Every application that you receive must be date-stamped, and there’s an order that you have to put each application in when you’re screening. If someone applies early, you have to assume they applied eight hours after you advertised the home. And, if you have applicants who need accessible housing, you need to move those applications to the front of the line. So, if you previously just screened applications as you received them, that process now has to change.
Screening Criteria in Portland
Rental property owners have a choice when it comes to the criteria they use for screening applicants. And, you have to disclose in your advertising all of the criteria you’re using to screen applicants. There’s a lot of information to cover. You’ll never be able to list all of your standards and requirements inside of a rental ad. So, you’ll have to link to a URL or a website or a Google document so that potential residents can review your rental requirements.
Post all of the information with your rental criteria, including the right to accommodation and the rights that residents have while they are applying and throughout the leasing period.
Resident Types: Financially Responsible and Non-Financially Responsible
There are also two types of applicants right now. You will have people applying as financially responsible applicants and as non-financially responsible applicants.
This will almost certainly change your screening and application process. In the past, when you had more than one person applying for a property, you probably screened each applicant the same way; holding them to the same financial, credit, and income standards. That’s not something you can necessarily do anymore.
Your application will need a checkbox where you can allow applicants to indicate whether they are financially responsible for paying the rent. There will be another checkbox where applicants can indicate that they are not financially responsible; that the other party with whom they are applying will be financially responsible.
Here’s how it may look. Maybe a husband and wife are applying to rent your home together. You can run a criminal background check on both applicants. But, if only one of them is financially responsible, you can’t run a credit check on the non-responsible applicant. Perhaps the husband earns enough income to qualify on his own, but the wife has some credit problems and not a lot of income. Historically, you might not approve this application. Today, you have to accept them as residents even though one party may have a questionable financial history.
This should sound some alarm bells. It completely revamps your selection process and impacts the way you screen applicants.
So, if you own a rental property, you have some new rules about how you advertise your property and the way you screen your applicants. You cannot fill your units for three days after you begin advertising so that you can prioritize the applications that come in. On single-family homes, this does not apply. But, on a multi-family property, you have to be mindful of accessible units and people with disabilities who may be applying for them.
Obviously, these changing laws can seem like it’s becoming harder and harder to be a landlord. Investing in Portland is still a great idea, just make sure you’re working with professionals who can help you navigate these laws and the requirements of being a landlord. Unless you’re an expert yourself, you really need professional Portland property management.
The laws can change all the time. What you thought was true last year isn’t necessarily true this year. There are serious financial applications to how you’re running your business. Educate yourself before you make a mistake.
Contact us at Mynd Property Management if you want to talk through any of these new laws or if you need help with your advertising process. Educating rental property owners is what we’re good at, and we’d be happy to help you.
You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.