Landlords consider many factors when deciding who to rent to. Until recently, that decision has been largely at the property owner’s discretion. But recent legislation has introduced new changes to screening criteria that landlords must keep in mind. This policy, put into action by Portland’s City Council in March, is intended to help all applicants get a fair shot at good housing.
When you’re choosing a tenant, there are certain things you consider. You want someone responsible, who will take good care of your property and not cause any issues for other renters. At the heart of it, you want someone you can trust. But when all you have to go on is what a tenant looks like on paper, it can be difficult to make that call. For some potential tenants, an eviction several years ago could make finding good housing nearly impossible.
Commissioner Chloe Eudaly, who championed the new measure, called it the most comprehensive reform of its kind in the country. Here’s what landlords need to know about following Portland’s new rental screening criteria.
Financial Barriers are Now Lower
Many of the changes to the screening process focused on financial barriers. As a landlord, the first question on your mind is whether a potential tenant can make rent. But sometimes a person’s financial history doesn’t paint an accurate picture of their current situation. Sometimes it can be unfairly prohibitive.
With the Portland rental market so competitive, landlords can be picky about which tenants they rent to. One red flag, even from years ago, can quickly disqualify an otherwise qualified renter. That is part of what the new restrictions seek to address.
A landlord can no longer deny a renter’s application on the grounds of a credit score lower than 500. Insufficient credit history is also no longer a valid reason to reject an application. Furthermore, landlords cannot require tenants to make more than two-and-a-half times the cost of rent in income.
Another item the new regulations address is past evictions. Portland’s new ordinance limits screening for court-ordered evictions to the past three years. Oregon Senate Bill 608 also addressed evictions by including severe restrictions on no-cause evictions after the tenant’s first year.
A New Time Limit For Criminal Convictions
When selecting a new tenant, you want to be sure you’re not putting your other renters at risk. A history of criminal convictions is an obvious red flag. But people looking to move past their previous mistakes can be penalized for years after they’ve repaid their debt to society. Finding a good job and stable housing can become nearly impossible. The new city ordinance attempts to address this by giving people with a rocky history a chance to move forward.
By federal law, landlords can deny an application if a criminal history raises concerns about keeping other tenants safe. This new ordinance limits felony background checks to seven years and limits misdemeanor checks to three years.
First Come, First Served
A few other details impact how landlords must consider tenants from now on. A property listing must be posted for at least 72 hours before a landlord may begin selecting a tenant. Once the selection process begins, it must take place in the order the applications were received. The legislation also prohibits landlords from contacting prospective tenants before that 72-hour window has ended. This decision was contentious, and some claim it is a violation of free speech. Whether the courts will uphold that claim remains to be seen.
Landlords Can Use Their Own Screening Criteria
These restrictions are very specific, but there are other options. Landlords are permitted to substitute their own screening criteria in lieu of city requirements. However, in such cases, landlords must also provide the applicant with a written notice of denial explaining why the application was rejected.
This alternative does allow for some flexibility, but at a cost. The administrative headache of explaining each tenant rejection makes this route impractical. There are even some landlords claiming that the new ordinance is unconstitutional. A lawsuit filed this year claimed that the policies were too vague, and the penalties for non-compliance too steep. However, the judge ruled that the lawsuit was filed too late to delay the ordinance, so for now, the screening changes are active.
Other Screening Considerations Remain The Same
In addition to these new changes to Portland rental screening guidelines, the same anti-discrimination laws remain in place. Landlords cannot show preference based on race, gender, religion, or other protected categories. Rental requirements and standards must remain consistent across all applicants.
The details can get complicated. Limiting a two-bedroom apartment to two occupants, for instance, can be considered discriminatory against families. So it’s important to familiarize yourself with the ins and outs of screening policies on both a state and federal level. The best way to remain compliant is to stay up-to-date with the regulations. By doing so, landlords can protect themselves and their renters while ensuring that everyone has a fair shot at housing.
There’s Always More To Learn
If you still have questions about Portland’s complex screening changes, we’d love to help you get some answers. If you’ve ever thought that things would be so much easier if you didn’t have to stay on top of the ever-shifting legal landscape, we’re here to help.
At Rent Portland Homes by Darla Andrew, we keep our fingers on the pulse of Portland’s rental landscape and handle all of the tenant screening details. With our team on your side, you can make money from your rental without keeping up to date with ever-shifting screening requirements. You can call or text us anytime at (503) 515-3170 or reach out through the contact page on our website for more information.