With many different laws governing service animals, it can be confusing as to which ones apply to housing providers and what they are allowed to ask. This article will review the different laws that come into play, highlight which ones directly affect housing providers, and share tips to help you navigate this sometimes confusing process.

Does the ADA Law Apply to Housing?

Even though the ADA is very important, it doesn’t apply to housing except for maybe the leasing office as it is a public place. Generally, ADA laws apply to operators of public places like Target. The ADA also limits the types of animals providing support to dogs or, in rare cases, miniature horses, which we are not allowed to do as housing providers.

This is where some confusion can take place. The ADA limits what business owners can ask regarding the animal to: “Is that a trained service dog?” and “What work is the animal trained to do?” They are not allowed to ask for written verification.

So when housing providers ask for verification of need, often they are met with the resident referencing this law and stating that they do not need to provide proof of need. This leaves us with the task of informing them that this applies under the American Disabilities Act, but the ADA does not pertain to housing and that the Fair Housing Act permits verification when the disability and the need for the animal are not observable.

For example, if you can see that the animal is a guide dog, then you shouldn’t be asking for verification. But if it’s a dog that is a service animal for disabilities such as hearing problems or alert someone that they’re about to have a seizure, you can’t see that when you talk to the resident. In that case, you can ask for verification. And if they say to you that’s not permitted, then you have to clarify: “I’m asking you this not under the Americans with Disabilities Act, but under the Fair Housing Act.”

HUD and Support Animals

HUD defines support animals that do work, perform tasks, provide assistance, or provide therapeutic emotional support for individuals with disabilities.

HUD also clarifies the difference between domesticated animals kept in the home (traditional) and non-traditional unique animals such as goats, pigs, chickens, snakes, etc. HUD states that the resident has a substantial burden to be able to show that they need a unique animal as an assistance animal. Now, it is not impossible to justify a unique animal. Still, they’re going to have to explain in more detail than with a usual animal why they need their snake as an emotional support animal.

HUD also addresses multiple animal requests, again placing the burden of proof on the verifier as to why one animal isn’t enough. HUD has also made it very clear that going online and getting your pet registered or certified on some website by paying money is irrelevant to the question of whether this is an assistance animal that should be approved to live in housing as a reasonable accommodation. If someone hands you one of those registrations or online certifications, you can hand it back to the resident and let them know that it is not adequate to verify their need for an assistance animal.

HUD has made it very clear it considers those websites as taking advantage of people— wasting their money—because those registrations are irrelevant to the question of whether you approve their reasonable accommodation or not.

The Fair Housing Act and Reasonable Accommodations

We have discussed how the ADA—while important—does not apply to housing, reviewed HUD guidelines that create the framework for how housing providers should view assistance animals and what they are allowed to ask. But how does that come together with the Fair Housing Act?

When we look at the Fair Housing Act and Section 504, we don’t care whether an animal is a service animal or an emotional support animal. It doesn’t matter; we don’t need to ask different questions. We only want to know if the resident is disabled, meets the definition of disability, and if that animal is necessary to assist them because of their disability. That’s all we need to be concerned with when you’re verifying a request for a reasonable accommodation.

When your property is looking at a request for an assistance animal, you need to have a very detailed procedure that all staff follows. First of all, the process should be done in writing, complete with a section for the verifier. To be a reliable verifier, the verifier has to have personal knowledge about the resident and should be providing the resident with medical or mental health services, and not merely providing a verification letter or filling out a form.

Suppose you find yourself in the situation of turning someone down because you don’t think their verification is reliable. In that case, you need to conduct a meeting explaining why you are not going to accept or grant their request and attempt to resolve their request; of course, documenting everything along the way.

Fair Housing and Assistance Animals Final Takeaway

As we have discussed, there can be a few pitfalls to understanding the different laws that come into play regarding assistance animals and housing. Regular training is essential to help everyone know which laws apply and how to follow them to ensure fair housing compliance.

Are you looking for new renters and thinking of extending a lease to military tenants? We salute you! However, you need to know what to expect when you enter into a lease with military personnel. Here’s where to start.

How Do I Rent to Military Tenants?

Renting to military tenants can be beneficial for your property management business and offer more reliability. However, it does require a different strategy than renting to traditional tenants. Legally, military personnel are not responsible for the financial burden of breaking a lease due to a deployment or change in orders that involve a relocation.

1. Make Your Lease Military-Friendly

Before you finalize your lease details, make sure it’s military-friendly. Military personnel need accommodations for deployments and flexibility. In some cases, they will have noticed before deployment, though they may only have days or weeks before relocating.

Change the lease length or terms to accommodate deployments and make your apartment as military-friendly as possible.

2. Change Your Rental Price

Landlords who want to attract military renters need to accept Basic Allowance for Housing (BAH) stipends as payment. The BAH depends on the location, local cost of rent, personnel pay grade, and whether or not they have dependents.

If you require renters insurance for your tenants, keep in mind that BAH does not cover it. You may want to include it as part of your lease agreement or adjust the rent slightly to ensure your military renter can pay for it.

3. Provide Military Perks

Military perks are attractive to renters looking for a good deal for off-base housing. Offer a military discount on your listing and consider waiving other costs like security deposits, cleaning fees, and application fees.

Are You Legally Required to Rent to Military Members?

Depending on your rental property’s location, you can legally refuse a military member a lease if you decide it isn’t suitable for your rental business.

The federal government does not consider military status a protected class under the Fair Housing Act. If you are worried about the potential loss of income due to deployments or a change in their orders that could suddenly impose relocation, you can refuse to rent to a military member.

However, some local and state laws may have different stipulations. Connecticut, Illinois, Massachusetts, New Jersey, New York, Ohio, Rhode Island, and Washington currently have fair housing protection based on military or veteran status. Before denying a lease, it’s best to check with your state laws.

Disabled veterans are protected under fair housing laws, and you cannot refuse to rent to them due to their disability.

Things to Consider When Renting to Military Tenants

Renting to military tenants comes with its own set of pros and cons. Here’s what to know before you sign your next renter.

Reliable Income

Military personnel typically enjoy reliable income and job security. Their promotions and incremental raises are usually more predictable than other industries. The addition of a Basic Allowance for Housing (BAH) stipend also makes your rental payments more secure.

You Can Participate in the Military Housing Rental Program

Service members enjoy access to a Rental Partnership Program (RPP) in an agreement with the Housing Service Center (HSC). The program provides military members with affordable off-base housing and aid in reducing some costs associated with relocation.

Have a Large Network to Tap into For Future Renters

Military members have a large built-in network of potential renters. When you need to line up new tenants, ask if their military connections have recommendations or could spread the word about vacant units.

Military Members Undergo a Thorough Background Check

Anyone who wants to join the military goes through an FBI background check at federal, state, and local levels. However, criminal records don’t always disqualify someone from joining the military. A serious felony or five misdemeanor offenses are usually disqualifiers for the military, while some misdemeanor offenses like domestic violence are automatic rejection.

Military background checks also look at potential money problems, including histories of bankruptcies or defaulted loans. The military will even look over social media accounts to ensure the prospective military members are not a threat to national security.

Despite the benefit of an in-depth military background check, landlords should still perform their own. There may be financial issues or areas that are a deal-breaker for you and your rental business.

You Can Develop a Tight-Knit Apartment Complex Community

If you have multiple rental properties and apartments available, you can create a tight-knit community by renting to military members. These tenants are uniquely adaptable to meeting new people, having each other’s backs, and fostering a sense of belonging.

May Move Abruptly

One of the biggest disadvantages to renting to military members is the risk they’ll suddenly need to move or deploy. They often don’t receive much notice and are expected to move quickly. Service members are also protected by the Servicemembers Civil Relief Act (SCRA).

The protection covers active-duty members and prevents landlords from evicting unless the rent is higher than a predetermined amount. In 2021, that amount is $4,089.62, but it changes yearly. One can stop a foreclosure without a court order, and the landlord cannot keep the tenant’s belongings or storage area without a court order.

In addition to SCRA, local laws may also prevent you from taking action if a military member breaks their lease. However, landlords can ask for proof of deployment or relocation orders before allowing service members to break their lease without financial repercussions.

May Not Be Long Term Tenants

Military tenants aren’t usually long-term. Even without deployments, military members tend to move around for their work. Although their finances are more secure, their location stability is not.

Landlords must factor in the costs associated with cleaning, prepping, and updating their apartments more often when renting to military tenants.

Final Thoughts

Renting to military members has its pros and cons. However, landlords may feel it’s their patriotic duty to welcome service members to their rental properties.

We may be apartment experts, but we’re not the final authority on renting to military members. Look to military.com to thoroughly understand military housing benefits, and consult with a lawyer when drafting your new lease terms.

Source: Apartment List

Turn on the news or browse the Internet these days, and you’ll immediately hear about interruptions to the supply chain caused by staffing shortages and health restrictions due to the COVID-19 pandemic.

If you go deeper down that rabbit hole, you’ll hear about how interruptions in the supply chain contribute to higher inflation and whether you should be concerned about inflation.

But what is inflation? And, what is the inflation effect on rent? We’ll answer these questions below and tell you when to increase rent on your income property.

1. What is Inflation?

Simply put, inflation is the decline of a currency’s purchasing power over time, and the inflation rate is the rate at which purchasing power declines annually or monthly.

Inflation means your dollar buys less than it used to over time, and, consequently, the price of goods and services goes up over the years.

Inflation is bad for consumers because they have to work harder to earn more to buy the same goods they did in the past.

If you’re a rental property owner, tenant boards allow landlords to raise rent legally to keep pace with inflation.

2. How Does Inflation Affect Rent?

Generally, inflation positively impacts rent for property owners because it means that they can increase rent, and therefore, the income they bring keeps pace with the rising price of goods. Inflation also benefits property owners because construction prices go up, which means fewer new rental properties are available.

Of course, inflation isn’t all positive for landlords because as their rental income goes up, so do their expenses. At the same time, rental rates tend to remain consistently on an upward trajectory during harsh economic times, which is why investing in property is seen as a good hedge against the effects of inflation and the rising cost of goods. Investing in real estate means you’ll always be able to keep pace with these costs.

As a nice bonus for rental property owners, inflation also increases the cost of housing, which means fewer people can afford to buy a home, increasing the demand for rental housing.

With increased demand and little supply, property owners are more likely to get the rental rates they’re asking for even if they’re a little high because even though goods and services may be more expensive. Everyone needs a roof over their head, and renting housing is generally cheaper than buying housing, even with inflation accounted for in both scenarios.

Source: Zillow Observed Rent Index (ZORI) (Seasonally adjusted); U.S. Bureau of Labor Statistics Consumer Price Index for All Urban Consumers (Seasonally adjusted); NAEH analysis. Recession data are from the National Bureau of Economic Research (NBER).

3. How Much Has Rent Increased in 2022?

The pandemic has forced many Americans to tighten their wallets and reconsider living arrangements. National rent prices increased by 11.3% in 2021 compared to the previous year. This upwards trend continued into the first few months of 2022, with larger cities experiencing double-digit growth.

New York, California, Florida, and Indiana have seen big spikes in rent prices. The monthly rent for a one-bedroom in New York City is up by 40%, and major metros in California charge up to 25% for a one-bedroom. Other cities in Florida are seeing increases for single bedroom units ranging between 24% to 30% from the previous year.

Rent price jumps are expected to continue, but some of the most expensive states to live in are slowly starting to level out. Even if the days of dramatic hikes are gone, there is still a projection of a 6% rise in U.S. rents this year— double the seasonal trends in “normal” years before the pandemic.

4. Does Rental Income Increase with Inflation?

As inflation drives up rent prices, landlords stand to make more net cash flow. This puts more money in your pocket, but as the costs of goods and services increases, your higher rents, or a portion of them, will be offset by the rising costs of managing and maintaining the rental properties.

Rental Property expenses that have increased during this high inflation period include:

• Maintenance expenses (lawn care, painting, etc.)
• Major renovations (roof replacement, new water heater, etc.)
• Mortgage rates (driven by Fed interest rate hikes)
• Property taxes (driven by higher property market values)
• Marketing costs to find tenants (Broker fees)
• Interest rates on non-confirming loans (Private and Hard money lenders have also increased interest rates)
• Landlord insurance premiums

You may be wondering by how much? Here are some indicators of consumer prices between June 2021 and June 2022:

The cost of energy, household furnishing and supplies and services (among other things) have increased 41.6%, 10.2%, and 5.5% (less energy services) respectively.

The cost of Building Material and Supplies Dealers increased from 153.50 in January 2020 to 233.562 in June 2022, an increase of 52%.

So what? Why does this matter for landlords and rental property investors?

Our take is that if you don’t raise rents to keep up with this high inflation period, your rental properties net operating income will likely decrease by 10%+ (assuming rents don’t change). If you do raise the rents by let’s say by approximately 10%-15%, you protect your existing net operating income. If you want to increase your net operating income then you likely have to raise rents a lot more (25-40%), but you should be careful about how and when you do that.

5. Why, When, How to Raise the Rent and Keep Tenants

It’s not just a question of when you can raise the rent by law, but under what circumstances you should raise the rent. This is often a question landlords struggle with because, according to the 2019 Group Consumer Housing Trends Report from Zillow, 78% of renters experienced a rent increase in 2019, where 55% of those people stated that their decision to move was directly tied to that rent increase.

Why raise the rent?

No renters, no income. As a result, you have to approach raising the rent with careful consideration and empathy for your tenants. It’s recommended that you increase the rent under the following circumstances (not comprehensive):

• Market rates have increased
• Property maintenance expenses that need to be covered
• Property taxes have increased
• Insurance premiums have gotten higher
• Homeowner’s association or condo fees have gotten higher

You cannot raise the rent as a landlord or owner under the following circumstances:

• You try to raise the rent during an active lease
• The lease doesn’t allow for a rent increase
• Advance notice for a rent increase wasn’t given properly
• The property is rent-controlled
• The increase is or can be seen as retaliation against a tenant
• The increase meets the standard for discrimination against a tenant according to the Fair Housing Act
• The increase is being done as a way to force a tenant to move out
• The increase is to a level prohibited by local law

When to raise the rent?

The standard timelines for landlords to raise rent prices include:

• When an existing lease expires. You can’t increase the rent until the current lease term expires unless the rental agreement you signed with a tenant includes conditions for rent increases during the lease period.
• When a lease converts from annual to monthly. Some landlords use a holdover clause in a lease agreement that states rent will automatically increase in the case that an annual lease converts to a monthly lease for the applicable unit occupied by the same tenant.
• When a new tenant signs a new lease agreement. Landlords have fewer restrictions on increasing rent for new tenants. Before setting the new rent price, check the market rate for rent in the area, and raising it too high could drive good tenants away.

How to increase the rent?

Raising rent prices is slightly different for month-to-month tenants versus annual lease renewals. Be sure to review state laws regulating rent increases.

How to increase rent for month-to-month leases:

1. Determine the rent increase based on market rates and state laws.
2. Give tenant(s) written notice in accordance with state-mandated notice periods (usually 30 days).
3. Request tenant confirmation of receiving the written notice.

For annual lease renewals, it’s suggested that you reach out two months before the lease expires to discuss rent increases, and this gives you time to take action if the tenant chooses to argue the increase or vacate the property.

There are a few ways to apply a rent increase at renewal:

1. Modify the existing lease:. The lease should state that all terms will remain the same except the new end date and the new rent.
2. Draft a new agreement: Sign a new lease stating the new start and end dates, new rent price, and any other changes to the lease terms.
3. Serve the tenant’s notice:. You may only have to serve a written notice depending on the lease terms.

Similar to the lease itself, the written notice for annual and monthly lease agreements should state:

• Landlord and tenant contact information
• The new rent amount
• The effective date the rent increase starts
• Rent payment options
• Both parties’ signatures

You should also consider adding a brief description of why the rent is increasing and how tenants will benefit. For example, a rent increase will allow you to continue providing high-quality amenities and property maintenance.

Our Final Thoughts on the Inflation Effect

For the most part, inflation is beneficial to landlords because it raises the cost of housing which raises rents in turn and, therefore, their gross income. This is because the demand for rental housing increases as people become more willing to pay high rents than an unmanageable mortgage in that economic environment.

As a landlord, you may have higher expenses due to the cost of goods and services going up. Still, having a rental property means you’ll largely be shielded from the consequences of inflation because the rents on your property will keep pace with the inflation rate. You’ll likely be able to pay your rent increases beyond just covering your expenses for a nice tidy profit.

Source: Baseline