Owner Occupied Duplex - 1st property, seeking advice/resources

[Nick Sexton]

Hello everyone. I'm new here, so forgive me if I'm asking commonly known questions, or starting a discussion which has been had many times recently. Thanks in advance to anyone who reads and takes the time to respond. 

We recently purchased a duplex in hopes of occupying one unit and renting the other. We've began looking for potential renters, and we've had a fair amount of interest initially, but since this is our first rental property we want to make sure we're doing everything appropriately, and also that we find the best tenants possible. 

I'm curious about fair housing laws for an owner occupied duplex. As I understand it, the FHA isn't necessarily applicable with our rental situation. However, I've read that while the federal fair housing laws don't apply to my property, that there may be state, county, or city housing laws that do. I haven't been able to find anything online regarding fair housing laws for an owner occupied duplex in my area (Minnesota, Ramsey County, St Paul). Seeing that we are, in a sense, sharing our home with our renters, do we have the right to decide who we share our home with? Or, are we required to accept any qualified prospect who meets our rental guidelines, regardless of whether or not they're our ideal renters?

- To be absolutely clear here, we have no issues regarding race, sex, sexual orientation, or religion, or anything of that nature.... but we would strongly prefer to not rent to a family with young children. The house has a very small yard, which will not have shared usage due to outdoor projects we're working on this fall, and the fact that we have a very small puppy who has her own space in the yard (I don't want young children playing with her unsupervised and potentially being rough with her, or accidentally letting her out of her space). I also work from home and I'm concerned about potential distracting noise throughout the day. Without a yard to play in, it's just something that makes me wonder. So again, to be clear, it's not that we're 100% unwilling to rent to families with young children, it's just that it would be our preference not to. 

- We do not accept section 8. We are not required to accept it, so we don't. We get at least one inquiry a day asking if we accept section 8. I've seen many local ads which state clearly in the ad that they do not accept section 8, however, I've read that it's discriminatory to list that in a rental ad... so I don't have it listed in any of ours. Is it discriminatory to say in an ad that you do not accept section 8? If so, what is the best way to handle inquiries as to whether or not we accept the voucher?

- The second unit in our duplex is 3 bedrooms/1 bath. If I understand correctly, housing laws dictate that 2 persons can occupy each bedroom. That would mean a total of 6 people could occupy our unit. I can't see 6 people being comfortable in there, even though it is 3 bedrooms, and even if 4 of those people are children. Are we required to follow these guidelines as well, or is this something that we have discretion over? We have had more than one person call and ask "how many people can live in this unit?", and each time I just shake my head and wonder... 

Anyways, these are the questions that I haven't been able to find definitive answers to. I hope I'm not coming across as difficult here either. We really just want good tenants who won't cause problems, but at the same time, if we have the option to be selective and use our discretion about things beyond the basic rental requirements we have (credit, income, criminal/rental history) we would like to take that into consideration as well. 

If anyone has answers, or can direct me to some resources to find answers for myself, I'd greatly appreciate it. Thanks again.

[Marc Jolicoeur]

I great resource you should get is the Landlord's Guide to Minnesota Law published by HOME Line. Its a great book that spells out all MN rules.

According to page 37 under MN statute (363A.03, subd. 43) You may reject applicants with children if you - the owner of the rental property - are living in the building and it has four of fewer units. I guess this is an allowable exclusion from legally protected class discrimination.

I was not able to find an answer in the book to whether StPaul limits the number of occupants per bedroom or per sq ft. of living space.    Minneapolis does limit the number to 5 total people per unit and limits the number of unrelated individuals.

I think its best to publish some criteria for potentially denying an application to filter out many who would not be great tenants.   Give these criteria to all applicants and those coming to a showing.  For example:

- income > 3x rents

- credit score > 660

- credit history has no missed payments

- must have verifiable income (tax returns, pay stubs, employer verification) 

- no lies or omissions found in the application

- no evictions

- no criminal background

Note: Per federal law if you have an older place, you need to disclose it if it has lead paint.

Please share if you find other answers.