Can you reject an applicant who is unemployed?

Question

I have a single family rental, and I advertised it on Facebook. One potential renter is a highly educated social worker who was recently impacted by a COVID-19 related layoff. When she asked if unemployment was a valid form of income and would it count against her in the application process that she was unemployed, I stated that the letter she receives from the state can be used as a form of income validation. I also told her that she would require a co-signer because she is out of work, based on recommendations from fellow investors. Her response was that it was unacceptable and I was discriminating against her. I did my research and as far as I can tell, unemployed is not a protected class in Pennsylvania. Has anyone else run into this lately given all the COVID-19 layoffs? I'm guessing she is blowing smoke.  I do intend to run this by my legal council, but wanted to see what others had to say first.

Lawrence Zhou · Answer

@Rick Stivers This seems a bit absurd. Why would a landlord be required to accept a tenant currently without a job? Then the tenant throws a tantrum when you ask for them to get you a co-signer. Sounds like you may be dealing with a “professional” tenant that could be a pain for many years to come. Steer clear my friend.

Russell Brazil · Answer

None nationally or in any of the states I do business in.

Id also say based on her responses, she seems like someone who may stop paying because she knows she cant be evicted because of covid.

Joe Splitrock · Answer

I would argue that unemployment is not a source of income. It is temporary assistance while you look for employment. When they talk about "source of income" they are reference things like Section 8 or disability. I could see some states extending the definition due to COVID, but as of right now I don't think any state includes unemployment as a source of income. I would also be careful because the $600 weekly bonus has ended and there is no guarantee it is coming back. Most people on unemployment make very little money.

Joe Splitrock · Answer

@Rick Stivers advertising on Facebook seems to bring out all the drama. I have a listing now and I chose to skip Facebook. I am getting better quality from Zillow, Apartments, etc. As others stated, you are not required to accept an applicant without a job. Based on her response, I would cease any consideration of her as a candidate.

The government has created a hostile situation for landlords when tenants are not working. There is likely going to be more eviction moratoriums, which means you may rent to someone out of work and they may never pay. I wouldn't consider any application from someone without a job, simply because of the threat of moratorium. I know the federal moratorium ended, but I believe when congress finally passes a new bill, the moratorium will be back in place. The president and congress generally support eviction bans through at least the end of the year. You do not want an unemployed tenant...

Aaron F. · Answer

https://prrac.org/pdf/Appendix...this resource shows state and local restrictions on discriminating against source of income. I can’t say whether exceptions have been made for covid.

I had just looked into this because of a similar applicant this week, minus the belligerence. I would expect to see more applicants like this so it’s good to be prepared.

Rick Stivers · Answer

All great points, and why I like BP! Thanks everyone for the great feedback.

I have another property that I’m currently going through an ejectment with so trying to avoid similar issues due to the moratorium in PA. I’m convinced the former home owner is having elective brain surgery just to stay in the house a little longer but that is another story for another day :-).

Lawrence Zhou · Answer

@Joe Splitrock well put!

Steven C kelly · Answer

@Rick Stivers Source of income may be a protected class but stability of income may not be. You can require her to prove that she will still be making that same income or more once her unemployment is over

Josue Vargas · Answer

I don't think you are discriminating against her.  Being unemployed is not a protected class.  She is currently unemployed and receiving such benefits, and if that not enough per your min. requirements, you are doing the right thing to request a co-signature.  If she isn't able to find one, that's a red flag, and I would move on to the next best tenant that meets your criteria.  Always check your latest updates for RE housing regulations within your local area.   Good luck, don't stress much.  Just keep looking for the right tenant.

If she/he/they started with that statement, and they are not qualified, why bother?

Steve K. · Answer

I operate in PA as well. I didn't not hear about anything about special rulings in PA. If she is unemployed and wants to rent, she must prove that she is employed and it's your decision to accept or deny.

(We recently approved partially unemployed tenants in our apartment, previous ones left in the middle because of covid job loss. I was nice to let them walk away without penalty. They left 15 days early as well and I was able to rent fast.)

Ask her to send you the ruling and It must be from a .gov site. I had a tenant ask me for rent breaks etc when all this started to unfold in March and I exactly did that. This prospective may not contact you again if you ask more questions.

I second Russell's instincts, she most probably will stop paying you.

Can you reject an applicant who is unemployed?

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