Can my landlord refuse to lease to a tenant based on Source of Funds?

 

It depends. Effective July 1, 2020, “source of funds” became a new protected class.  In general, it is now unlawful to refuse to rent to another on the basis of the applicant’s source of funds. “Source of funds” is defined as “any source that lawfully provides funds to or on behalf of a renter or buyer of housing, including any assistance, benefit, or subsidy program, whether such program is administered by a governmental or nongovernmental entity” (§ 36-96.1:1).

There are a few exemptions. § 36-96.2 (I) states that “[n]othing in this chapter shall prohibit an owner or an owner’s managing agent from denying or limiting the rental or occupancy of a rental dwelling unit to a person because of such person’s source of funds, provided that such owner does not own more than four rental dwelling units in the Commonwealth at the time of the alleged discriminatory housing practice … [or] whether individually or through a business entity, more than a 10 percent interest in more than four rental dwelling units in the Commonwealth.”

Further, § 36-96.2 (J) states that “it shall not be unlawful under this chapter for an owner or an owner’s managing agent to deny or limit a person’s rental or occupancy of a rental dwelling unit based on the person’s source of funds for that unit if such source is not approved within 15 days of the person’s submission of the request for tenancy approval.” This 15-day period begins on the date a complete package requesting the tenancy approval is submitted to the voucher administrator.

However, it is not unlawful for the owner to consider the financial qualifications of the applicant and verify the source of funds and other income. According to recent guidance published by the Department of Professional and Occupational Regulation (“DPOR”) “every housing provider has a legitimate business interest in assuring tenants can pay rent [and] housing provider[s may determine] the ability of any potential buyer or renter to pay a purchase price or pay rent by verifying—in a commercially reasonable manner—the source and amount of income, including any payments or portions that will be made by other individuals, organizations, or voucher and rental assistance payment programs.” It’s important that housing providers apply their financial qualification policies in a consistent and reasonable manner to avoid potential violations. 


Commercial Council