Sacramento report

By Monica Williamson

In 2007, the State Legislature passed and the governor signed AB 976. The bill was a response to a local ordinance adopted by the City of Escondido in 2006, which (among other things) would have penalized landlords for renting to illegal immigrants. CAA participated in the successful effort to stop the city ordinance from taking effect.

To stop local governments from making similar attempts in the future, AB 976, as introduced by Ron Calderon (D-Los Angeles), would have prohibited a landlord from compiling, disclosing, reporting, providing, or otherwise taking any action regarding the characteristics of a tenant or a prospective tenant that is not expressly required by state or federal law. Under the original version of the bill, any action by a landlord that involved the personal characteristics of tenants would have been prohibited.

CAA determined that the introduced version of the bill would have created severe unintended consequences, such as restricting the information a landlord could use to screen prospective tenants. Thereafter, CAA was successful in obtaining amendments to the bill that allowed owners to request information or documentation necessary from an applicant or a tenant to determine or verify their financial qualifications, or to determine or verify the identity of a prospective tenant or prospective occupant.

As ultimately adopted by the Legislature and signed by Governor Arnold Schwarzenegger, AB 976 places reasonable restrictions on local governments (cities and counties), as well as on rental property owners and their agents, when it comes to inquiries about a tenant or applicant’s immigration and/or citizenship status.

The law specifically provides that no city, county, or city and county can force a landlord or any agent of the landlord to: inquire about or report the citizenship or immigration status of applicants or residents; deny tenancy or evict based on citizenship or immigration status; or take any other action based on citizenship or immigration status of an applicant or resident.

At the same time, no landlord or any agent of the landlord can do any of the following: make any inquiry regarding or based on the immigration or citizenship status of a tenant, prospective tenant, occupant, or prospective occupant of residential rental property; or require that any tenant, prospective tenant, occupant, or prospective occupant of the rental property make any statement, representation or certification concerning his or her immigration
or citizenship status.

Nothing in the law, however, prohibits a landlord from either: complying with any legal obligation under federal law; or requesting information or documentation necessary to determine or verify the financial qualifications of a prospective tenant or to determine or verify the identity of a prospective tenant or prospective occupant.

Effects on the Screening Process
Every rental property owner’s application and screening process is affected by this new law. Applications can no longer ask for a specific type of identification, such as a local driver’s license, because this may exclude applicants based on their immigration status. Similarly, while a credit report can be obtained using either a social security number or Individual Tax Identification Number (ITIN), every owner’s written screening policy should include a process for evaluating applicants who have neither.

The language of the law specifically allows landlords to request information necessary to determine or to verify an applicant’s financial qualifications and identity. A landlord who asks applicants to provide “government-issued” photo identification would likely not violate the law. This request allows applicants to provide such things as a passport or a foreign driver’s license, with the property owner’s goal to verify identity, as opposed to immigration or citizenship status. On the other hand, an owner who requires applicants to provide United States-issued identification would, arguably, violate the provisions of this law due to the fact that foreign-born individuals may not have such a document.

If a landlord requires a social security number of all applicants in order to screen for housing, individuals from other countries may be automatically excluded from the application process. This would, arguably, constitute illegal national origin discrimination in addition to violating the new California law.

Historically, credit screening companies have required social security numbers from individuals in order to run a credit report. Today, however, this practice has changed. Most screening companies report that they have the ability to perform a credit review using other information, like an ITIN or a Visa, coupled with other identifying information. In light of the changes in technology, property owners should not refuse to screen individuals simply because they do not have a social security number.

Even if a credit screening company can perform a credit check of an individual when no social security number is provided, the information eventually obtained in the credit search may not be sufficient for a property owner to qualify an applicant. If the information is insufficient, owners should be sure that their written screening policies include an additional way to evaluate these applicants, such as allowing them to provide additional information to prove their ability to pay. For example, the policy could ask for proof of “x” number of recent months’ paid utility bills, rent, or other regular monthly bills that show a pattern of consistent and timely payment. Some owners’ screening policies allow applicants without a sufficient credit history to rent the home or apartment unit “with conditions.”

Owners, in these cases, establish conditions, such as a higher security deposit or a co-signor, and must provide the applicant with a Notice of Conditional Acceptance. In the end, if the applicant is unable to demonstrate the ability to pay, the owner’s rejection would be based upon “insufficient information to evaluate creditworthiness.”

At the end of the day, the new statute strikes a balance between restricting local governments and preserving the ability of landlords to make a reasonable evaluation about prospective tenants’ abilities to fulfill their obligations of tenancy.

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The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. Monica Williamson is CAA’s vice president of public affairs. Copyright © 2008 by SF Apartment Magazine. All rights reserved.