Need lodger? Use word of mouth

Q: I enjoy reading your articles and hope you can give me some information in regards to renting out a room with private bath in the lower level of my home for additional income. I would furnish utilities, washer and dryer, kitchen privileges, storage area if needed, and some furniture.

I need to know if renting out a room in a personal residence comes under the same federal laws prohibiting discrimination, or do I have more leeway? I want rent to a graduate student, preferably female, because I live alone and would feel more comfortable with a renter of the same sex. –Marilyn Z.

A: There’s a lot of misunderstanding out there about whether the federal rules prohibiting discrimination apply in a "lodger" situation. The cause of the confusion is the part of the law that exempts owner-occupied properties of four or fewer units from the law’s reach. But another section of the law applies to advertisers or publishers of rental information, and in this part, the owner-occupied exemption does not apply. In other words, if you want to place an ad online or in a print newspaper, that publisher will have to abide by the fair housing rules, in spite of the fact that the housing you’re offering is in your home.

You’ll have some difficulty finding a reputable newspaper to list an ad that specifies sex and, by implication, age (though it’s possible that a graduate student could be an oldster, it’s likely that people reading that part will assume that only younger folks will qualify). An online service might give you more leeway, but whether an online site is a publisher, or a mere vehicle for you to place uncensored or unfiltered copy, is hard to answer in the abstract. The more the online site directs you to discriminatory choices (by offering drop-down menus listing protected classes that you do or do not want to rent to), and especially if it edits your proposed ad, the more it begins to look like a publisher, and thus subject to fair housing advertising rules.

On the other hand, no law prevents you from announcing to your bridge group, the pals you join on your morning walk, or in a sign stuck to a lamp post that a rental to a female grad student is available in your home. These communications do not involve a publisher, and they don’t involve a professional broker. If you are set on finding a lodger with those characteristics and are wary of violating fair housing laws, word of mouth (or guerilla ads) might be the way to go.

Q: My dear friend has a dilemma and I hope you can give me some insight on what to tell her. She has been renting a home for a year with her handicapped daughter and now the house is in the beginning of a foreclosure. This is a real problem because her 15-year-old daughter is severely disabled. Having to move will be difficult. When she does start looking again to rent a house, what can she ask the landlord to supply her that will reassure her that she won’t face a foreclosure situation again? –Joe L.

A: Your friend’s situation is a common one these days. Asking about the solvency of the landlord is a perfectly legitimate question. After all, landlords regularly do very intensive screening to assure themselves that applicants are bill-paying, law-abiding types who will honor a commitment to stay and pay rent during the term of the lease. The landlord, too, has obligations, the biggest of which is to make the rental available for the entire rental term. But unless a lease pre-dates the recording of a mortgage or deed of trust, the landlord’s default on either of those two types of loans will result in the elimination of the lease.

The first question to ask of any prospective landlord is, "How long have you owned the property?" Confirm the answer with a trip to your local land records office. Chances are, a long-term mortgage that the owner has paid off regularly will not result in a sudden foreclosure. Of course, that owner may own other properties that are creatures of subprime mortgages, so you’ll want to check to see what else the landlord owns while you’re at the records office. A portfolio of recent purchases might spell trouble — your landlord could conceivably let your property fall into default as he tries to save the others.

Second, ask for a copy of the landlord’s credit report. Now, landlords aren’t used to being challenged like this, and your request may well be met with, "In your dreams!" On the other hand, if the rental you’re considering is in a soft market, the absence of other willing, less inquisitive applicants may lead the owner to share it. Look for large debts, delinquent payments, and so on. Again, a burdened owner may choose to put money towards other debts rather than save a home in which he has little equity.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of "Every Landlord’s Legal Guide" and "Every Tenant’s Legal Guide." She can be reached at janet@inman.com.

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