Create an Occupancy Policy for Your Rental with Los Angeles Property Management Experts

“Can I limit the number of tenants in my rental property without getting into legal problems?” It is a question that troubles many Los Angeles landlords.

Yes, you can set a limit to the number of occupants that can live in your rental units. That is what an occupancy policy is all about. But you will need some background insight into federal, state, and local occupancy laws to make the right decisions.

In this post, experts at RTI Properties, the top-rated Los Angeles property management company – divulge useful information about Fair Housing and occupancy laws. What’s more, you will find a quick guide to making the right occupancy policy for your rentals. Let us get started!

What is an Occupancy Policy?

An occupancy policy outlines the safe number of individuals that can live at a property. The guidelines are often based on the number of bedrooms at a rental property, but the size of liveable space in square footage is an important consideration.

You have probably heard the term “HUD occupancy standards” mentioned severally. These are federal rules set by the Department of Housing and Urban Development(HUD) and form part of the Fair Housing Act Amendment.

Whereas Los Angeles landlords can limit the number of people who can live in their properties, they must comply with all relevant housing laws (both federal and local laws). As such, it is always a good idea to review your occupancy limits with an experienced attorney to prevent potential liabilities.

Federal Occupancy Limits for Rentals

In 1998, familial status became part of the protected classes of the Fair Housing Act(FHA). The development ensured that landlords do not discriminate against pregnant renters or tenants with children.
But tension grew between the FHA’s new adoption and occupancy standards, leading to a lot of confusion for landlords and property managers.

In 1991 HUD’s General Counsel Frank Keating (in response to the growing confusion) issued a document with examples of reasonable limits on occupation without being too definitive. HUD adopted the document, now known as the Keating Memo, in 1998.

Below are the Keating Memo suggestions:

  • Two-person per bedroom rental occupancy limits unless there exist other habitable rooms in the rental unit.
  • The bedroom floor area should be taken into account since a family of five can fit into a two-bedroom apartment if the rooms are large enough.
  • The two-bedroom rule may not apply to a situation where the bedrooms are too small.

The Keating Memo assists you in setting occupancy standards that do not violate FHA laws. But also consider that many cities have created their own guidelines on the number of people that can occupy a rental property based on the number of rooms, total square footage, and several other factors.

FHA occupancy limits and state and local regulations are not the only rules that Los Angeles property management agents and landlords need to consider. Let us take a look at IPMC.

International Property Maintenance Code(IPMC)

The International Property Maintenance Code (IPMC) outlines a set of more definitive occupancy rules. It applies whenever state and local laws do not offer enough regulation to occupancy. IPMC regulations include:

  • The minimum floor area for a bedroom occupied by one person is 70 square feet.
  • The minimum floor area for each individual in a shared bedroom is 50 square feet.
  • Non-habitable areas such as the kitchen cannot be considered a bedroom.
  • IPMC also stipulates overall occupancy limitations based on a rental unit’s overall size. They include:
  • The minimum area to accommodate 1-2 occupants is 120 square feet
  • Three to five occupants must have at least 120 square feet living room and 80 square feet dining room.
  • A unit accommodating six or more occupants must have at least 150 square feet living room and 100 square feet dining room.

Based on the above size limitations, rental units with more than the allowable number of occupants can be classified as unlawful structures.

Violation of the Fair Housing Rules

FHA prohibits landlords and property managers from discriminating against renters based on seven key characteristics: religion, race, age, national origin, familial status, sex, and disability. Examples of Fair Housing violations include:

  • Making statements or publishing advertisements that indicate preference or limitation based on the federally protected categories mentioned above or any other class protected at the state or local level
  • Falsely representing a property’s availability status
  • Evicting a tenant or terminating the lease for any discriminatory or retaliatory reason
  • Placing more restrictive standards on certain individuals and not others

Note that the federally protected categories are not the only ones in existence. Protected classes vary from state to state and city to city. For example, in addition to the seven federally protected classes, the California FEHA offers legal protection against discrimination based on sexual orientation, gender identity, medical condition, ancestry, source of income, marital status, and genetic information.

To avoid liabilities and grow trust with existing and potential tenants, it is best to treat everyone the same, always. If you have questions regarding the compliance of your decisions, our Los Angeles property management experts advise consulting with an experienced lawyer.

Creating a Nondiscriminatory Occupancy Policy for Your Rental Property

This section will guide you on creating an occupancy policy that adheres to Fair Housing Laws, thanks to Los Angeles property management pros at RTI Properties Inc.

» Research State and Local Regulations

Housing rules vary among states and cities, which means your property’s location incredibly influences what you can and cannot do when setting your occupancy limit.

Stay on top of your local property maintenance regulations, zoning, fire codes, building codes, and other applicable laws. Often, it can be difficult to understand the specifics, so it is essential to have an attorney familiar with the local rules by your side.

If you have rental properties in multiple communities, walk the extra mile to review all the applicable laws applicable to each location.

» Limit the Number of Occupants- Not the Number of Children

Using occupancy standards to discriminate against families with children intentionally is a punishable offense. According to Keating Memo, an occupancy policy that limits the number of children per unit is unreasonable and discriminatory.

To avoid discrimination claims, address only the number of occupants, and avoid distinguishing children from adults by all means. Actions that HUD may consider discriminatory against children include:

  • Restricting families to one section of your rental property
  • Enforcing some policies against tenants with children
  • Marketing your rental property as “Adult Only.”
  • Creating common area limitations geared against children
  • Limiting the total number of units that you are willing to rent to occupants with children.

» Consider the Age of Children

According to Keating’s memo, using the two-people per bedroom policy against families with children of a particular age can be unreasonable. For instance, denying a one-bedroom rental unit to a couple with a teenager is reasonable, but denying a large unit with a large bedroom to a couple with an infant is unreasonable. So, you will want to tread carefully when dealing with families with babies and young children.

You certainly want to avoid immediately evicting a resident who has just added a baby to the household, whether through birth, adoption, or other means. Regardless of when the lease term expires, be reasonable enough to wait at least one year before instructing the tenant to move to a larger unit.

» Consider Your Property’s Physical Limitations

The physical limitations of your rental property may provide a legitimate, nondiscriminatory reason to limit the number of people that can live there.

Along with the overall size and configuration of the unit, HUD may look into other limiting factors, including the condition, age, and capacity of the building’s systems (like power supply, water & sewage, HVAC, and power supply) to determine the reasonability of your occupancy standards.

» Document Your Occupancy Policy

Your occupancy policy needs thorough documentation. You will need to demonstrate substantial, legitimate, and nondiscriminatory reasons for the existence of your occupancy policy. It would help if you also outlined the basis of your rules, be it the bedrooms’ and unit’s size or the unit’s configuration. Having this critical information on file can be incredibly useful if someone accuses you of housing discrimination.

The Bottom Line

Investing time to create a nondiscriminatory occupancy policy for your rental property will prevent a bunch of problems. The above information will get you started.

If you need help setting successful occupancy standards, look no further than RTI Properties, a leading Los Angeles property management company. We have a reliable team of professionals with extensive experience in housing laws and who can draft occupancy policies that work for your rental properties in Los Angeles.

RTI Properties handles all aspects of rental property management in Los Angeles, including marketing, tenant screening, rent collection, maintenance scheduling, and record keeping. Call us today at (310) 532-9122 or shoot us a message here for immediate assistance with your property management needs.