When owners and operators establish criteria and processes for resident selection, they must comply with the Fair Housing Act (FHA). To do so, owners and operators generally must apply the same set of standards to every applicant. Exceptions in favor of one applicant because of a subjective analysis of the applicant’s character, prior bad luck, or promises to do better in the future – intended as a help to the applicant – nonetheless present a problem for the owner or operator if another applicant claims that his/her rejection was based on a failure to extend the same exception.

This does not mean that the owner or operator cannot modify the standards or make exceptions from time to time. Rather, it means that when the standards are modified, or on the very rare occasion when strict adherence to the standards yields an absurd result, owners and operators carefully must document both the modification and the reasons for it as well as the effective date. Foreseeable reasons for modification of standards include, but are not limited to, changes in economic conditions, significant increases or decreases in occupancy, or enrollment in a new finance or resident referral program. In the rare event that an owner or operator makes an exception from the standards, s/he should base the exception on objective criteria, such as an applicant’s new employment, promotion, or marriage (meaning additional income), and should document the reason for the exception.

Owners and operators also should document the resident selection process itself. If the owner or operator employs a third-party vendor for the selection process, the owner or operator should give the vendor fixed criteria and review the vendor’s methods. Thereafter, the owner or operator should remain “hands-off” the process unless a change is undertaken. If the owner or operator performs the selection process, s/he should draft a written policy outlining the step-by-step process and periodically review that policy with employees, both for training and for determining whether revising it is appropriate.