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There is more wear and tear on a house the more occupants there are. Can I charge a base rental price for one person with an additional amount for each additional person without being in violation of discrimination laws? I am in California.

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Re: Discrimination

Posted by: Ralph

Date: February 07, 2008 08:03:11 PM

I am not aware of a statute or court decision in California or in any other state that prohibits a landlord from charging extra rent for additional occupants. Good lease agreements often include a clause that increases the rent if a “guest” stays beyond a certain time (typically two weeks to a month) and that clause should be written so as to include any person who purposely takes up residence without the written consent of the landlord. Obtaining consent of the landlord provides the opportunity to amend the lease agreement for a higher rent even if not covered by a lease clause. However, it is probably best to have the increase amount(s) written into the lease for a number of reasons, including (1) to avoid arguments later and (2) to minimize any fair housing claims regarding fair housing as discussed below. Of course, most rent control ordinances will limit extra rent for additional tenants and the rules will vary among different rent control jurisdictions. For example, under the Los Angeles Rent Stabilization Ordinance, rent in a controlled unit may be increased by 10 percent for each additional tenant with the exceptions that rent may not be increased for the first minor dependent child of a tenant of record as of 12/8/90. However, you do need to be very careful to avoid any hint of discriminating against any protected class under federal, state, and local fair housing laws. Of most relevance is the fact that in 1988 Congress made it illegal to discriminate against families with children when it amended the Fair Housing Act of 1968. This added protected class is known as “familial status” and includes a variety of defined individuals besides the traditional family unit. Some states and local governments have further extended such protections. Accordingly, you almost certainly can’t charge more for an additional child than for an additional adult because you consider children to be more likely to cause certain types of damages. I would personally not attempt to charge extra for any number of children period. That is, if you charged an amount for one adult and a higher amount for two adults, charging for any number of children, whether there is one or any other number of adults, might be considered a violation of familial status protection under federal law or under some issue covered under state statute or local ordinance. However, although this is something about which I’d be concerned, I don’t know of any specific law or court decision to back up that concern. In my opinion, landlords should resist the temptation to charge unreasonable extra rent for additional tenants. One should realize that the increased expense of additional occupants is in no way proportional to the number of occupants. If adequate screening and proper selection are utilized three occupants should not increase the risk of damages. More occupants will increase normal wear and tear, but not proportionally. Even utilities paid by the landlord will usually increase relatively little because there are minimum service connection fees and most usage charges do not depend directly on the number of occupants. Heating/cooling costs, often a major part of the electric/gas use, depend little on the number of occupants. Electricity for the refrigerator will not increase and may actually go down, as more food in the freezer/refrigerator decreases electricity needs. Electricity for lighting and TV may increase slightly, but relatively little in the overall picture. Water usage will increase somewhat, but again usually at nothing like the ratio of occupants, particularly if car washing use is prohibited or severely restricted. Even washer/dryer energy use will usually be significantly less than proportional. Retaining good tenants is usually much better than replacing tenants sooner than necessary because one took advantage of tenants when allowing additional occupants. In my opinion, based on three decades of management experience, having adequate lease clauses and an acceptable occupancy standard limits a landlord’s downside risk related to additional occupants. Although discussion of occupancy standards is beyond the scope of this discussion, the subject can, under certain circumstances, be related to your question, so I’ll say a few words on the topic. Landlords can limit the number of people allowed to rent a unit under various occupancy standard guidelines. Many jurisdictions, including HUD at the federal level, states and cities, have published guidelines regarding occupancy. However, one must be very careful when applying occupancy standards because different jurisdictions have different guidelines and many rules are truly only “guidelines” and may not stand up to a court challenge, particularly when occupancy standards come into conflict with the protected class of familial status under federal fair housing law or under some even more restrictive law at a lower level of government. Although most landlords are probably most interested in occupancy standards because of real or perceived issues related to more occupants, occupancy standards have historically been justified based on “habitability.” That is, allowing too many occupants makes the unit less safe or less healthy. Typically, guidelines are tied to building codes (e.g., Building officials and Code Administrators (BOCA) guidelines), number of bedrooms, or number of square feet, but some guidelines (e.g., HUD) make allowances due to sizes of rooms, layout of the unit, availability of other living areas, age of children, and any physical limitations of the housing such as capacity of septic/sewer or water systems. One must be sure to understand the applicable occupancy standard laws and/or guidelines in order to avoid charges of fair housing law violation.

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