Whether you own multiple apartment buildings or a single home that you rent out, you want to choose tenants whom you feel would be the most responsible.
In some states, this is not always possible, as illustrated by a new ordinance in Seattle. Fortunately, New Jersey laws still protect the rights of landlords to choose the tenants they prefer.
The “first in time” rule
Freedom of contract appears to be under attack in Seattle, WA, because of an ordinance that took effect on January 1, 2017. Under this new law, landlords must rent to the first person who meets “all the screening criteria necessary for the approval of the application.” This basically means that landlords cannot choose from among all the applicants; they can only rent to the first one who appears to meet the established criteria.
Going to court
A married couple who rent two apartments in the triplex where they live with their children took the matter to court, saying that they should have the right to select the tenant who would occupy the unit next to theirs. Safety and compatibility were among their primary concerns. Their attorney argued that the new ordinance violated not only the state constitution, but also the Fifth Amendment of the United States Constitution, which gives a property owner the right to sell or lease property to an individual of his or her choosing.
The importance of contracts
The Seattle law appears to fly in the face of the freedom of contract provision that is part of our common law. Contracts result from the voluntary consent of two parties, such as landlord and tenant. If a dispute arises, the contract becomes the focal point in the ensuing legal action. Landlords require contracts to protect their interests and legal guidance when an irresponsible tenant puts those interests at risk. Thankfully, it appears that in New Jersey, landlords still have choices regarding prospective tenants and enjoy more protections under the law than Washington landlords now have under the “first in time” rule.