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Create an Occupancy Policy with Baltimore Property Management Experts

Rental Property Occupancy Standards
Can a landlord limit the number of tenants in their rental? It is a question on many landlords’ minds—some worry about mitigating overcrowding, noise, utility usage, and potential wear and tear. In short, yes, there are limits to the number of occupants allowed in rental properties and it’s important to have a clear occupancy policy. Yet, landlords must know and follow all applicable local, state, and federal laws. So, join us below for advice from a top Baltimore property management company about Fair Housing and occupancy laws every landlord needs to know.
Can a Landlord Set Their Own Occupancy Limits?
 
In general, landlords may set their own occupancy limits with careful consideration. Thus, no matter what your occupancy policy is, landlords must adhere to all laws. These sets of guidelines keep landlords from setting unreasonably low limits to reduce noise or wear and tear.
 
If landlords seek to set a low limit, they need to prove it is legitimate health, safety, or business reason. Yet, know that backing up these decisions if disputed can be difficult and costly. Therefore, once you have decided on your planned occupancy limits, it is a good idea to review it with an attorney to limit potential liability. If not, landlords run the risk of discrimination claims.

What is the Federal Occupancy Standard for Rental Properties?

Federal law, as well as state and local health and safety regulations, are all taken into account when determining an occupancy policy. According to a Baltimore property management expert, the widely accepted industry standard is “two persons per bedroom.” This comes from a Housing and Urban Development document known as the “Keating memo.” Taking that memo’s suggestions, one step further is something referred to as the IPMC. So, let’s take a deeper look at these important guidelines below.
What is the Keating Memo, and Why Does it Matter?
 
In 1988 the Fair Housing Act added familial status as one of its protected classes, forever changing how landlords manage their rental properties. However, the initial guidelines laid out were confusing.
 
Recognizing a need for clarification, in 1998, HUD adopted the Keating Memo as a way to outline “reasonable” standards for occupancy. This was a way to provide useful examples without actually setting up a hard and fast rule. Take a look at the key points below:
The Keating Memo Suggests –
  • Two-Persons per Bedroom – This is true unless alternate rooms in the property are also habitable.
  • Size of Bedrooms – Floor area, is also a consideration. It cites that a family of five may fit into a two-bedroom apartment if the room’s size is large enough.
The Keating Memo also says that the “two persons per bedroom” is negatable if the bedroom floor area is insufficient. The memo assists landlords in creating policies that do not violate Fair Housing Laws. There are potentially additional restrictions or allowances property owners need to be aware of on the state or local level.

What Is IPMC or the International Property Maintenance Code?

According to our Baltimore property management expert, the IPMC outlines a more detailed set of guidelines regarding occupancy standards. Therefore, this is helpful to landlords in areas where local or state regulations are still vague.

The International Property Maintenance Code Suggests –

  • 70 square feet – Minimum floor area for a bedroom occupied by 1 person.
  • 50 square feet – The minimum floor area for each person if it is a shared bedroom.
  • Non-habitable areas and kitchens are not considered a sleeping area or bedroom.
It also lays out some general guidelines for occupancy based on floor space:
  • 120 square feet – Living area space to accommodate 1-2 persons
  • 120 square feet of living and 80 square feet of dining – Sufficient for 3-5 occupants
  • 150 square feet of living and 100 square feet of dining – Adequate for 6 or more occupants
Even with these guidelines, it is important to note that each jurisdiction may have additional requirements based on various factors. Violations of occupancy standards is a serious and costly offense for landlords. So, check with any appropriate housing commission laws before creating your property’s occupancy rules.

Fair Housing Laws and Discrimination

The Fair Housing Act prohibits landlords from discriminating against protected classes. Federally protected classes include race, religion, national origin, age, familial status, disability, and sex. Thus, these laws apply to every aspect of a landlord-tenant relationship from the first contact to move out. To comply, a landlord is not allowed to do any of the following:

Fair Housing Violations

  1. Landlords may not advertise or make statements that indicate a limitation or preference based on race, religion, or any other protected category at the federal, state, or local level.
  2. Property owners may not falsely represent a property’s availability status.
  3. You cannot place more restrictive guidelines for certain individuals and not others.
  4. Landlords are not allowed to refuse to rent to individuals or persons based on their belonging to protected groups.
  5. Owners cannot terminate a lease or seek eviction for any retaliatory or discriminatory reason.
 
As a landlord, it is essential to realize these are not the only protected classes and that many states or local jurisdictions have additional categories. A Fair Housing violation or claim of discrimination is potentially crippling to your business and understanding your responsibility is key. To illustrate how protected categories may vary from place to place, take a look at the comparison below.

Protected Classes in Various Cities

  • Baltimore – Race, color, national origin, religion, sex, disability, familial status, marital status, sexual orientation, gender identity, age (18+), ancestry, and source of income.
  • Philadelphia – Race, gender, religion, sexual orientation, source of income, marital status, disability, age, national origin, and domestic or sexual violence victim status.
  • Washington DC – Race, color, religion, sex, disability, familial status, national origin, age, marital status, personal appearance, sexual orientation, gender identity, family responsibility, political affiliation, matriculation, genetic information, source of income, and status as a victim of an intrafamily offense.
 
When considering Fair Housing Law, the best practice is to treat everyone the same, every time. Not only is it a violation of law to adopt different standards or policies for different groups, but it is also just poor business. If you ever have any questions regarding if the action you take is correct or compliant, consider seeking the advice of an attorney.

Are Any Properties Exempt from Fair Housing Law?

The Fair Housing Act does not cover every rental property, just the majority of them. There are instances where landlords, in particular circumstances, have more leeway with not complying. If your property fits into one of the categories below, you may be exempt from the laws above. However, our Baltimore property management experts still advise checking with an attorney.
  1. Owner-occupied buildings with no more than four units
  2. Single-family property rented by the owner without the use of an agent (as long as the landlord owns no more than three such homes at any one time)
  3. Housing operated by religious organizations or private clubs that limit occupancy to members only.
  4. Housing reserved exclusively for senior citizens is exempt if: communities where every tenant is 62 years of age or older, or “55 and older” communities in which at least 80% of the occupied units must have at least one person 55 years or older.

How to Create an Occupancy Policy for Your Rental

Creating an occupancy standard for your rental property is just as important as any other document landlords need and is essential to avoid housing discrimination. That said, the process can seem overwhelming at first, especially if you manage multiple properties. As you begin, prepare to consider many factors and do plenty of research on the way to a final product. The policy’s goal is to have a consistent and reasonable standard that adheres to Fair Housing Law. Thanks to our Baltimore property management professionals in the field, we have assembled a few simple steps to get you started. Continue reading to find out more.

Considerations for an Occupancy Policy

  • Account for Bedroom Size and Livable Space
  • Septic or Utility Limitations
  • Age of Children – Set a limit for when a child becomes an occupant (example: 3 years of age)
  • Any state-specific regulations
  • All Identical Units Must Have the Same Limits
  • Create Different Standards for Differing Units
  • Remember Pregnant Women Count as One Occupant
  • Inform Every Applicant of Occupancy Limits
  • Document Your Policy in Writing

5 Steps to a Rental Property Occupancy Policy

Now that you have an idea of the considerations needed let’s explore a little deeper. Here are five steps from our Baltimore property management professionals to help any landlord create a compliant occupancy standard.
  1. Research State and Local Health or Safety Codes
  2. Limit “Occupants,” Not “Children”
  3. Calculate the Age of Children
  4. Consider the Property’s Limitations
  5. Document, Document, Document!
 

Research State and Local Health or Safety Codes

Your property’s location has a big impact on what you can and cannot do as far as occupancy regulation. So, research your local housing commission rules and verify any applicable laws. However, it is not always easily found information. Be sure to check building codes, fire codes, zoning, property maintenance regulations, just to name a few. Due to the nature of state specifics being potentially difficult to decipher, consulting an attorney familiar with local code may be well worth the investment.

Limit “Occupants,” Not “Children”

Even implied or perceived discrimination against families with children is a huge liability for landlords. Therefore, when creating your policy, address only the number of people or occupants. Do not distinguish children from adults in any way. According to HUD, policies that specifically place restrictions on the number of children are unreasonable and discriminatory. If you manage or own a multi-family complex, there are additional things to consider. As an example, landlords may not do any of the following, as they could incite discriminatory feelings:
  • Make discriminatory statements
  • Discouraging children from living there
  • Advertising as “Adults Only”
  • Restrictive common area policies geared against children
  • Enforcing policies only against occupants with children
  • Clustering families in one area of the complex
  • Limiting access to children in recreational areas

Calculate the Age of Children

This is a tricky subject for many landlords. A blanket occupancy policy of “two per bedroom” is not always reasonable. This is where landlords must set a policy to determine what age a child will become an occupant. HUD standards provide this example; if a couple has a teenager, denying them a one-bedroom apartment is reasonable; however, a couple with a baby could occupy a one-bedroom if the unit and bedroom are large enough.
 
This type of provision in your policy affects current tenants as well. In multi-family complexes, when a baby is added to the household, many property managers give notice they must move to a larger unit. Be careful with this and instead consider waiting a year or even longer. Immediately hitting new parents with a notice to move is a great way to induce a discrimination claim. So, be reasonable.

Consider the Property’s Limitations

One legitimate and non-discriminatory factor in limiting occupancy is due to building or system limitations. The age and condition of systems such as water and sewage capacity, power supply, heating, and cooling systems can all play a role in deciding maximum occupancy.  Additionally, the size and configuration of the individual unit contribute to whether a standard is reasonable. HUD examines these limiting factors and can bolster a landlord’s limited occupancy levels if found to be legitimate.

Document, Document, Document!

It goes without saying that any policy you have as a landlord needs thorough documentation. So, no matter what standards you choose, be prepared to show compliance with local laws. At any time, landlords should be able to provide legitimate and non-discriminatory reasons for why their occupancy policy is what it is. Having a set policy for each unit type based on reasonable accommodations such as the unit’s size and building limitations ensures you will limit claims of discrimination. Always present each interested party with the same occupancy guidelines and do not single out any one group or family with children.
 

Final Thoughts

Occupancy standards have the potential to cause landlords significant trouble if not handled correctly. Landlords prepared to invest the research time can create a successful policy, but are you a landlord with ample free time available to devote? If not, consider turning to a leading Baltimore property management firm, Bay Property Management Group. Our experienced staff is thoroughly trained in Fair Housing compliance and can create an occupancy standard that works for your unit. We specialize in full-service rental management throughout Maryland, Pennsylvania, DC, and Virginia, and handle all aspects of the process, from marketing to maintenance requests. Give us a call today to speak with one of our dedicated team members and find out how stress-free rental ownership can be!