(Some Viable Alternatives to Requiring SSNs)

by Nadine Green

An interesting concept has been batted about by various fair housing experts in the past few months, and as is the case with most issues, there is no consensus as to just what is the right answer. The topic is the policy of landlords requiring a Social Security Number (SSN) from prospects in order for them to qualify as residents.

Let’s look first at why a landlord would ask for an SSN to begin with. It is much easier to check credit if you have the SSN of a prospect, and, of course, you like to check credit to determine how well the prospect manages his or her money. And you want them to manage it well, so that they will have the appropriate dollars to pay you your rent, which is pretty fundamental for a landlord. (Of course we know that this process is not infallible; I would place a bet that no landlord reading this article has had every resident pay rent in full and on time without fail!). Is it, then, a reasonable business practice to require an SSN?  Yes, of course, the business rationale is clear. But is this policy free from all possible implications related to fair housing law? Maybe…but maybe not! And here is how we come to the debate about this issue…

Fair housing law provides that it is unlawful to discriminate in the terms, conditions, or privileges of rental because of the race, color, religion, sex, handicap, familial status, or national origin of a prospect. (These are the federally protected classes; your state or local government may have provided protection to other groups, and you would be wise to be aware of such.) The law makes it clear that discrimination can occur overtly and with intent, as is most often the case. However, what many landlords do not realize is that fair housing laws can be violated when there is unintentional discrimination. There remains a legal question under fair housing law as to whether a practice or policy that is not intended to discriminate can, in fact, be unlawful if it has the effect of discriminating against a protected class. And this brings us to the matter of landlords requiring SSNs from prospects.

Just who has an SSN? Well, just about every American will have one, even the babies (we can thank our beloved IRS for this). So chances are that most every American will be able to provide this required information. And, of course, there are many legal aliens and residents who have one as well. But, who does not have an SSN? Most likely, a person without an SSN will not be an American, but will be a citizen of another country. In other words, the person without an SSN will most likely have a national origin other than American, and as has been said, herein lies the rub…A policy requiring a SSN is intended as a means to obtain financial documentation, but the effect of such a policy means that most, if not all, Americans will pass the threshold test of supplying the landlord with an SSN, but that most people who cannot pass this test will have a national origin other than American. So the question is, could the effect of an apparently neutral, business-based policy be challenged if it is discriminatory in its effect?

Well, the experts disagree on this (goes to show you that fair housing issues can be so very simple and basic, or so very complex and unsettled!), with some believing that the practice could be deemed discriminatory, others believing that it would not (and who would be willing to serve as counsel defending such a case), and others believing that this entire topic is no less than ridiculous. So what do you do?  First, be aware of the following:

  • People are not required by law to have an SSN to be able to rent an apartment. (Often, landlords confuse housing law with employment law. To hire someone, you are required by law to verify their right to work through proper documentation, including their SSN; to rent to someone requires no such documentation.)  Remember that even illegal aliens have fair housing rights and protection!
  • Foreign nationals here with a work status will have an alternative number from the Social Security Administration. This should be acceptable and helpful to you for your qualifying purposes.
  • In some cases, it is not much more costly or difficult to get a credit report on prospects who have a federal ID number from a country other than the United States.

Now, think about what you are trying to accomplish with an SSN requirement policy in the first place. The point is to have at least some assurances that the rent will be paid. Since that is your point, you could consider alternatives to requiring a SSN.

  • If you can’t get an SSN from a prospect and thus check credit, how about offering that person the right to have a guarantor to the lease…someone who does have an SSN and who meets your credit standards. This way, you have someone “on the hook” if the rent isn’t paid or the resident skips out leaving you with unpaid rents and/or damages.
  • Another way to help protect your interest may be to require an enhanced security deposit (if allowed by your state law) in lieu of a prospect being able to provide an SSN.

Something to think about…no easy answers here…but remember that while it may not be unlawful to require SSNs, fair housing laws are broadly applied (just look at the issues that have developed in the past decade on federal, state, and local levels…you never thought you would see some of what has developed). Most of the experts agree that it is not wise to refuse to rent just because someone does not have an SSN. By offering alternatives to the requirement of SSNs, you can still serve your business well, and perhaps protect yourself from a fair housing dispute (even when you win one, it’s not a lot of fun to be involved in the first place!). You have also opened your doors to everyone who can provide you with a probable guarantee that you will get the rent…and opening doors is what fair housing is all about!

Nadine Green is Senior Counsel with For Rent Magazine®. The information contained in this article is not to be considered legal advice, and the author and FRM strongly recommend that you consult with your own counsel as to any fair housing questions or problems you may have.