Step By Step How To On Owning A Rental Property in Philadelphia
[Step One] How to Get Your Philadelphia Rental Property Rented
Are you aware that more than half the residents of Philadelphia are renters? If you have property within our city, this is certainly good news for you. It is necessary for landlords to know the rules and regulations governing tenant screening. This is the best way to guarantee the caliber of persons that’ll occupy your rental property and avoid renting to people who’ll abuse the property.
This is aimed at educating landlords about Philadelphia’s tenant screening process. Here is the overview: Also read What licenses do I need to own a rental property in Philadelphia?
- Philadelphia tenant screening laws
- Free resources
- Basic screening processes
- Locating the best tenant screening services
Philadelphia Tenant Screening Laws
There are lots of State, Federal, and Municipal laws regulating tenant screening in Philadelphia. In fact, the laws regulating tenant screening in most metro cities are stricter than the state laws regulating same. This is because there are more renters in metro cities than in suburban and rural areas. Also, these regulations are not static, so landlords must learn to update themselves on the latest developments.
Here are some essential components of the tenant screening laws of Philadelphia:
- Every landlord must obtain a license from the city to rent out properties. Called a Rental License.
- There are no laws limiting the amount chargeable by a landlord as an application fee.
- Application fees are non-refundable regardless of whether your application is granted or denied.
It is important for landlords to acquaint themselves with the tenant screening laws of the state where they have property. This guide outlines the obligations of landlords in Philadelphia.
Here are examples of some common screening mistakes:
You may not be aware of this, but there are some screening mistakes that are common to landlords within the greater Philadelphia area. These mistakes can limit the ability of a landlord to make adequate background checks. Landlords are not permitted to run background checks on prospective tenants without a signature from that applicant, even if the applicant has filled out all the other requirements on the application. The implication of this is that Philadelphia landlords must get the signature of their applicant or risk not being able to run background checks. So, if your application does not have space for a tenant signature, you need to change that immediately.
Philadelphia Tenant Screening Process
Have you created a tenant screening criteria for your applications? Now might be the time to create one. A tenant screening criteria is the easiest and most consistent way of sorting through applications.
The first thing the landlord needs to do when creating this list is to make a list of the features they want in their ideal tenant. Then use these factors to create a screening list. Make sure the conditions are specific enough to make it easy to sort through the applications, and flexible enough that it doesn’t end up excluding everyone.
Here is an example of a nice Philadelphia tenant screening list:
- No prior evictions
- Minimum of 3:1 income to rent ratio
- Smoking is not allowed
- Only dogs under 12 lbs. allowed as pets
- No history of criminal violence
- Credit score should not be less than 600
- No bankruptcies
Once the landlord is able to establish this list, the next step is to compare applications and select the ones that match. This way, the landlord gets to maintain a level of fairness and consistency as he/she reviews each application.
Avoid tenant screening discrimination of any kind. Philadelphia has strict anti-discrimination laws, which means a landlord risks legal culpability by denying housing to a person within a protected class. You can check out hud.gov website for further information on federal housing discrimination.
Philadelphia screening laws
- Apart from those protected by federal laws, the classes protected under Philadelphia laws include: gender identity, sexual orientation, source of income and victims of domestic/sexual violence.
- Landlords are allowed to ask adults for application fee when filling out the application.
- Philadelphia landlords have the right to deny an application if they feel the tenant has failed to meet the non-discriminatory criteria on their screening list.
Finding the Perfect Tenant Screening Services
After gathering your top applicants, the next step is to forward their information to a screening service company for professional background search. However, you’ll need to employ an affordable, thorough and accurate tenant screening service for this. There are lots of reputable companies that you can consult to help you discover the necessary information.
The following should be included in your report:
- Liens and judgment
- Details of previous address
If every landlord in Philadelphia can follow the tenant screening rules and regulations of the city, they’ll all have better set of tenants.
[Step Two] Guide for Becoming a Philadelphia Landlord:
There are some documented rights ascribed to Philadelphia tenants regarding health standards and safety. Landlords are obliged to follow these requirements under certain city inspection and license requirements. Here are some of the documents that outline these requirements.
Housing Rental Licenses
Housing Rental Licenses must be obtained for all housing rentals. Before obtaining this license, applicants are mandated to obtain their Business Tax Account Number, Commercial Activity License, Social Security Number or Federal Tax Identification Number, and Zoning Approval (if you’re renting two or more units). Licenses can be obtained for $50/unit and requires annual renewal.
L&I CODE VIOLATIONS: There shall be no renewal or issuance of license if there are any outstanding violations against the licensing property under the Philadelphia Building Construction and Occupancy Code.
TAX DELINQUENCY: There shall be no license renewal neither will there be issuance of license to any entity that has defaulted in the payment or filing of City taxes.
Residential property owners are mandated to provide every new tenant with the “City of Philadelphia Partners for Good Housing” brochure including the supplement provided by the license and inspections department under the Philadelphia Property Maintenance Code (Section PM-102.6.4).
Residential property owners are also mandated to provide their tenants with Certificate of Rental Suitability from the license and inspections department at least 60 days before they assume control of the residence. This is to certify that all the necessary licenses have been obtained and that there are no critical code violations.
Landlords are mandated under the Lead Paint and Disclosure Certification law to ensure that any property rented to a family with children under the ages of 6 is lead safe. Visit the health department’s Lead Paint Law page for more information.
Property and Real Estate Rental Forms
Certificates and Permits
The Department of Licenses & Inspections is responsible for reviewing construction plans and conducting building inspections to guarantee the safety of workers and the entire public at large. You must get a building permit before you begin any project that involves enlarging, changing, repairing and adding or demolishing a structure, or installing systems or equipment in a structure. You might also need to get plumbing and electrical permits for new or old buildings.
You must obtain a Commercial Activity License for any property that has up to 4 or more residential units. There’s an exception for structures with 4 residential units where the owner occupies one or more of the units.
Apply in person
Department of Licenses and Inspections
License Issuance Unit - PSC
1401 John F. Kennedy Boulevard
Philadelphia, PA 19102
You’re required to come with proof of occupancy which could be a valid Pennsylvania issued Driver’s License or your most recent utility bill from a gas, telephone or electric company reflecting your name, unit number and address. Water utility bills are not considered proof of occupancy.