Resident Screening & Immigration

By Karen K. McCay and Anthony J. Adair
Pahl & McCay
225 West Santa Clara Street
Suite 1500
San Jose, California 95113
408/286-5100 (phone); 408/286-5722 (fax)
kmccay@pahl-mccay.com; aadair@pahl-mccay.com
 

Please understand that the information discussed in this Article is general in nature and is not intended to be legal advice. It is intended to assist owners and managers in understanding this issue area, but it may not apply to the specific fact circumstances or business situations of all owners and managers. You may need to consult applicable state and local laws. For specific legal advice, consult your attorney.

With the passage of California Civil Code Section 1940.3, many landlords have been asking whether they can still ask applicants for social security numbers to determine whether an applicant meets the financial requirements of the landlord’s tenant screening criteria.  The answer is a qualified yes.  So long as the owner/operator provides alternative means for screening applicants who do not have social security numbers, Civil Code Section 1940.3 does not require otherwise compliant landlords to change their tenant screening process.

On January 1, 2008, a new law took effect which has some potential implications for landlords as it pertains to applicant screening.  The relevant sections provide as follows:

(b) No landlord or any agent of the landlord shall do any of the following:

(1) Make any inquiry regarding or based on the immigration or citizenship status of a tenant, prospective tenant, occupant, or prospective occupant of residential rental property.

(2) Require that any tenant, prospective tenant, occupant, or prospective occupant of the rental property make any statement, representation, or certification concerning his or her immigration or citizenship status.

(c) Nothing in this section shall prohibit a landlord from either:

(1) Complying with any legal obligation under federal law. 

(2) Requesting information or documentation necessary to determine or verify the financial qualifications of a prospective tenant, or to determine or verify the identity of a prospective tenant or prospective occupant.

California Civil Code § 1940.3

Like nearly every other creditor, most landlords use social security numbers to run credit checks on their applicants.  The new law creates an issue as to whether, by requiring the social security number, creditors are implicitly inquiring into the applicant’s citizenship status in violation of the statute.  Since there is an express exception within the body of the statute allowing landlords to request information necessary to determine or verify the financial qualifications of a prospective tenant, landlords may continue an existing policy of requesting a social security number or, alternatively, an Individual Tax Identification Number, to perform credit checks so long as they also have alternative criteria for processing applicants without a social security number such as allowing a co-signor or considering other factors to establish the credit-worthiness of the applicant.  Below are some general guidelines to address the concerns raised by this new law.

The purpose of financial requirements as part of the tenant screening process is to evaluate the credit-worthiness of the applicant.  A social security number is just one means to obtain information to determine whether the applicant meets your criteria, whatever it may be.  Under no circumstances should a landlord refuse to process an application because a person does not have a social security number.  If an applicant does not have a social security number, the property manager should ask for documentation necessary to establish the applicant’s identity which will allow them to run a credit check.  Landlords should not ask applicants for green cards, visas, or any other documents that directly bear on immigration status or country of citizenship.  Documents that should be acceptable to establish identity would include items such as a passport, a government-issued photo ID, or a driver’s license.  Note you should not ask for a “U.S.” Passport or “California” driver’s license which may trigger the provisions of the statute – any government-issued passport, I.D. or driver’s license should be acceptable. 

Second, landlords should treat all applicants the same and always run the credit check based upon the information provided.  Once the information is processed, landlords must then make a business decision as to the acceptability of the applicant under the objective resident selection criteria applicable to the particular property, just as was the case before this new law was passed.  The statute is not violated if your credit criteria excludes individuals with limited financial information and/or credit history and the application is rejected on that basis.  Under no circumstances, however, should anyone reject an application for an applicant’s failure to provide a social security number and you should consider having alternative criteria for when only limited information is available.  Your criteria may provide, for example, that persons with limited or no financial history may be accepted with or without additional conditions.  Conditions that may make the applicant an acceptable credit risk to the landlord in the absence of a full credit-history include such factors as an increased security deposit (not to exceed the maximum amount allowed by law) or a co-signor.  It is critical, however, that these additional conditions, if implemented, be applied in all situations where limited financial information is available, not just when an applicant does not have a social security number.

Lastly, for those landlords that operate federally subsidized housing under regulations which require household members to provide social security numbers or limit the availability of assistance to non-citizens, you must continue to comply with the mandates of the applicable program regulations.  As quoted above, section (c)(1) provides an express exception to the prohibitions of the statute as necessary to comply with any obligation under federal law.   


This article is meant to provide general information about the new statute.  We, therefore, strongly encourage property owners and managers faced with specific situations implicated by the statute to seek advice of their legal counsel.