Setting Occupancy Standards Can Lead to Legal Problems

By Robert L. Cain, Copyright 2024, Cain Publications, Inc.

How can you conform to a law that has no specific, measurable requirements? Impossible? Perilous? Case in point are the occupancy standards for rental properties that HUD expects rental owners to abide by. A rental owner may have legitimate cause for limiting the number of people allowed to live in a property. That limit may be backed up by local ordinances and state laws, but the rental owner can still be charged with illegal discrimination against families with children.

The playing field tilts in favor of Fair Housing regulators who may have a bias against rental property owners. Years ago I attended a Fair Housing Conference and at one of the presentations the first words out of the presenter’s mouth and something that has stuck with me for decades, “Every landlord wants to illegally discriminate. It’s our job to catch them.”

My good friend John, since retired, owned rental listing company in Spokane, Washington. The first time I visited his office, I looked at his script for rental owners who wanted to list their rentals. One of the questions the screener asked was “Do you allow children?”

“That’s going to get you in trouble,” I told him. He insisted it wouldn’t because some rental units, such as studio apartments, are too small to allow children or even more than one adult. “You’re courting disaster, John,” I insisted. And he insisted that was legal.

Yes, it was legal, but the question invited a rental owner to say he or she didn’t allow children regardless the size of the unit. Disaster lurked.

In Spokane at that time, the Northwest Fair Housing Alliance was on the lookout for rental owners who wanted to illegally discriminate. Much of their funding came from the fines their investigations generated. Their bias? obvious from the sign on the wall you saw as you entered their offices, “If you’re not outraged, you’re not paying attention.”

I was paying attention and I was outraged. The “Fair Housing” people’s outrage came from a different direction though. A few months later, they got to John.

John had been obeying the law because he would tell rental owners kids are allowed where the unit’s size allowed for one or more children. Eventually exonerated, it still cost him thousands of dollars in legal fees and caused him to have to file bankruptcy, even though he had done nothing illegal, much less wrong.

John’s case focuses on the dilemma so many rental owners find themselves facing trying creating  occupancy standards both legal and protecting of their properties. After all, the more people living in a property, the more wear and tear on that property. How do you create such standards?

Occupancy standards can be considered suggestions at best, both confusing and undependable. You may follow the guidelines your find on the Fair Housing website and your local and state law to a “T,” but that isn’t all they look at before they decide if your decision about the number of occupants you will allow to live in one of your properties violates the Fair Housing Act. 

The Fair Housing Act itself doesn’t specify occupancy standards, only that it protects familial status. Congress did recognize that many state and local laws limit occupancy based on the number of people or square footage of a property. That supposed standard often gets touted as two people per bedroom. But Fair Housing attorney Teresa Kitay says, “The problem is all over the map. It is hard to advise anyone other than to say the strict two-per-bedroom policy is not likely to be immune from challenge.” You must consider the characteristics of a property and have a different policy for each property. One size doesn’t fit all.

On February 21, 1991, General Counsel Frank Keating of the Department of Housing and Urban Development (HUD) issued a memorandum explaining occupancy standards. Congress adopted them in 1998.  The two-per-bedroom policy only works sometimes.  Also to consider are the size of the bedrooms and the age of the children in the family. For example, a large bedroom (a size the Keating memo doesn’t delineate) can mean more than one person can use the bedroom, A smaller room (how small the memo doesn’t say) might be too small to be considered a bedroom. For example, a closet could well not be a bedroom at all, at least in the rental owner’s mind. But in the Fair Housing enforcers’ minds, that room might be perfectly fine because you can cram a small bed in it.

The age of the children can also be a factor. A baby can be okay to sleep in a one bedroom unit, but the age a child outgrows “baby” never gets defined. Likewise a rental owner cannot discriminate against a pregnant woman saying that her pregnancy means there’s another occupant.

The International Property Maintenance Code (IPMC) provides clear and specific standards.. They use actual room sizes to determine number of occupants. For example, in 404.4.1 it says “every bedroom shall contain not less than 70 square feet and every bedroom occupied by more than one person shall contain not less than 50 square feet of floor areas for each occupant thereof.” So in order for two people to occupy a bedroom, it would have to have at least 120 square feet of floor area. Well, maybe.

Even following the IPMC standards and local laws to the letter provides no protection from prosecution. What a rental owner says or does in addition to the actual occupancy standards can throw any “standards” in the trash and give the Fair Housing attorneys something to do. For example, if the rental owner says something that can be considered by the Fair Housing enforcers as discriminatory such as suggesting that an applicant with children would be happier living elsewhere, that’s work for lawyers. If a rental owner imposes additional fees for children, more work for lawyers. If a rental owner only enforces occupancy policies for those tenants with children, but allows extra adults to live in a unit while not allowing additional children, lawyers have more work to do. If a rental owner advertises a community as adults only or refuses to rent to people with more children than adults in the family, lawyer work again.

Adults-only communities have specific Fair Housing requirements that we won’t go into here.

Yes, you can set legal and legitimate occupancy limits, but you must be able to defend them as either a legitimate business decision or one that local and federal laws agree with and the Fair Housing enforcers will accept. And always take care about what you say and how you say it both verbally and in rental policies.

Sponsored by Zip Reports where they do employment and rental screening. Contact Robert L. Cain at

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