Normal wear and tear should be expected when leasing rental property. However, if too many tenants occupy the property, the wear and tear on your property may be much higher because of the increased use of the space and its fixtures. An occupancy limit is one way to ensure your property is used in a reasonable manner -- but you must comply with the law on setting occupancy limits.
Not All Limits Are Lawful
In the past, occupancy limits have been used as a pretext to discriminate against potential tenants in ways that would otherwise be unlawful. For example, landlords may not discriminate against families with children or certain minority groups that often have more children or extended families. While the law allows you to place certain limits on occupancy, you may not do so for a discriminatory purpose.
The Uniform Housing Code
Lawful occupancy limits may vary from state to state and even from city to city. Many local governments don't have a rule that clearly establishes limits you can set without risking a complaint. However, government housing authorities generally rely upon the Uniform Housing Code for guidance. The Code requires that a living space must contain at least one room that is 120 square feet, with other rooms having a minimum of 70 square feet, except for the kitchen. An additional 50 square feet of area is required for each additional inhabitant beyond two.
The Fair Housing Act prohibits discrimination in renting property based upon race, color, national origin, sex and familial status, such as having children. The U.S. Department of Housing and Urban Development department has developed regulatory guidance on occupancy limits based on an internal memorandum written by General Counsel Frank Keating to determine whether an occupancy limit violates the Fair Housing Act.
The Keating Memorandum
The Keating Memorandum provides guidance, but following it does not ensure that you're proceeding legally. HUD starts with a presumption that an occupancy limit of two people per bedroom is reasonable, but that presumption can be rebutted. According to the memo, factors HUD uses to determine the reasonableness of an occupancy limit include the size of the bedrooms and unit, age of the children, configuration of the unit, limiting factors such as plumbing, electrical and sewers, state and local laws, and other issues such as discriminatory statements or actions by the landlord.
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