Indiana Code Title 32. Property § 32-31-8-7
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Sec. 7 . (a) The residential landlord-tenant statute (as defined in IC 32-31-2.9-2 ) does not prohibit an owner or a landlord from refusing to rent a rental unit on the basis of a reasonable occupancy standard.
(b) For purposes of this section, an occupancy standard is presumed reasonable if:
(1) it permits two (2) individuals per bedroom; and
(2) the owner or landlord:
(A) does not include infants less than one (1) year of age in the individuals per bedroom count under subdivision (1); and
(B) increases the number of individuals per unit by considering whether the configuration of a unit includes a:
(iii) finished basement; or
that could reasonably be used as a sleeping area, unless doing so would violate applicable state and local codes, including fire codes.
(c) An owner or landlord is not required to consider a kitchen, dining room, living room, bathroom, hallway, or closet as a sleeping area.
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