Complying with Fair Housing Laws: Avoiding Discrimination

Building wealth through rental real estate is a rewarding endeavor, but it comes with significant responsibilities. One of the most critical is understanding and adhering to Fair Housing Laws. These laws are designed to ensure everyone has an equal opportunity to rent or purchase housing, regardless of certain protected characteristics. Violating these laws can result in hefty fines, legal battles, and significant damage to your reputation. This guide will help you navigate the complexities of Fair Housing Laws and implement practices that promote fairness and avoid discrimination.

What are Fair Housing Laws?

The cornerstone of fair housing in the United States is the Fair Housing Act, enacted in 1968. This federal law prohibits discrimination in housing based on:

• Race
• Color
• National Origin
• Religion
• Sex (including gender identity and sexual orientation, in some jurisdictions)
• Familial Status (presence of children under 18)
• Disability

It’s crucial to remember that many states and local jurisdictions have their own fair housing laws that may offer even broader protections. These laws may add additional protected classes, such as:

• Age
• Marital Status
• Source of Income
• Sexual Orientation
• Gender Identity
• Military Status

Always research and understand the specific fair housing laws applicable in your area to ensure full compliance.

Understanding Protected Classes

A protected class is a group of people who share a common characteristic and are legally protected from discrimination. Understanding these classes is the first step in avoiding unintentional discrimination. Here’s a closer look at some of the federally protected classes:

Race and Color

Discrimination based on race or color is illegal. This means you cannot deny housing, set different rental terms, or make false statements to anyone based on their race or skin color.

National Origin

You cannot discriminate against someone because of their place of birth, ancestry, culture, or linguistic characteristics. This includes refusing to rent to someone based on their accent or perceived immigration status.

Religion

Landlords cannot discriminate against tenants based on their religious beliefs or practices. This includes displaying religious symbols or artifacts in common areas or attempting to impose your own religious views on tenants.

Sex (including gender identity and sexual orientation)

Discrimination based on sex is prohibited, and this protection increasingly includes gender identity and sexual orientation. You cannot refuse to rent to someone because they are male or female, transgender, or identify as LGBTQ+.

Familial Status

This protects families with children under 18. You cannot refuse to rent to someone because they have children, or impose unreasonable restrictions on children playing in common areas. There are limited exceptions for senior housing (55+ or 62+).

Disability

This protects individuals with physical or mental disabilities. Landlords must make reasonable accommodations for people with disabilities, such as allowing service animals or modifying the premises to make them accessible. You cannot refuse to rent to someone because of their disability or ask intrusive questions about their medical history.

Prohibited Practices: Actions That Constitute Discrimination

Fair Housing Laws prohibit a wide range of discriminatory practices. Here are some common examples to be aware of:

Refusal to Rent or Sell

You cannot refuse to rent or sell housing to someone based on their membership in a protected class. This includes falsely claiming that a property is not available or delaying the process for certain applicants.

Setting Different Terms and Conditions

You cannot impose different rental terms or conditions based on a protected class. This includes charging higher rent, requiring larger security deposits, or enforcing stricter rules for certain tenants.

Discriminatory Advertising

Your advertising cannot express a preference for or against any protected class. Avoid phrases like “suitable for singles” or “ideal for mature adults.” Focus on the property’s features and amenities, not the type of tenant you prefer.

Steering

Steering occurs when you direct potential tenants to certain neighborhoods or buildings based on their protected class. This is illegal and can perpetuate segregation.

Harassment and Intimidation

Any form of harassment or intimidation based on a protected class is a violation of Fair Housing Laws. This includes making derogatory comments, creating a hostile living environment, or threatening eviction.

Refusal to Make Reasonable Accommodations

As mentioned earlier, landlords are required to make reasonable accommodations for people with disabilities. This might involve allowing a service animal, modifying the property to improve accessibility, or adjusting policies to accommodate a tenant’s specific needs.

Retaliation

You cannot retaliate against a tenant for exercising their rights under Fair Housing Laws. This includes filing a complaint, reporting discrimination, or requesting a reasonable accommodation.

Best Practices for Fair Housing Compliance

Avoiding discrimination requires a proactive approach. Here are some best practices to help you comply with Fair Housing Laws:

Develop a Written Fair Housing Policy

Create a clear and comprehensive Fair Housing Policy that outlines your commitment to non-discrimination. Share this policy with all employees, agents, and contractors involved in your rental business.

Train Your Staff

Provide regular Fair Housing training to all staff members who interact with tenants or applicants. This training should cover the basics of Fair Housing Laws, prohibited practices, and how to respond to potential discrimination claims.

Use Objective Tenant Screening Criteria

Develop a set of objective and consistently applied tenant screening criteria. Focus on factors like credit history, income verification, and rental history. Avoid using subjective criteria that could be used to discriminate against a protected class.

Be Consistent in Your Application Process

Treat all applicants equally throughout the application process. Use the same application form, ask the same questions, and apply the same screening criteria to everyone. Document all interactions with applicants and maintain detailed records of your decisions.

Avoid Discriminatory Advertising

Review all your advertising materials to ensure they are free from discriminatory language. Focus on the property’s features and amenities, not the type of tenant you prefer. Use inclusive language and avoid making assumptions about potential tenants.

Document Everything

Keep meticulous records of all tenant interactions, application decisions, and any complaints you receive. This documentation can be invaluable in defending against potential Fair Housing claims.

Be Mindful of Your Language

Be aware of your language and avoid making comments that could be perceived as discriminatory. Even unintentional remarks can lead to misunderstandings and legal problems.

Stay Informed

Fair Housing Laws are constantly evolving. Stay informed about changes in the law and update your policies and procedures accordingly. Consult with an attorney or fair housing expert if you have any questions or concerns.

Tenant Screening: A Critical Area for Fair Housing Compliance

Tenant screening is a crucial part of the rental process, but it’s also an area where discrimination can easily occur. Here are some specific guidelines for fair and legal tenant screening:

Credit History

You can consider an applicant’s credit history, but make sure your criteria are consistently applied and directly related to their ability to pay rent. Avoid using credit scores as the sole basis for denying an application. Consider allowing applicants to explain negative entries on their credit report.

Criminal Background Checks

Using criminal background checks requires careful consideration. A blanket policy of rejecting all applicants with a criminal record can have a discriminatory impact on certain protected classes. Instead, consider the nature and severity of the offense, the time that has passed since the offense, and the applicant’s overall rental history. Consult with an attorney to ensure your criminal background check policy complies with local laws and regulations.

Income Verification

You can require applicants to provide proof of income, but make sure your income requirements are reasonable and consistently applied. Consider accepting alternative forms of income, such as government assistance or alimony, to avoid discriminating against certain applicants.

Rental History

You can contact previous landlords to verify an applicant’s rental history, but make sure your questions are consistent and relevant. Avoid asking questions that could reveal protected characteristics, such as race or religion.

Avoid Asking Prohibited Questions

Never ask applicants questions that could reveal their membership in a protected class. This includes questions about their marital status, family plans, religion, or disability. Stick to questions that are directly related to their ability to pay rent and maintain the property.

What to Do if You Receive a Fair Housing Complaint

Even with the best intentions, you may still receive a Fair Housing complaint. Here’s what to do:

1. Take it Seriously: Treat every complaint seriously, no matter how minor it may seem.
2. Document Everything: Keep detailed records of all correspondence and actions taken in response to the complaint.
3. Consult with an Attorney: Contact an attorney with experience in Fair Housing Law to advise you on how to proceed.
4. Cooperate with the Investigation: Cooperate fully with any investigation conducted by the Department of Housing and Urban Development (HUD) or a state or local fair housing agency.
5. Consider Mediation: Mediation can be a valuable tool for resolving Fair Housing disputes amicably and avoiding costly litigation.

The Importance of Fair Housing: Beyond Legal Compliance

While complying with Fair Housing Laws is a legal requirement, it’s also the right thing to do. Creating a welcoming and inclusive rental environment benefits everyone. By providing equal housing opportunities, you can foster a diverse and thriving community, attract responsible tenants, and build a positive reputation for your rental business.

Conclusion

Navigating Fair Housing Laws can seem daunting, but understanding your obligations and implementing best practices is essential for building a successful and ethical rental real estate business. By prioritizing fairness, promoting inclusivity, and staying informed about the latest legal developments, you can avoid discrimination, protect yourself from legal liability, and contribute to a more just and equitable housing market. Remember, treating everyone with respect and dignity is not just a legal requirement – it’s the foundation of good business practice.