If you’re a landlord, you’re likely already familiar with fair housing legislation. Fair housing laws protect tenants from discrimination in housing for being a member of any group or having a particular identity.
The idea is simple in theory. In practice, however, complying with fair housing laws can be a bit more challenging. Besides avoiding unequal or discriminatory practices in your rental business, you also need to carefully review your rental application and tenant screening processes. The language you use in your application matters, and violations aren’t always obvious.
For these reasons, reviewing your materials and screening processes with a legal expert is vital.
In the meantime, the following sections will give a brief overview of fair housing legislation and the impact it has on your rental business.
What is the Federal Fair Housing Act (FHA)?
The Federal Fair Housing Act (FHA) was the first major law written to prevent housing discrimination.
It was initiated after the Civil Rights Movement, during which many racial discriminatory practices were brought to the attention of the courts. Discrimination was (and is) especially pertinent to housing. In the 60s, many black families were denied homes on account of their race. To prevent these practices, the FHA was adopted in 1968.
So what does it do? The FHA defines unlawful discrimination in homeownership, mortgages, housing assistance, and other housing-related activities. This means if you participate in housing discrimination, you have violated federal law.
Who is protected by the FHA? According to the law, seven classes are protected: race, color, national origin, religion, sex (including gender and sexual orientation/identity), familial status, and disability.
What Activities Does the FHA Prohibit?
In addition to the broad prohibition of housing discrimination, the FHA also names specific activities and actions which are illegal. Beyond blatant harassment, here are a few you should know.
- Landlords may not refuse to rent, negotiate, or otherwise make housing unavailable to a tenant that belongs to any of the seven protected classes.
- You may not set different terms, conditions, or privileges for people in different groups, provide anyone different housing services, or lie about whether certain housing is available for sale or rental.
- You must not print or publish a statement or ad that indicates discriminatory preferences or limitations. This restriction is critical for writing your ads and rental applications. Put simply, you may not make any mention of or ask any questions about tenants’ status as part of the protected classes.
- Even if accidental, it’s illegal to discourage prospective tenants from renting any available property.
How to Comply with the FHA
To get you started interpreting the FHA, here are a few guidelines for complying with fair housing.
Screen your tenants the same way, every time.
Not only should you have a set system for tenant screening, but you should also document this system. If you do encounter a discrimination claim, you’ll already have documentation that your procedures are fair.
Have set standards and minimums.
Before you screen any tenants, set standards. For example, have a number in mind for both minimum income and credit score you’ll accept, and document these numbers.
Never steer tenants toward different units or encourage/discourage them from any units.
This tip applies to showings. Always offer tours of all your available units, and never lie about how many or which ones are open.
Be careful with language.
The language you use on your rental application must be fair and inclusive. Ask about allowed qualifiers like income, credit, felonies, evictions, pets, and smoking. Delete any questions that reference a protected class. You should also ask a legal expert to review your writing.
Local/State Fair Housing Laws
The FHA is not the only fair housing law to know. You’ll also need to comply with state and local fair housing laws.
For example, some states further protect renters based on citizenship, age, marital status, veteran status, medical condition, and income source.
Consequences
The consequences of violating any fair housing law are serious. First violation fines and attorney fees could start around $16,000, while additional penalties at the Federal Court can reach as high as $100,000.
Not only are lawsuits expensive and tedious, but they also damage your reputation. Would-be tenants will likely find out about the lawsuit and steer clear of your rentals.
If you follow the tips above and review your policies with a lawyer, fair housing shouldn’t be a scary thought. The law was designed to promote equal access and equality, two principles you should already have instated in your rental business. With a little thought and care, you can establish equality as a central principle of your rental business.
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