As a property owner, you’re naturally cautious about who rents out your apartment; however, did you know that Fair Housing Laws means that you can’t give preferential treatment to one candidate over another? As the general manager for PropertyADVANTAGE, a San Diego-based residential property management company, I continuously need to remind property owners that they need to know and uphold Fair Housing regulations to avoid any unnecessary litigation or investigations. It is fairly easy to accidentally discriminate if you don’t know all the laws. Here are the basics you should know.
An Overview of Federal Fair Housing Laws
Federal fair housing laws require that individuals of the same income level in the same housing market have fair and equal access to a variety of housing options regardless of their race, color, religion, sex, handicap, familial status, or national origin. These rules are typically supplemented by state laws. For instance, California law extends protections to include ancestry, marital status, age, source of income, medical condition or sexual orientation. Check with your local state regulations to find out if there are additions to the federal inclusions.
At this point, you’re probably thinking to yourself that there is no possible way you could be practicing discrimination in your tenant search. But, you may be surprised.
According to an annual report compiled by the U.S. Department of Housing and Urban Development, there were 8,368 fair housing complaints filed in 2013 regarding discrimination. Even if the charge is baseless, a frivolous lawsuit could cost you thousands of dollars to clear.
Basic Practices for Fair Housing
It is better to know the law and adopt new assurances in your tenant screenings to avoid discrimination altogether. There are several basic practices you should follow to comply with Fair Housing and avoid discrimination:
- Neutral and Consistent Evaluations: Establish neutral policies that you apply to all potential residents. Everyone must have the same opportunity to lease your property. For example, background checks and credit checks must be done for all applicants, not just a few. Likewise, any rebates or specials must be available to every applicant. One of the best ways to avoid discrimination is by having a screening process that you follow for every single applicant, including the exact questions you ask during the interview. You also cannot give information to some people and not others, so be sure that every applicant is receiving the same treatment. Any deviations could be seen as discrimination.
- Provide All Choices: Along the lines of giving the same information to everyone, be careful about narrowing options for people. Let them tell you what they want and provide them a list of all available choices. For instance, don’t eliminate a particular unit because someone is disabled or has a family, let them tell you their criteria. Making those kinds of judgment calls can be seen as discriminatory and can get you in a lot of trouble.
- Neutral Advertising: You probably noticed that neutrality is the key. Advertising can discuss the amenities, size, the number of units and other factors, but it should not describe the “type” of person who can rent. For instance, you may think that your apartment is great for a family, or maybe it’s better for a bachelor. In any case, don’t mention it. Allow prospective tenants to decide for themselves. Note also that advertising is broadly construed to include any statement that promotes the property, from newspaper classifieds and online listings to verbal statements.
- Train Staff: If you have a management staff, train them to follow these policies in their everyday practices. According to FindLaw.com, your employees should minimize your risk to litigation and demonstrate your commitment to fair housing. If a staff member violates one of these laws, you could be personally liable for the infraction. This also means that you need to be careful about the property management company you choose to represent your properties. Make sure they are well versed in Fair Housing laws.
- Make Your Property Accessible: The Americans with Disabilities Act requires that all buildings open to the public be accessible for people with disabilities, which requires your building to provide ramps, signs in braille and other “reasonable modifications.” If you have a qualified tenant with a disability, you need to make arrangements for that person. You cannot simply deny the applicant because the property doesn’t fit their needs. If you are part of an HOA, the board needs to make modifications to the outside of the building if it is not already accessible.
Common Discriminatory Practices
What this boils down to is this: You can refuse to lease to a resident for only one reason: Ability to pay rent. You can assess a tenant based on their credit rating, employment, and other obligations. Be careful so that you do not engage in some common discriminatory practices which may leave you vulnerable under the Fair Housing Act:
- Wrongful termination of rental agreement: Even though you own the property, you cannot cancel the lease agreement for just any reason – you must have clear evidence that the tenant violated the terms of your lease agreement.
- Refusal to rent the property: This one is pretty obvious, but bears repeating. You cannot refuse to lease your property because a particular person or family does not belong to a certain community or religion – that is blatant discrimination and will leave you vulnerable to litigation.
- Treat all residents the same: You cannot treat residents differently. If someone catches you doing that, you could be vulnerable to litigation. This includes providing special housing for particular residents or angling a particular group of people toward a specific type of housing. Additionally, you cannot select a tenant over another qualified tenant just because you like them. You really need to select the first qualified applicant that meets your requirements. This is hard for property owners to swallow, but trust me, it’s not worth the trouble.
Making Changes Can Save You Money
Discriminatory housing practices are investigated and litigated aggressively by state and federal authorities. In 2012, HUD recovered almost $60 million for a victim of housing discrimination. By understanding the law and making the right adjustments to your screening process, you can avoid spending a lot of time and money fighting a lawsuit that could have been easily avoided.
About Micki O’Toole:
As a property manager, the key to success has been my ability to consistently meet our owners’ needs while maintaining a professional and courteous relationship with tenants. My approach is to provide a comprehensive level of service, which includes an affiliation with one of the region’s top property management firms, PropertyADVANTAGE. Get in touch at [email protected].