To avoid costly lawsuits and discriminatory practices, you must be aware of the Fair Housing Act (FHA) and the different types of protected classes this federal law includes. Just because you don’t understand the law does not mean you can ignore it; therefore, we have included the essential information you need as a landlord in order to follow the law and treat your tenants and applicants fairly.
What is the Fair Housing Act?
The Fair Housing Act was enacted in 1968 during the Civil Rights movement in order to ensure that anyone who applies for housing is treated equally and fairly. The law was created under the belief that everyone has the right to rent or purchase a home, regardless of their status as a member of a protected class. The act prohibits discrimination based on the following:
- National origin
- Gender/gender identity
- Familial status
- Marital status
- Participation in the Section 8 program or other welfare programs
- Many states prohibit discrimination based on sexual orientation
You must be aware of this law as a landlord and ensure that none of your practices are discriminatory towards any protected classes.
Marketing your unit
The Fair Housing Act makes it illegal to indicate in your advertisements that you prefer a certain type of tenant over others. Avoid using exclusionary words in your marketing like “no” or “only” unless the exclusion is clearly allowed by law, such as “no drugs” or “no illegal activity.” Don’t describe the dwelling in terms of the type of tenant you want, such as “great for a growing family” or “perfect for a single executive.”
The safe route is to simply describe your property and its amenities rather than the potential buyer. However, if you list the property this way, you risk it getting lost in the shuffle of similar listings. Think creatively when drafting an advertisement to ensure that it is targeted and appeals to the type of tenant you want to attract. For example, instead of writing “perfect for a single executive,” you might advertise the unit as “centrally located in the heart of the upbeat, downtown area.” No matter what route you choose when it comes to advertisement, make sure that whatever you say does not exclude anyone in order to avoid a potential discrimination lawsuit.
Denying a tenant
You cannot ever deny an applicant based on their membership in a protected class; if you do, you will be at risk of a discrimination lawsuit. However, you can deny an applicant based on reasons that are not a part of protected classes. The following cases are legally sound reasons to reject an applicant.
1. Their income is too low, or you cannot verify their income.
If you review an applicant’s stream of income and determine that they may not be able to pay the rent each month, you have valid reason to deny their application. You can also deny the applicant if you cannot verify that the income the tenant claims to have is true. Keep in mind that if they are a part of government subsidy programs such as Section 8, you cannot deny their application.
2. The tenant has a pet.
You can have a no pet policy in place or you can charge your tenants a pet rent and/or deposit. You may not, however, deny a tenant if they have a service animal. Some states will allow you to deny a tenant with a service dog based on the breed of the dog, while other states allow you to require a doctor’s note explaining the necessity of the animal. Many states also allow you to deny tenants with emotional support animals. Because the law differs greatly from state to state in regard to service animals, you should look into the law specific to your property’s location to make sure that you avoid discriminatory practices.
3. The tenant smokes.
Smokers are not a part of a protected class and you may want to consider banning smoking in your properties. Even if you have no personal qualms with smoking, it can be a health hazard to other tenants, cause long-term odor problems, be a fire hazard, and lead to expensive property damage.
4. The tenant has been convicted of a crime.
During the applicant screening process, you should always make sure that you review the tenant’s criminal history thoroughly. Have a set standard for potential tenants with a criminal history, such as “no more than two misdemeanors,” or “no violent crimes” so that you treat each applicant the same. You should also review the criminal background check holistically and evaluate if the applicant seems to have changed since the crime was committed.
5. The tenant has a history of non-payments or eviction.
You almost always want to deny a tenant if you find they have a history of non-payments or evictions, and thankfully the law allows you to do this. Applicants with this type of a history are more likely to be problem tenants, so keep this in mind during the screening process.
You may also legally deny an applicant if they lie on their rental application; fail to completely fill out the rental application; do not authorize a credit check and criminal background check; have a low credit score; have a prior foreclosure or bankruptcy; and/or will not agree to your rental terms. Even if the applicant is a member of a protected class, you may deny them for any of the following reasons above.
Discriminatory practices to avoid
Never treat your prospective tenants differently or have different requirements for different tenants. This means that when you screen potential tenants you must follow the same process for every applicant in order to make sure that you are not discriminating against anyone. If you require one thing from one applicant, such as a criminal background check, you must require it from all other applicants. Avoid asking excessive questions during the screening process, because this can also be seen as discrimination. Questions asked during a screening should only be related to tenancy and should never be overly personal. For example, do not ask if a tenant is married or if they have children; instead you can ask how many people will be living in the unit, since this is not a question about their familial or marital status.
Once an applicant is accepted and becomes your tenant, you should continue to treat them equally and avoid implementing different rules and procedures for different tenants. Each rental agreement should have the same rules and all rules should be enforced equally. If you have identical units on the same property, charge the same rent price and deposits in order to avoid a potential discrimination lawsuit. In addition, you should avoid harassing or intimidating current tenants, because this too can be seen by the courts as discriminatory. Harassment includes requiring unfair rental terms or trying to exchange renting your property for anything besides money. As long as you are friendly and professional with your tenants and treat them fairly, you will avoid discriminatory harassment claims.
Should you want to deny an applicant, you can never lie about a unit’s availability simply because you do not want to rent it to them. You must have a valid, non-discriminatory reason for denying an applicant. Wait until you’ve accept another applicant before you use this as a reason for application denial so that you are always telling the truth.
During the preliminary application process, you should avoid recommending certain units or certain properties to a tenant based on their protected class. You are however, permitted to recommend specific units or locations to someone based on their personal preferences. The bottom line is that you should never recommend a unit or property because you think the tenant “belongs” there; this is discriminatory and can lead to a lawsuit. To avoid biased recommendations, simply stay clear of steering tenants to specific units in the first place. Provide applicants with potential options and allow them to decide independently.
Lastly, you must never refuse to accommodate a reasonable disability request. If a disabled tenant asks you to make accommodations, you should evaluate whether or not the request is reasonable. Accommodations can be requested in both the individual dwelling and public and common areas. You may deny an accommodation request if it will pose a financial or administrative burden on you, or if it requires intense alteration of the property. You are also legally allowed to request verification that the tenant is, in fact, disabled and needs the accommodation to fully enjoy the use of the property. You must also make sure that you respond to all requests for disability accommodation in a timely manner; if you fail to do so, this can be seen by the courts as discriminatory.
The bottom line
As long as you treat each tenant and applicant equally, you will avoid lawsuits or win any discrimination lawsuits brought against you. Be aware of which classes are protected and which are not. With this simple information in mind, you protect both yourself and your tenants.