Landlords must understand the Fair Housing Act (FHA) as it is essential for effective property management. The FHA aims to reduce discrimination against protected classes and Ignoring this law can lead to lawsuits or hefty fines.
This article will help you prepare for managing your rental space and avoid the potential losses that can arise from violating this act or remaining uninformed.
History of The Fair Housing Act
In 1968, the Fair Housing Act (FHA) was established so the rights of individuals seeking to buy, finance, or rent a home are protected. The Act promotes fair and equal treatment in the opportunities for property ownership or rental.
Before this law was enacted, property sellers and landlords often negotiated only with parties they favored. This resulted in unfair practices and discrimination. The creation of the FHA aimed to eliminate discrimination in housing. The Act was further amended in 1988 to strengthen its protections.
The FHAt ensures that real estate renters and sellers prevent discrimination against protected classes in housing. If housing services are only offered to a select few, it creates an unfair situation for other buyers and renters. Some would be limited in finding a residence.
What are The Protected Classes
The Fair Housing Act protects seven classes to reduce discrimination against buyers and renters based on:
- Race
- Color
- Sex
- Religion
- Disability
- Familial Status (having children below 18 in a household, including pregnant women)
- National origin
Exemptions To The Fair Housing Act
Certain situations may qualify for exemptions under the FHA, including:
- Owner-occupied homes with fewer than four rental units
- Single-family homes that are rented or sold without the assistance of a broker
- Private clubs or organizations that are exclusive to members
- Religious organizations
What Are Discriminatory Practices to Avoid?
To ensure compliance with the law it’s crucial to understand what constitutes discriminatory practices. Here are potential examples of unfair treatment or discrimination against individuals in protected classes:
- Telling a potential renter that your rental unit is occupied when it is, in fact, vacant.
- Failing to adjust your policies to accommodate a disabled tenant, such as not allocating a parking space.
- Communicating more aggressively with some tenants than others.
- Refusing to make necessary changes to the property at the expense of a disabled renter.
- Denying the rental application of a visually impaired prospective tenant because they have a service dog. Although your policy does not allow pets, service dogs are not categorized as pets because they assist individuals with disabilities.
- Posting advertisements targeting a preferred group that excludes individuals from protected classes. For example, marketing the vacant unit to a specific nationality.
- Enforcing different application criteria for individuals belonging to protected classes.
- Ignoring property maintenance or repair requests, causing a tenant belonging to a protected class to leave.
- Assigning lower-quality rental units to tenants from protected classes.
- Limiting access to certain amenities for renters belonging to protected classes.
By being aware of these exemptions and discriminatory practices, landlords can create a fairer and more inclusive rental environment.
How is The Fair Housing Act Enforced?
The Department of Housing and Urban Development (HUD) is in charge of enforcing the Fair Housing Act. This department is responsible for resolving complaints about discriminatory practices under the FHA. When HUD receives a discrimination complaint, it typically employs two strategies:
Investigates The Case
HUD initiates the investigation process for claims of FHA discrimination. The situation is assessed to verify its validity. It does not assume the report made is true right away but it arranges an independent and unbiased review.
If the investigation confirms a violation of the Fair Housing Act, HUD will implement appropriate measures to ensure compliance with the FHA.
Conduct Testing
To determine whether discriminatory practices are occurring, HUD may act as potential tenants to investigate the claims. This can involve face-to-face or telephone interactions with landlords. Additionally, advertising materials may be examined in detail to assess whether a landlord has violated the Fair Housing Act.
Penalties Under The Fair Housing Act
Penalties for discriminatory activities can vary depending on how severe the violation is. Fines can also differ based on whether the offense is regarded as a simple violation or if it occurred once or repeatedly.
Following The Fair Housing Act
Landlords should familiarize themselves with the Fair Housing Act (FHA) and follow its guidelines. This minimizes the risk of complaints or lawsuits. Here are key tips to help prevent any discriminatory complaints under the FHA:
- Maintain Consistency: Apply the same set of standards and requirements throughout your tenant screening process.
- Review Marketing Materials: Analyze your marketing advertisements to ensure they are inclusive of all potential tenants.
- Avoid Leading Questions: During interviews with prospective tenants, refrain from asking leading questions related to protected classes.
- Show Respect: Treat all tenant candidates with respect, even during the screening phase.
- Correctly Identify Service Animals: Do not label service animals as pets; they have special status under the law.
Bottom Line
Landlords must do their share in preventing housing discrimination. It is crucial to comply with relevant laws to limit violations. Here are some guidelines to follow:
- Review your marketing advertisements for any discriminatory language or conditions.
- Be mindful when interacting with potential renters, whether in person, over the phone, or online.
- Ask relevant questions during the screening process and avoid any discriminatory follow-up inquiries.
Partnering with a trusted property management company, such as East Bay Property Management can help you with ensuring compliance with the Fair Housing Act.
We help you attain your business goals by offering dedicated support and thorough protection for your investment property and residents. Contact us today to learn more about our full-range services!