Finding the perfect tenant can be a challenge for property managers and landlords and indeed, not all tenants are ideal, which can put discerning landlords at a risk of violation of the federal Fair Housing Act.
The Fair Housing Act was passed in 1968 as an extension to the historic Civil Rights Act of 1964 and originally protected renters from discrimination based on race, color, religion, and national origin. Since that time, the act has been expanded to include discrimination based on disabilities, gender, and families with children.
Some of these may seem to be straightforward, but more than 170,000 cases of Fair Housing Act violations were filed between 2000 and 2016 with nearly 32,000 cases being reported as "no reasonable cause," over 49,000 cases being race related and an astonishing almost-70,000 being cases filed on a disability basis.
And since HUD has increased the amount of fines for violations of the Fair Housing Act, property managers and landlords should be well-informed when it comes to advertising, screening, and renting potential tenants. One thing to note: HUD reports that this Act applies to all property managers, landlords, and financing institutions but "in very limited circumstances, the Act exempts owner-occupied buildings with no more than four units, single-family houses sold or rented by the owner without the use of an agent, and housing operated by religious organizations and private clubs that limit occupancy to members."
It's important for you to research on your own and familiarize yourself with the regulations within the Act. Meanwhile, here are some tips to help you avoid Fair Housing Act violations.
Watch Your Advertising
While you may want to make your rental as appealing as possible, be careful that you don't include things that could be legally construed as discriminatory. For example, by advertising that your unit is "walking distance to [shops/dining/etc.]," you could be unintentionally alienative those who are unable to walk.
Avoid Exclusionary Terms
It's tempting - even sometimes suggested - that property listings be as personal as possible but this can be difficult when trying to advertise with the Fair Housing Act in mind. As a rule, don't use exclusionary words like "no" or "only" unless these are related to law enforcement such as, "No drugs." Other words and phrases that could be misinterpreted are things like, "perfect for retirees," "exclusive," and "safe," as these terms could be construed as a preference of a certain race, class, or age.
Describe the Property, Not the Tenants
When describing the unit and/or property, stick to the facts: number of bedrooms and bathrooms, amenities, size, etc. but not the potential renter or current tenants. For example, you clearly would not want to advertise the unit as being a "great family neighborhood," even if it is.
Watch The Landmarks
While your unit may be most easily described as just across the street from the city's most prominent Cathedral, it can be taken as a religious affront to use spiritual buildings or any other landmarks that might isolate a prospective tenant due to race, age, religion, or gender.
Be Mindful of Your Words
When a prospective tenant shows interest in a property and the landlord, real estate agent, or property manager uses language that will discourage or encourage them from renting, this is known as steering. Your intentions may be wholesome when you tell a potential Asian tenant that there are other Asians renting on the property but this is an example of steering.
Don't Anticipate Their Needs
You might mean well by feeling the prospective tenant will be ill-suited for the environment but this is not your decision. You'll be able to do the necessary background checks, screenings, and interviews to make a determination if they will be able to handle their renter's obligations to you but as you are showing them the unit, bear in mind that any language or action that would influence their choice to rent or not rent the unit can be considered steering. Just keep the conversation factual.
Don't Assume Anything About Disabilities
Don't Exclude Units
If you have a potential tenant come to view the property and they come with a wheelchair, don't assume they won't be able or willing to have a unit on another floor. Treat such an applicant the way you would anyone else and recognize they will likely let you know if they need any special accommodations or considerations. If they ask you about these things, you can explain units that may be more suited to their needs. It could be their wheelchair is a temporary situation so wait for them to offer the information.
Watch the Wording of Written Policies
When you approve an applicant to rent a unit, you will likely have written policies that are not only provided to them upon renting the unit but also will be posted in common areas such as pools, playgrounds, or gyms.
While it may seem practical to say a certain area is prohibited to children, a more responsible way to phrase it would be to indicate the area should not be enjoyed by anyone under a certain age without adult supervision. Avoid making blanket statements about a certain class.
No Pets Doesn't Include Service Animals
If you have a pet policy that limits the size or type of animals permitted or or a no-pet policy, be aware that a lawsuit can be filed against you for not allowing a person with a service animal to rent. In 2014, a Florida tenant filed a disability descrimination suit and was awarded $5,000 in damages plus more than $100,000 because he was ordered to leave his unit due to his having an Emotional Support Animal (ESA) for his Post Traumatic Stress Disorder.
In the end, the best way to avoid any violations of the Fair Housing Act is to avoid doing or saying anything that might persuade or dissuade a prospective tenant. Even if, upon meeting them face-to-face, you draw up unfavorable personal conclusions, you may be surprised once you do your due diligence and perform your tenant screenings, background checks, reference checks, and credit checks, you will be able to come to a fully informed conclusion on whether or not they are the best fit for the unit.
VerticalRent is an expert in helping landlords and property owners find the right tenants for their rentals. Contact us today to see how we can help you stay safe from Fair Housing Act violations or to learn more about the many tools we provide landlords and tenants to make sure everyone is happy and protected.
About the author
Matt Angerer is the Founder and President of VerticalRent. He enjoys writing on a variety of topics that help Landlords, Property Managers, and Renters across America. He is particularly interested in helping renters understand their local marketplace, pick the best places to live, and find an awesome roommate. Since 2011, VerticalRent has grown to service over 100,000 landlords and renters across America.