Fair Housing Legislation: A Primer
The Fair Housing Act was first adopted in 1968 and covers most housing in the United States. In 1988, the U.S. Department of Housing and Urban Development increased its power to enforce the Fair Housing Act to ensure that minority groups are not discriminated against by landlords and real estate agencies. Since 1990, the Americans with Disabilities Act has provided protection for the disabled as well. The Disabilities Act works in conjunction with the Fair Housing Act in certain civil cases.
So, what exactly is the Fair Housing Act, and how does it affect you as a property manager?
- It protects minorities from being turned away by landlords and real estate companies solely on the basis of racial identity, religious affiliation, gender, nationality, or sexual orientation.
- It disallows property owners from indicating a preference toward a certain race, religion, or gender when advertising the rental or sale of a property.
- It makes it illegal for landlords and property managers to take threatening or intimidating actions toward prospective renters due to their race, religion, or gender.
These specifications can sound intimidating. However, if you employ some common sense and a professional business model that is free of personal prejudices, you won't have to worry about falling victim to civil cases in the future.
What are Your Rights as a Landlord
There are a few ways that you can optimize your property management practices to ensure that you don't violate any of the clauses of the Fair Housing Act. For instance, you can make sure that your tenant screening process is constantly updated. Your right to conduct a general background check and screen tenants for credit scores, eviction records, and bankruptcy is protected by law. You have the right to maintain a certain standard within the property you are renting out, and bad tenants can greatly affect your business by damaging your image and ratings on renters' websites. The courts understand this and will listen to your arguments if you are ever sued by a renter.
Staying Objective is Key
It can't be emphasized enough that an objective and professional leasing process with prospective tenants and renters is crucial. Developing a fair system for both property owners and renters can benefit both parties and is considered good practice.
It's important to avoid any language in your rental listings that may appear to be discriminatory. You can be upfront with your screening criteria as long as you do not reject renters based on protected statuses. For example, if you prefer to rent to professionals or students, you can indicate this preference in your rental listing. However, you can't require that renters follow a specific religion, and you can't mention that you prefer to rent to a particular gender in the listing or advertisement.
Once the tenant is ready to rent, use a standardized screening process that includes reviewing credit reports and criminal records, and speaking with landlord references. Information from these reports can be used to approve or deny the tenant without resulting in discrimination issues. Save yourself time and your potential tenant money by disclosing the non-discriminatory criteria that may disqualify them. That way, you won't waste time obtaining reports and references, and potential renters won't waste money on screening and application costs.
Remember, the law permits you to screen tenants, but only to a limited extent. Don't make decisions based on biased judgments. As a business person, it's important to practice the utmost professionalism. Once you grasp a full understanding of the Fair Housing Act and the consequences of violating it, you'll be on your way to becoming a much more informed property manager.
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