The Fair Housing Act and Landlords: What You Should Know

In This Article

The Fair Housing Act (FHA) ensures any person can buy or rent a house or apartment wherever they want regardless of their race, ethnicity, gender, religious preference, disability, family status, or national origin. In 2015, the United States added discrimination based on sexual orientation or gender identity to the list of protected classes. 

As a landlord, you should be familiar with the FHA and what it covers. Both federal and local governments have rules regarding fair housing, and you need to understand these requirements to protect yourself and your property. Knowing the details of this legislation can prevent legal issues with tenants for violations involving discrimination. It can also help guide your marketing strategy so you avoid using language that can be construed as discriminatory.

Brief History of the Fair Housing Act

As part of the Civil Rights Act of 1968, the Fair Housing Act prevents housing discrimination and ensures equal opportunities for all tenants and homebuyers. It was enacted during the Civil Rights Movement and signed into law by then-president Lyndon B. Johnson. Over the years, the FHA has been amended to include protection for people with disabilities and to prevent discrimination based on gender or the number of children in a family.

Several court cases have brought about changes to the FHA to further protect citizens from unfair practices in renting and buying a home and to bring attention to this ongoing problem. Unfortunately, the FHA doesn’t actually list the words you can’t use in marketing communications for your rental property. So you must use your judgment to decide what works and what doesn’t. A good rule of thumb is to avoid exclusionary words like “no” or “only,” unless the exclusion is clearly allowed by law (e.g., “no drugs” or “no smoking”).

Protected Classes Under the Fair Housing Act

Let’s take a closer look at the protected classes under the FHA so you understand which groups have protection under this law, as well as how to avoid discriminating against potential tenants when advertising your rental unit or home for sale.

Federal protected classes

The Fair Housing Act prohibits discrimination in housing because of:

• Race or color: A landlord, lender, or developer cannot discriminate against an individual from renting or owning property because of their race or skin color. So you can’t state, for example, that an apartment is located in a “predominantly African-American neighborhood,” but you can use words like “master bedroom,” “desirable neighborhood,” and “exceptional find” to attract tenants. 
• National origin: A person’s nation of origin cannot be a factor when determining eligibility for renting or owning property. This means you can’t use language that excludes or deters someone from another country from renting your property.
• Religion: Landlords can’t base tenant approval decisions on the religious beliefs or practices of prospective renters. In other words, you might not want to say the property is close to a Catholic church, but instead be more general, saying it’s near local religious organizations.
• Sex: While sexual discrimination was added to the FHA later, a tenant’s sex, gender identity, and sexual orientation are all protected under the law. You can’t say you prefer women to men in your advertisement or that you’ll only rent to those with alternate lifestyles.
• Familial status: A landlord cannot discriminate against a person because of their marital status or number of dependents. Married or unmarried, kids or no kids, a landlord can’t restrict their property based on these factors, according to the FHA.
• Disability: Under the FHA, landlords must not discriminate against people with mental or physical impairments or hinder their ability to find housing. Avoid using any words in your marketing that might alienate people with disabilities, and try to make accommodations for them when reasonably possible.

Additional protected classes under state and local laws

The classes protected under the FHA apply in every state and local community in the nation. However, your state may have additional housing laws and regulations that protect other classes or groups. There may also be differences in fair housing laws at the state and local levels that can affect you as a landlord. Check with your local housing authority and consult your legal team to ensure you’re following the law in your state.

Fair Housing Compliance Tips for Landlords

Use these tips to ensure you comply with fair housing laws in your area.

Take care when asking tenants questions

The Fair Housing Act doesn’t just apply to your marketing efforts—it matters when you meet with prospective renters, too. Avoid certain types of questions or statements that may be taken as derogatory in nature, and keep in mind that wording and tone are important as well. Don’t ask questions such as, “Just how many children do you have?” or “Where do you worship?”

Also avoid comments about a person’s age, gender identity, or sexual orientation, or you may unintentionally be using discriminatory practices. Maintain professionalism during tenant interviews and showings because a simple misinterpretation could be viewed as discriminatory and may provide the foundation for a potential complaint. 

Consider making a template before you meet with potential tenants. This will provide more structure for your conversation so you avoid potential FHA problems or violations.

Treat all rental applicants equally and consistently

Stay on the legal side of the Fair Housing Act by being a good person. Treat everyone equally, and be consistent. Know what questions to ask—and what responses you want—and determine qualification standards ahead of time.

When filling a vacancy, have a predetermined set of qualifications that you require of all applicants. Your qualification standards should be based on valid business reasons. For example, you can set a minimum income requirement. Just make sure you never set different requirements for different people.

Once your tenant has moved in, stick to the lease. Have a written policy for how to respond to all situations—and don’t deviate from it. Deviating from your lease or policy indicates inconsistency, which may lead to an accusation of partiality.

For example, if your lease states that a late fee will be charged for rent not paid by the fifth day of the month, you must always enforce the policy equally for all your tenants. Regardless of your reasoning—say one tenant was nice and the other a jerk—enforcing it unfairly could quickly get out of hand. Practice consistency and stick to your written policies, and you should come out ahead.

Ditch the assumptions

When filling a vacancy, don’t assume you know your potential tenant or what they want. Don’t make assumptions about the type of dwelling or neighborhood prospective tenants might prefer. Pointing persons toward specific units or neighborhoods is discriminatory and could get you into trouble, even if you think you’re being nice or trying to help.

Tell prospective tenants about all your available properties. Let them decide which ones they would like to see and which ones they want to avoid. 

Consider pulling together a predetermined list of questions for every potential tenant. Include questions about their price range, type of housing they prefer, and the size and location they’re looking for. This way, you can quickly and legally point them toward any available rentals you have that meet those requirements. Let them pick the place that suits them best.

Keep thorough records

Keeping records of current and former tenants and all prospective tenants is extremely important for a landlord. Not only will detailed records protect you in the event of a discrimination charge, but it’s also good business practice. 

When renting out your unit, keep notes of each tenant contact, including the date and time and whether you meet in person or speak on the phone. Also, keep records of your tenant screening results. If you deny a tenant, send them an adverse action notice, and keep all the information you collected.

The same goes for current and past tenants. Each tenant should have their own file where you store all their information. Keep records of phone calls, emails, letters, texts, complaints, notices, maintenance requests, and repairs. 

After the tenant leaves, don’t toss their file—keep it in case you ever need it. Not only could it protect you, but accurate, detailed records also make your job much easier.

When keeping records, try to think of it this way: You’re telling a story from beginning to end. If someone other than you were to read it, would the story be absolutely clear? This should be your goal when making notes and keeping records.

Consequences of Fair Housing Act Violations

Violating the FHA comes with consequences. If you’re found guilty of committing an FHA violation, you could be fined up to $21,663 for the first violation. Landlords who commit a violation within the previous five years can be liable for a fine of up to $54,157. For two or more violations within the previous seven years, you can be slapped with a $108,315 fine. 

On top of your fine, you’ll also have to pay all your legal and court fees, as well as any restitution a judge determines you owe to tenants harmed from your discrimination. Not only can you end up paying a lot of money for an FHA violation, but it could also hurt your reputation. You want to attract more tenants to your rental properties, not less.

As you can see, it’s best to ensure your property is open and available to anyone who wants to rent it. By having tenant criteria dialed in before you ever rent your property and knowing the laws in your area regarding housing opportunities, you can avoid legal issues with your tenants.

Fair Housing Act FAQ

Final Thoughts

Knowing about the real estate industry and the laws and regulations surrounding it can empower you to grow your real estate business. Following the guidelines set forth by the Fair Housing Act will help you avoid any legal issues when renting your property. 

The FHA is there to create equal opportunities for everyone to live comfortably. Doing your part to ensure housing is fair in your community can make it a better place to live. Familiarize yourself with the FHA before you market your property, and try to use inclusive language that makes your property appealing to everyone.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.