One of the areas that can be dangerous for self-managing landlords is fair housing. Most people do not intentionally want to discriminate against others, but the way you market your property, screen your tenants, and process applications can be considered a violation of fair housing laws if you’re not careful.
It’s important that you’re consistent, that you have documented procedures that will stand up in court, and that you understand the law and how it affects your rental property.
Fair Housing Protected Classes
The federal Fair Housing Act prohibits discrimination in housing against seven protected classes. These are race, religion, color, national origin, sex, familial status, and disability. Each state and city have ordinances that might include additional protected groups, so make sure you know your state and local laws as well. You cannot accept or deny tenants based on these things, and you also cannot advertise for specific tenants outside of these protected classes. For example, an ad for your studio loft that reads “Great for single professional” can be seen as discriminating against people with children. Be careful with occupancy limits as well, because large families can see that as a violation of their rights and you can get into trouble.
Understanding Disparate Impact
There has been a lot of talk about disparate impact lately, and for landlords and property managers, it can be a challenge. This innocent phrase can lead to a lawsuit quickly. It protects people who are disparately harmed by certain requirements or restrictions. For example, in your leasing standards you might say that you won’t rent to anyone with a felony conviction. While convicted felons are not a protected class, race is. And all statistics show that non-whites are convicted in higher numbers than whites. Therefore, your requirement that an applicant not have any felony convictions can lead to disparate impact and racial discrimination.
These rulings are challenging, and they are always changing. We strongly recommend that you talk to a professional property manager so you can remain in compliance at all times. If you have any questions or need any help, please contact us at 3G Properties Group.
