As with many things in our country, this has become a topic that encompasses a very large body of law. My goal in this article is to give you a base understanding of the laws and what to watch out for. As with so many of these issues it is very important that you seek legal advice when necessary. I belong to a landlord association in California where as part of my membership I receive a designated amount of free legal advice per year. I have found this alone to be worth the cost of membership, it saves me from having an attorney on retainer.
What laws govern Fair Housing? There are three primary federal sources (your individual state will most likely also have laws):
1) The Civil Rights Act of 1968
2) Fair Housing Amendments Act of 1988
3) Americans with Disabilities Act of 1990
These laws combined make it illegal for landlords, management company’s and agents to “discriminate” against any person in connection with housing based on the following: an individual’s race, color, religion, gender, national origin, familial status, marital status, sexual orientation, age, ancestry, source of income, medical condition, disability, and even genetic information (this area might expand as science continues to progress). Simple right – not so fast.
These are the activities considered illegal under the above criteria:
1) Denying rent or selling housing based on the status of an individual as a member of one of the above protected groups.
2) Treating applicants for housing differently based on the above protected group.
3) Advertising a discriminatory preference of limitation.
4) “Blockbusting” – The practice of persuading owners to sell property cheaply because of the fear of people of another race or class moving into the neighborhood and thus profiting by reselling at a higher price – (Google)
5) “Steering” – The practice of a landlord or other housing professional limiting choices by guiding or encouraging prospects toward or away from certain options based on the above protected group.
A violation of these acts and/or laws can bring lawsuits and fines against the property owner and management. An owner should be acutely aware that this includes resident managers, on-site employees and even maintenance staff. If there are discriminatory words or behaviors by staff the responsibility will fall on the owner.
These laws and acts are enforced by various governmental agencies and private attorneys. At the governmental level they are enforced primarily by HUD and the FHEO (Fair Housing and Equal Opportunity). The DOJ (Department of Justice) also has a hand in enforcement. When you get to the state and municipality (county and city) level there are many organizations that can take allegations of discrimination.
HUD can award civil penalties of around $16,000 per occurrence for the first offense, $37,500 for the second and $65,000 for each additional violation. The DOJ has the ability to assess fines as well as punitive damages and monetary awards.
Almost all residential housing is covered under the Fair Housing Act, this would include but not be limited to apartments, SFR (single family residences), time-shares, mobile home parks you get the idea. There are a few exceptions such as a “lodger” or even a “boarder” in a home. Also not covered (which I find odd) is senior housing facilities which require residents to be 55 years of age or older.
Most typical landlord insurance does not cover allegations of Fair Housing Violations. There is insurance that will cover what employees do on your behalf but it is costly and considered “employment practices liability” insurance.
The best thing one can do as a landlord is to have clear policies and make sure all agents (or employees) are trained so that you can document compliance.
This is a complicated area; I hope this article has made it a little clearer. OTA Real Estate courses can teach you the ins and outs of the real estate market.
Diana D. Hill – email@example.com