If you are a landlord selecting tenants, it's extremely important that you and your staff know the basics of federal fair housing laws as well as state anti-discrimination statutes. Since fair housing lawsuits can be costly, you should always check your local laws or consider consulting with a lawyer. Below are some basic best practices to follow to help avoid being sued for fair housing law violations.
The Federal Fair Housing Laws
Landlords often only know about the Federal Fair Housing Act, but in fact, there are a host of federal laws that can apply to discrimination in housing. Here are some of the most common federal fair housing laws that landlords have to be especially aware of:
While the Federal Fair Housing Act applies to you regardless, some of the other laws apply to you largely depending on whether you receive any federal funding or assistance. Even if you do not receive any federal funding or assistance, keep in mind that many state have enacted similar fair housing laws and legislation.
State Fair Housing Laws
In addition to the Federal Fair Housing Act, almost every other state has its own Fair Housing law. These laws typically mirror the protections found in the Federal Fair Housing Act, but often add additional protections, such as protections based on sexual orientation, personal appearance, or political affiliation.
Credit Reports and References
Always get a credit report before renting to a prospective tenant. Credit reports provide you with a business-based reason to select or reject an applicant, but make sure you are consistent on the criteria you use to screen applications (see below).
Selecting a Tenant is a Business Decision
Its important that you be able to justify your decision to reject an applicant on sound business grounds. While its perfectly legal to reject an applicant because of his or her credit history, it is not legal to reject the same applicant because of his or her ethnicity. Why you rejected a tenant matters, and you need to have a legitimate business rationale for doing it.
Make Consistent Decisions
Being consistent in your decision-making is extremely important if you want to avoid liability. If you only ask people of a specific ethnicity for credit checks, but dont require credit checks for people of another ethnicity, that inconsistent behavior will undo any claim to making a legitimate business decision. The same goes with accepting late rent, charging security deposits, etc. Charging one group a higher security deposit is just as discriminatory as refusing to rent to the same group and can expose you to a fair housing lawsuit.
Train Staff on Fair Housing Laws
Even if you as a landlord know all of these issues, it wont help you if the people you hire don't know. The landlord is ultimately responsible for the conduct of his or her employees, so it pays to be careful when hiring and training any employees. Make sure that employees are aware of fair housing laws that apply to you.
Get a Free Legal Evaluation of Your Fair Housing Lawsuit
Even if you have the best intentions of providing housing in the most fair way possible, problems can arise from honest mistakes. For instance, your property manager may not fully understand their obligations under state and federal fair housing laws, thus exposing you to liability. Make sure you understand your legal obligations with a free legal evaluation by an experienced real estate attorney.