Tenant screening is important, but landlords also need to know what fair housing laws say about how they can and cannot evaluate a potential renter.
Fair housing laws stem from the Fair Housing Act, a portion of the Civil Rights Act of 1968 which aims to prevent discriminatory practices in the housing industry. Virtually anyone who deals in housing arrangements has to abide by these laws, including those who operate housing assistance programs, mortgage banks and lenders, real estate agents, and, you got it, landlords.
Sadly, landlords and rental property managers are among the least compliant with fair housing laws. According to the National Fair Housing Alliance, a whopping 83% of all fair housing complaints filed last year related to rental properties -- amounting to more than 26,000 complaints nationwide.
Want to make sure you don't further the problem? This guide can help.
Fair housing law basics
Under fair housing laws, you can't use things like a tenant's race, color, or religion to refuse them housing, set pricing or rent terms, delay maintenance or repairs, or evict them. You also can't use different qualification criteria based on these items.
All in all, if the activity involves the consideration of any of the following protected classes, then it's a violation of the Fair Housing Act:
- National origin
- Disability status
- Familial status (this includes children and pregnancy, although there are exemptions for senior housing)
State and local laws also include protected classes like age, military status, sexual orientation, language preference, citizenship status, source of income, criminal history, and more. Study up on your local housing laws to make sure your screening process is in line.
Reasons you can't deny a tenant
Basically, if it's a tenant's place in one of the above classes that led to the denial (even indirectly), you can't do it.
For example, if you see an applicant's previous address was in a poorer, largely Hispanic part of town and you fear they might not fit into the neighborhood, that's not a legal reason for denying them. It's a violation of fair housing laws.
Here are a few other reasons you can't deny a tenant:
- They have limited English proficiency.
- They work in a certain industry or field.
- They're too old, too young (except in senior housing), etc.
- They have a medical condition or disability.
- They have a mental illness or addiction (to legal substances).
- They committed a nonviolent, non-property-related crime.
You also can't do what's called "steering" -- or trying to push certain renters toward certain properties because of their class. An example of this would be encouraging a family to consider a larger, more expensive unit due to their size or directing a family of a certain race to a community primarily of that same race. Pointing a disabled tenant to a bottom-floor unit can also be considered steering.
Finally, a quick note: It's not just wrongly denying a tenant that's a violation of fair housing laws. Saying a unit is unavailable when it isn't is also illegal when it's due to an applicant's inclusion in a protected class.
Reasons you can deny a tenant
Now, the above doesn't mean you have to open your doors to anyone and everyone. You still have the right to set stringent qualifying standards for your tenants, and you can still deny applicants who don't fit the bill.
Here are just a few of the many reasons you can legally deny a tenant:
- They don't have the proven income to make rent.
- They have bad credit, overdue accounts, or a bankruptcy on their record.
- They smoke cigarettes or marijuana.
- They have a pet (that's not a service animal).
- You can't verify their income.
- They have a history of not paying rent, getting evicted, or damaging their rental properties.
- They provided false information on their application.
- They don't agree to a background or credit check, or they don't fill out the application fully.
- They have bad references.
- Their employment history is spotty.
- They committed a violent crime or one that was drug- or property-related.
Be upfront about your requirements, and make sure you hold every applicant to the same standards. If you do deny a tenant, you should give them a reason. This can stave off any ideas of a fair housing lawsuit.
Fair housing laws apply to marketing your property, too
Fair housing laws actually come into play long before you begin evaluating and choosing tenants. They also need to be considered when you're initially marketing and promoting your property.
Under the Fair Housing Act, those engaged in housing-related activities have to avoid discrimination and steering in advertising and marketing practices, too. That means you can't create a Facebook ad and choose an audience of only college-educated, high-income earners to promote it to. You also can't claim your property is "perfect for students" or "great for couples."
Anything at all that would indicate you have a preference for who you'll rent to is a violation of fair housing laws and could get you in serious trouble. Here are some other marketing tactics that could be a violation:
- Showing a tenant only the units you think will fit their income/needs/background. Let them choose the properties they'd like to see for themselves.
- Using only people of one race in a promotional photo for your property. Try to keep marketing initiatives diverse and all-inclusive.
- Including discriminatory words in your listings or ads. Things like "exclusive," "limited," or anything suggesting that only certain people live in a community could get you in trouble.
- Using certain "No" phrases. "No kids," "no students," "no families," etc. These are all violations (no smoking and no pets are okay, though).
- Posting your flyers, ads, etc., in only certain areas of town or where only specific classes live or congregate. Your ads should be accessible to all prospective tenants, regardless of their demographic or class.
Keep in mind: Under the Fair Housing Act, there's a lot that can be considered advertising or marketing, including online ads, brochures, flyers, websites, newspaper classifieds, billboards, and listing sites. Your own words over the phone or in an email could even be considered marketing if you're trying to pitch your property.
If you're ever found in violation of the Fair Housing Act, you could be required to pay hefty penalties. The best way to fully protect yourself from fair housing violations is to sit down with an attorney when creating your marketing collateral, application forms, and even your entire application process. They can ensure you're abiding by the law and that no discriminatory processes are at work.
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