Fair Housing: What Every Landlord Should Know

As a property owner, it’s your responsibility to understand and comply with the U.S. Department of Housing and Urban Development’s Fair Housing Act. The Fair Housing Act (FHA) was established in 1968 with the main objective of prohibiting discrimination in housing rentals and sales for protected classes of prospective tenants. You also need to abide by local and state fair housing laws when securing tenants for your rental property.

What Type of Rental Properties are Covered by the Fair Housing Act?

Most property rental and housing situations are covered by the Fair Housing Act, but there are some exceptions:

• Owner-Occupied Dwellings – if your property consists of no more than four units and you occupy one of those units.
• Single-Family Homes rented without a broker – only if the owner does not own three or more properties.
• Religious Organization – providing those apartment dwellings are not for commercial benefit. Under these circumstances, the Fair Housing Act states you may limit occupancy or show preferential treatment to those within your organization’s religion. However, you are still prohibited from discriminating based on race, color, or national origin.
• Private Clubs – are allowed to lease apartments solely to club members so long as the rentals are residential dwellings and not for commercial use.
• Senior Housing – Properties that qualify as senior housing communities. This includes age “55 and older” or “62 and older” senior residential communities. It also includes properties participating in a federal or state retirement housing or low-income senior housing program.

Which Classes have Fair Housing Protection?

Per the terms of the Fair Housing Act, a landlord, real estate company, municipality, bank, or lending institution cannot legally discriminate against any applicant that falls within seven protected classes.

• Race– Race is often identified as the physical traits a person inherits. Examples include discrimination against Native Americans, Asians, African Americans, etc.
• Color– “Color” as specified in the Fair Housing Act represents the variations in skin tone that exist in human beings. As such, you cannot legally deny housing to an applicant based solely on their skin tone.
• Sex– You cannot legally favor the application of a man over that of a woman or vice-versa (all other things being equal). This protection also extends to prohibiting acts of sexual harassment.
• Religion– You cannot deny housing or refuse an application based on the religious beliefs or practices of the prospective tenant. Further, you cannot discriminate based on clothing that defines or is part of their religious culture.
• National Origin– Non-discrimination based on National Origin means you cannot discriminate against anyone who is not native born. This FHA protection includes discrimination due to someone’s ethnicity, language, or culture. 
• Familial Status– The Fair Housing Act prohibits discrimination for anyone based on their marital status, and for families with children under the age of 18. The FHA also mandates you cannot deny a qualified applicant housing solely because of their age.
• Disability– You cannot deny housing to an applicant with a disability even if the disability requires reasonable modifications to the rental property. Further, the FHA classification for the term “disability” has been defined precisely to include not only physical impairments but also mental impairments, and even some chronic addictions. The FHA mandates certain accommodations for the disabled – including the ability to keep a guide dog or service animal.

Fair Housing by State

Several states have fair housing agencies and housing discrimination laws extending anti-discrimination protections beyond the protected classes of the FHA. As an example, the state of California has 18 protected classes, including:

• Veteran or military status 
• Gender identity and gender expression
• Those with certain medical conditions

You should familiarize yourself with all state and local laws that govern fair housing where your rental property is located. More information regarding state-specific housing laws can be found here.

Fair Housing and your Rental Listing

Whenever you have a vacancy, you’ll need to abide by the rules of the Fair Housing Act when creating your property listing. When writing your listing, you are not allowed to include language that might be construed as discriminatory or preferential. 

As an example, you cannot advertise that your rental is “Adults Only” or use wording such as “No Kids Allowed”, as that would be discriminatory toward families. Be sure to avoid specifying a desired tenant’s gender in your listing, such as “Single Females Preferred”. 

Keep in mind that it’s best to stick with language that highlights the features of your property. This includes terms such as “Studio”, “Master Bedroom” and even “Jack and Jill” for a shared bathroom. If the dwelling is already equipped with an entrance ramp or a step-in shower, it’s good to share those amenities as well.

As a side note (and oddly) per the FHA rules, it’s acceptable to describe rental units as either a “Mother-in-law” or “bachelor apartment” so long as those aren’t the only tenants you would consider for either rental.

Fair Housing Violations

So, what actions could potentially get you into hot water as a fair housing violation? The following are some examples:

• If your rental is a one-bedroom apartment, you may not deny housing to a highly qualified couple with an infant. 
• You clearly cannot deny housing to a woman who is pregnant.
• You can’t legally request a larger deposit from a prospective tenant because they are foreign born and in the country on a work visa.
• You cannot harass a tenant or create an unsafe housing environment by making unwelcome lewd comments (including texts) or making unwelcome physical contact.
• You cannot refuse to make reasonable modifications to accommodate someone who is disabled.
• You are not allowed to engage in cultural harassment or intimidation by telling a tenant that they are not allowed to hang decorations in celebration of their religious holidays.
• You can’t designate certain recreational areas of an apartment building as “Kid-free zones”.
• You can’t legally add non-standard or excessive rental or security fees to prospective tenants within a protected class if they are not consistent with the fees other tenants are paying.

Penalties for Fair Housing Violations

The U.S. Department of Housing and Urban Development (HUD) has an online complaint form for tenants and applicants who have experienced housing discrimination. Renters may also file a complaint with a state fair housing agency or even contact a private lawyer if they feel that they have a case. 

Complaints of housing discrimination can also come from Fair Housing Watchdog groups, or from the findings of HUD employees that pose as prospective tenants if they suspect a landlord has engaged in discriminatory behavior. 

If someone files a complaint against you and you are found guilty of discriminatory behavior, the penalties could be as simple as a monetary fine or they could be catastrophic to your rental business. 

Fair Housing fines and penalties vary depending on whether the charges are filed with HUD or state housing agencies. Here are some examples of fines and penalties:

• $16,000 in fines for the first single violation but, if you have two or more violations in the past seven years, then the fine could be as high as $65,000. 
• If your case involves the Department of Justice, civil penalties can go as high as $100,000.
• You may end up responsible for the renter’s compensatory damages, which could include rent fees and out-of-pocket expenses for alternative housing, and also their legal fees.
• You could be charged a monetary penalty for damages associated with mental anguish and humiliation related to the trauma that the plaintiff incurred because of your actions. 
• Federal district courts may also award punitive damages if there is strong evidence that a defendant’s actions were willfully intended to cause harm or were an act of malice. 
• A court can issue an injunction to stop a defendant from continuing his or her allegedly harmful actions and behavior.

The Takeaway

To manage a successful rental business, you need to treat every prospective renter and every tenant respectfully and equitably. It’s crucial to understand and comply with all Fair Housing laws affecting you and your rental property. Whenever you have a vacancy, be mindful of the language in your rental listing and in reviewing the merits of all qualified applicants. 

There are some occasions where discriminatory behavior is unintentional. If you find yourself on the receiving end of a housing discrimination lawsuit, contact a lawyer with experience in Fair Housing law immediately.