In a previous blog, 3 Tips For Successful Residential Property Management, I briefly touched on the Fair Housing Act and some possible consequences to getting sideways with Uncle Sam. In this blog I would like to go over the act in a little better detail as I feel this is something that many people have heard of but know little about. In particular how this act relates to rental property management is something every landlord should be aware of.
The Fair Housing Act
Passed in 1968 the act prohibits discrimination in the sale, rental, and financing of property to any individual based on race, religion and national origin. An update to the law in 1974 included gender to this list. Most people would view the discrimination against these four classes as an obvious no-no but an update to the law in 1988 created two new classes you might not know about.
Handicap
We are all familiar with the ubiquitous handicap parking signs but handicap or disability is also a protected class when it comes to rental properties. For example if you set a no pets policy at your rental property, or if your property is part of a condominium association that does not allow pets, you cannot refuse to rent to a blind person who uses a Seeing Eye dog. Also a landlord cannot prohibit a disabled tenant from making, at their own expense, reasonable modifications to the property that will allow them to use it. However if a modification is made the disabled tenant is obligated to restore the property to original condition upon their moving. And finally if there are any rules or policies that inhibit a disabled person from using the housing then reasonable accommodations must be made for the tenant.
Familial Status
Familial status, a somewhat confusing term, can easily be understood as having kids. Discrimination against this type of protected class can be somewhat difficult to understand but I have found a simple way to determine if a rule or policy is discriminatory. A posted rule stating "No kids in the pool from 10-2" may see innocuous enough but if "kids" were to be replaced with "Asians" or "Catholics" then it becomes clear that the rule is discriminatory. I recently had a resident stop by my office concerned about the prospect of having a new neighbor move in above them. They were concerned about the noise and asked that I would only rent to a single person, preferably a woman with no kids who worked as a flight attendant! Not only was the request a little extreme but it would also be a discriminatory practice. As a professional property manager I cannot even engage in what is called "steering", the act of suggesting only certain properties to a family or other protected class.
What Does This Mean For Me?
Great question, glad you asked! There are rules regarding what housing is covered by the Act and what is not. Generally most housing is covered but under certain circumstances a single-family home rented without the use of a broker is not covered, as long as the owner of the property does not also own more than four rental properties at a time. For reference you can take a look at an overview of the Fair Housing Act or, if you are really suffering from insomnia, you can take a look at the entire text of the Act here. Now if I could make a recommendation to anyone it would be to follow the requirements of the Act whether you think you should or not. While it is always best to error on the side of caution you can be certain that your actions in managing a rental property are ethical and honest.