As a property owner, aside from being familiar with the Landlord-Tenant Laws, it's also imperative that you learn about the Fair Housing Act. This will protect you against lawsuits that can negatively affect your finances and your reputation.
The Fair Housing Act protects a set of classes and gives them a fair chance at buying, selling, lending or renting a property. This act is put in place to discourage discrimination when it comes to housing. It recognizes the right of everyone to own, rent or mortgage a property free from any prejudice.
Classes Protected under the Fair Housing Act
These are the classes safeguarded by this law:
- National Origin
- People with Disability
- People of Color
- Familial Status (ex. having children under 18, pregnant women)
As a Landlord, you are Encouraged to…
1. Be careful when marketing your property and screening the applicants.
Your ads should not contain any preferences for a certain religion, sex, race, etc. In addition, you shouldn't reject housing rental applications purely based on their religion, race, etc. This is a highly discriminatory practice and considered a violation to the Fair Housing Act.
2. Exercise fairness and tolerance.
When assessing tenant applications, the reason for denying a prospective renter must not stem from being part of the protected classes. It must be logical and reasonable, such as not being able to meet the required financial income bracket, previous bankruptcy or eviction records.
This helps perpetuate impartiality and fairness no matter what race, sex or religion the applicant currently belongs to.
3. Check the Fair Housing Act stipulation where your rental properties are located.
Although there are 7 basic safeguarded classes commonly prescribed under the Fair Housing Act, some states have expanded their list of protected classes. If you have plenty of rental properties, you must review all the stipulations per state so you don't violate the Fair Housing Act unknowingly. This will help prevent any unnecessary and time-consuming lawsuits and hefty penalties.
The Fair Housing Act Objective
The sole objective of the Fair Housing Act is to safeguard the rights of the protected classes by discouraging any housing discrimination. This is applicable whether they desire to buy, sell or rent a property.
Thus, here is a helpful guide for you to follow:
- Accept anyone's rental application so long as they're qualified upon assessment of their income, records and submitted documents.
- Make all the amenities in your rental property available to all tenants and offer the same kind of accommodations no matter the race, religion, sex, etc.
- Be transparent when your rental property is available to the applicant.
- Keep your advertisement free from any mention of the protected classes' categories.
- Have one set of requirements for all rental applicants.
The Fair Housing Act Implementation
If a rejected applicant feels as though he experienced unfair treatment by you, he will file a complaint to the Department of Housing and Urban Development (HUD). They will then assess the complaint meet with you promptly.
To avoid this scenario, be mindful of your actions and practice fair treatment for each applicant.
If you're found guilty of violating the Fair Housing Act, a case will be filed against you. You'll also be subjected to heavy fines.
Avoiding Penalties for Discrimination
When you adhere to the Fair Housing Act, you'll steer clear from any conflict. Do keep in mind that the HUD is always checking so practice having a neutral and fair assessment for all rental applications.
However, this doesn't mean that you have no right to reject applicants.
As long as it's reasonable, you are permitted to do so. Here are reasons you may reject an applicant:
- The applicant's income is insufficient. Since rent collection is vital in keeping the business operating, it's logical that you may dismiss a renter who barely makes twice the rental amount. If there are any financial emergencies, the applicant may find it hard to deposit his rental payment. Hence, you can be justified when rejecting an applicant based on the income factor.
- The applicant's credit score is below the standards. When an applicant displays a poor score, it can indicate a poor financial responsibility. It's reasonable that you will protect yourself against an applicant that has an unsatisfactory credit score record.
- The applicant used misinformation in his application form. As a landlord, you want a potential tenant to be honest when submitting documents and figures. You don't want to be stuck with an applicant who has fabricated data! Therefore, this is a good ground to reject a rental application.
The Fair Housing Act aims to promote equality and fairness to tenants, buyers and sellers by protecting the 7 aforementioned classes.
Therefore, it's your job to ensure that you properly follow the guidelines. Doing so will generate less conflict and more peace!
For more information, contact InterWest Properties.