The Fair Housing Act is a law that aims to give a fair and equitable chance for everybody, whether one is a buyer, seller, lender or renter. Learning about the Fair Housing Act protects a landlord from being penalized if he commits any act of discrimination. This is especially important to know if you are just starting out as a landlord and you can click here for more tips that can help you.
The Fair Housing Act safeguards a set of classes from being subjected to housing discrimination. It highlights everyone’s right to own, rent or mortgage a property without any prejudice.
Protection under the Fair Housing Act
These classes are categorized as under protection:
- People with Disability
- People of Color
- National Origin
- Religion
- Sex
- Race
- Familial Status (ex. having children under 18, pregnant women)
As a landlord, you must exercise caution and refrain from rejecting applications belonging to the aforementioned classes. You can’t simply cancel their rental applications based on the race they belong to.
You can’t exercise your prejudices and accept tenants based on your own specific and discriminatory standards. If you do so, you’ll be acting in violation of the Fair Housing Act.
You must practice fairness and welcome all applicants. Your reasons in rejecting a tenant must be valid, such as if they’re not able to meet the financial requirements.
Some of these reasons may be that they have an unsatisfying credit report or an eviction case. A clear and consistent approach when screening your tenants will protect you from the penalties of not following the Fair Housing Act.
Different states have their own versions of the Fair Housing Act. Some have added more protected classes apart from the basic seven.
As a landlord, it pays to be cognizant of these laws in the state where your rental property is located. This form of discrimination against tenants is not tolerated and perpetuating this kind of action will only lead to a form of disrespect for minority classes and ethnic groups.
Purpose of the Fair Housing Act
The primary aim of the Fair Housing Act is to prevent discrimination of the protected classes when they’re buying or applying for a rental property. In this case, landlords are mandated to observe the following guidelines:
- No refusal of rental application to a qualified applicant.
- Lying on the availability of your rental property is not permitted.
- Requirements for rental application must be fair and the same for everyone.
- All tenants can use all the amenities and apply for the same accommodations available.
- Advertising your preferred kind of renter or background is discouraged.
Enforcing the Fair Housing Act
The authority tasked to oversee that the policies outlined in the Fair Housing Act are respected is the Department of Housing and Urban Development (HUD). They are known to conduct investigations undercover and schedule to call or meet up with the property owner as prospective tenants. It’s therefore good practice to stay away from any discriminatory behavior.
When discriminated applicants submit complaints, the HUD responds promptly and proceeds to investigate the claims. Upon finding evidence that the allegation is true, the landlord will be subjected to legal actions and hefty penalties will be collected.
Ways to Avoid Being Penalized for Discrimination
A landlord must be personally accountable and learn to abide by the Fair Housing Act. Not only will you save money from paying heavy fines, but you’ll also leave your reputation untarnished by a lawsuit record.
In the rental business industry, a good name is priceless. Information can quickly spread and in a competitive business, you want to avoid losing tenants or discouraging prospects.
Here are some practical ways to avoid complaints
Be cautious of your marketing advertisements.
Pay attention to the words you use and have your marketing copy reviewed by a professional. Make sure discrimination is avoided by not singling a particular group as your preferred renters. Be more knowledgeable of the protected classes under the Fair Housing Act to avoid committing mistakes.
Practice consistency when implementing your tenant screening process.
Once you’ve outlined your tenant criteria, make sure every renter is subjected to this screening regardless of his religion, race, sex, etc. The Fair Housing Act promotes equitable access to everyone when it comes to buying or renting a property.
This means everyone has the right to be given a fair chance as an applicant. All the prospective renters must undergo the same assessment, such as credit checks, credit history reviews and financial background inspections.
The same required documents must be asked from each applicant and there shall be no additional requirement for a different group of tenants than the others. Making it tougher for an applicant to pass the assessment is tantamount to discrimination. All fees should be the same for every applicant in your rental unit.
Be mindful that the HUD is always conducting regular inspections.
To make it easier for you and less stressful, it’s important to treat every applicant the same. Each must be respected regardless of his background attributes. If you apply a fair treatment to everyone then you’ll avoid any claims of violations to the Fair Housing Act.
Valid Reasons a Tenant can be Refused a Rental
Unsatisfactory credit score
When a prospective tenant’s credit score fails to meet the standards, denial of his application is allowed. A poor credit shows a tenant’s undesirable financial standing.
Unable to meet financial income requirement
When a potential tenant has a lower income than the requisite amount, it’s valid to reject his application. A tenant must prove he’s financially capable to meet the monthly rental obligations.
Submitting false information
When a landlord finds misinformation upon review of an applicant’s documentation, he can deny the application immediately. Falsifying information and declaring fraudulent data is a legitimate reason for rejecting a potential renter.
To sum it up, a landlord must help promote the Fair Housing Act by implementing tenant screening protocols that will eliminate discrimination based on skin color, disability, familial status, national origin, race, sex and religion.