As a landlord, you want to avoid bad tenants at all costs. Bad tenants cost you time and money, increase tenant turnover, and can lead to evictions. For these reasons, it’s crucial to conduct thorough tenant screeningLinks to an external site., which allows you to weed out bad tenants and find great ones.
With that said, it’s important to understand that tenants have a way to protect themselves from being denied housing unjustly: the Fair Housing Act. Even if you’re not intentionally discriminating against a tenant when you deny them, a complete understanding of fair housing laws will ensure you don’t wind up with a discrimination lawsuit on your hands.
To avoid getting into legal trouble as a landlord, here’s everything you need to know about the fair housing act.
What is the Fair Housing Act?
The Fair Housing Act was passed in 1968 as part of the Civil Rights Movement. Enforced by the US Department of Housing and Urban Development, the Fair Housing ActLinks to an external site. was created with the belief that anyone should have the right to housing without facing discrimination due to belonging to a certain class.
The seven classes protected under the Fair Housing Act are as follows:
- Race: People can’t receive unfavorable treatment due to personal characteristics like skin/color complexion, hair texture, or facial features.
- Color: While this may overlap with race, they aren’t always synonymous. Color discrimination may occur within various races or ethnicities. This can include pigmentation, skin shade, tone, color characteristic, etc.
- Religion: This is not just limited to people belonging to traditional and organized religions like Christianity and Islam; it also protects those who have moral or ethical beliefs that may not be “justified” by a particular religion.
- National Origin: People from other countries, other parts of the world, or who have certain ethnic backgrounds or accents are protected.
- Sex: Sex and gender are protected, regardless of sexual orientation, transgender status, and other gender roles and identities.
- Disability: Landlords are prohibited from asking someone if they have a physical or mental disability or illness. Landlords are also prohibited from asking to see someone’s medical records. As a landlord, it’s your responsibility to provide a tenant with reasonable accommodations.
- Familial Status: This refers to the presence of at least one child under the age of 18. Also protected are tenants who are pregnant or are in the process of adopting a child.
It’s important to note that these are the classes protected by the Fair Housing Act on the federal level. State and local housing laws can extend protection to additional categories such as age, citizenship, sexual orientation, marital status, veteran status, source of income, etc. It’s recommended that you contact a local legal professional to understand how local and state discrimination laws can impact your business.
How do you avoid discrimination in tenant screening?
The penalties of fair housing discrimination are severe. Even for a first violation, you can find yourself facing fines and attorney fees in the tens of thousands of dollars. Furthermore, you want to make sure you don’t run the risk of doing something that could even be misinterpreted as discrimination because no one wants to lose money.
One of the first ways to ensure that you’re not violating fair housing laws is by treating everyone who shows interest in your units in the same manner. You should establish a consistent procedure in your application process that you adhere to every time. Make sure your questions are never related to anything protected by fair housing laws.
Next, you want to create a tenant scoring system based on your own set of criteria. When screening tenantsLinks to an external site., you can ask them for proof of income, employment history, and residence history, and you can also run credit reports and background checks. By applying a standardized scoring system based on this information, you can make sure you’re objectively choosing a tenant who meets your standards. Again, don’t ask anything that pertains to the classes protected by the Fair Housing Act. Make sure you document the tenant scoring system you fill out for every applicant.
Lastly, you must inform every applicant about all the vacant units you have available. It’s a violation to steer an applicant into certain properties. Don’t assume that a unit may be out of a tenant’s financial reach because this can be construed as discrimination.
Conclusion
Even if you don’t think you’re being discriminatory, it’s important to understand the Fair Housing Act and ensure that you aren’t violating any aspect of it. The best way to make sure of this is by being consistent in the way you treat every applicant. Not only will you protect yourself against fair housing lawsuits, but it’ll facilitate the process of picking qualified tenants.
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