Fair Housing laws are right up there with property taxes and insurance when it comes to level of excitement for Landlords.
You may feel the Fair Housing Act is fairly straightforward and common sense, and you would never knowingly discriminate anyone from renting your property.
So, why is it such a big deal? Why even spend the time reading a blog about it?
We’ll tell you why.
Lawsuits, lawsuits and more lawsuits.
You would probably be shocked to know how many Landlords and Property Managers have been sued over housing discrimination issues due to ignorance of the law and what all it entails.
Violating Fair Housing guidelines isn’t as cut and dry as refusing to rent to someone because of the color of their skin.
There are numerous caveats and subtleties that you should be aware of to avoid an embarrassing and costly lawsuit.
So, in honor of National Fair Housing Month, we thought we would spend some time breaking down the Fair Housing Act so that you don’t make any of these avoidable mistakes.
What is the Fair Housing Act of 1968?
Also known as Title VIII if the Civil Rights Act of 1968, the Fair Housing Act is a piece of U.S. federal legislation that was passed in order to protect individuals and families from housing discrimination in the sale, rental, financing, or advertising of housing.
Martin Luther King Jr. was one of the biggest advocates for the bill and President Lyndon B. Johnson urged for Congress to pass it in the wake of MLK’s death.
“The Fair Housing Act protects buyers and renters of housing from discrimination by sellers, landlords, or financial institutions and makes it unlawful for those entities to refuse to rent, sell, or provide financing for a dwelling based on factors other than an individual’s financial resources.”
The Department of Housing and Urban Development is charged with enforcing the legislation and investigating any complaints.
Who is protected under the Fair Housing Act?
The federal Fair Housing Act protects 7 classes at this present time which include:
- National Origin
- Familial Status
However, there are additional protected classes at the state and municipal levels in Indiana.
The state recognizes Ancestry as a protected class and Marion County recognizes 3 additional protected classes which are:
- Sexual Orientation
- Military Service Veteran Status
As you can see, just knowing the national laws is not enough, you must be aware of your local ordinances as well in order to fully comply with Fair Housing guidelines.
Definitions of protected classes
- Race - A family, tribe, or group of people coming from the same common ancestors
- Color - The color of an individual’s skin
- Religion - Refers to all aspects of religious belief, observance, and practice
- Sex - Includes gender (male or female, gender identity, and gender expressions
- National Origin - Refers to the country in which a person was born, or from which the person’s ancestors came
- Familial Status - Refers to the situation where there is one or more persons under the age of 18 who resides with a parent, legal guardian, etc. Also applies in the case of pregnancy
- Disability - Refers to both physical and mental illness
- Age - Refers to the length of time a person has been alive
- Ancestry - Refers to an individual’s lineage or line of descent
- Sexual Orientation - Refers to heterosexuality, homosexuality, and bisexuality
What is Steering?
Steering is an unlawful practice that includes any words or actions that are intended to influence the choice of prospective buyers or tenants.
For example, if a family with children is looking at an apartment complex and the leasing manager says something like, “this building is closer to the playground,” that could be considered steering and in turn, discrimination.
You may have committed this violation unknowingly at some point, and maybe even thought you were being helpful, but it’s these small nuances that can backfire.
Examples of housing discrimination
Assume that in all of these examples, the applicant meets all rental requirements and would otherwise have been rented to if not for a particular trait.
- Race: An African-American person answers an online ad for an apartment. The landlord tells him that apartment has already been rented. It turns out that the apartment was not rented, and the landlord later rents it to a white applicant who answers the same ad.
- Color: A rental manager charges individuals with dark skin a higher security deposit than people with light skin.
- Religion: A rental property owner advertises that the home is in a predominately Jewish neighborhood so it would be perfect for anyone of that religion.
- National Origin: A landlord checks the credit records of all Hispanic applicants and uses small credit problems as an excuse to refuse to rent apartments to them. It turns out that the landlord does not always check white applicants’ credit records or overlooks small credit problems in their records.
- Sex: A landlord refuses to rent a house to a single woman, but will rent it to a single man.
- Familial Status: A property manager will only allow families with children to live in certain buildings or on certain floors.
- Disability: A landlord refuses to rent to a blind woman because there is a no pet policy and she has a service dog.
- Age: A real estate agent tries to persuade a 50 year old not to buy a home in a certain neighborhood because it’s predominantly younger people. (Steering)
- Ancestry: A bank won’t grant a loan to an individual because they are descendants of Hitler.
- Sexual Orientation: A landlord refuses to rent their property to a same-sex couple.
Fair Housing Act exemptions
Incidentally, there are 3 groups that could be exempt from having to follow Fair Housing guidelines:
- Single-family homes rented without the use of a real estate agent or advertising are exempt from the federal Fair Housing Act as long as the private landlord/owner doesn’t own more than three homes at the time.
- Apartments of four units or less are also exempt if the owner lives in one of the units. However, even if this multifamily exemption applies to you, your rental advertising must still comply with the Act.
- The rental of a single room in a home, qualified senior housing, and housing operated by religious or private organizations, if certain requirements are met.
While you may legally be exempt from having to be in strict compliance, morally, you should never discriminate based on any of the protected classes.
Tips to avoid housing discrimination complaints
- Ensure your entire staff is trained on all Fair Housing laws and that they understand what words and actions can and cannot be used.
- Be consistent with tenant screening, advertising, and rental requirements. It’s important to have your policies and processes in writing.
- Treat everyone with respect and dignity.