Being a landlord is a huge responsibility, and an important part of that responsibility is understanding federal fair housing laws. Long before you list a property for rent, you should familiarize yourself with the Federal Fair Housing Act (FHA) and your state and local laws to ensure compliance throughout the rental process.
In its 2023 Fair Housing Trends Report, the National Fair Housing Alliance reported over 33,000 fair housing complaints—the highest number ever reported in a single year. Given these record-setting numbers and the fact that most fair housing violations go unreported, fair housing compliance is more important than ever for landlords.
Below, we’ve compiled a comprehensive guide for understanding fair housing regulations and ensuring landlord compliance throughout the rental process.
What Is the Fair Housing Act?
The Fair Housing Act prevents housing discrimination and ensures equal opportunities for all renters, homebuyers, mortgage applicants, homeowner’s insurance applicants, and participants in other house-related activities.
Enacted as part of the Civil Rights Act of 1968, the Fair Housing Act is considered one of the greatest legislative milestones of the civil rights era. The House of Representatives passed the bill in the days following the assassination of civil rights leader Martin Luther King, Jr., which created monumental change in a dangerously discriminatory landscape. Congress later expanded the law in 1988 to prohibit discrimination based on a person’s disability or family status (an expecting mother, single parent, or married couple with children).
Who Is Protected Under the Fair Housing Act?
The Fair Housing Act protects seven designated classes from housing discrimination. Under federal law, each state must enforce these protections in their respective landlord-tenant laws.
The Fair Housing Act prevents landlords from discriminating against potential tenants based on the following categories:
- Race: Landlords cannot discriminate against potential tenants based on race, defined as the physical traits regarded as common among people of shared ancestry.
- Color: Similar to race, landlords cannot discriminate against renters based on the color of their skin. Though associated with race, color is categorized as a separate characteristic under the Fair Housing Act.
- Religion: Fair housing laws protect renters from discrimination based on religious beliefs or practices. For example, you shouldn’t advertise your property by saying it's close to a church or synagogue, as it could be construed as bias toward tenants of certain religious groups.
- Sex: Renters cannot be discriminated against based on their sex. Some state jurisdictions expand these regulations to include gender identity and sexual orientation.
- National origin: Landlords cannot factor in an applicant’s nation of origin when selecting a tenant. This applies to a renter’s country of birth, ancestry, culture, and language.
- Disability: The Fair Housing Act prohibits landlords from discriminating against tenants with mental or physical impairments. Landlords must ensure reasonable accommodations and accessibility in their homes for these individuals.
- Familial status: Landlords cannot turn tenants away based on their marital status or number of dependents. This includes whether they have children, elderly household members, or have a baby on the way.
Depending on your location, you might also be subject to state and local mandates on housing discrimination. For example, landlords in the state of California cannot discriminate on the basis of sexual orientation or gender identity.
What Is Considered Illegal Discrimination?
The Federal Housing Act requires landlords to treat all rental applicants equally. If you want to deny an applicant, your decision must be based on legal, legitimate business reasons. Otherwise, it could be perceived as one of the following forms of illegal housing discrimination:
- Refusal to rent or sell: occurs when a landlord denies an applicant based on at least one of the FHA-protected categories. As a landlord, you can only deny applicants for legitimate business reasons such as insufficient income-to-rent ratio, low credit score, or poor rental history.
- Different terms and conditions: occurs when a landlord imposes different terms, conditions, or privileges for certain applicants based on their protected class. For example, if you require a higher security deposit for applicants of certain ethnicities.
- Advertising discrimination: occurs when any notice, statement, or rental advertisement shows a preference for certain tenants based on at least one of the FHA-protected categories. For example, you could not advertise your property by saying it's “ideal for families.”
- Arbitrary or broad application policies: occur when a landlord implements blanket policies excluding broad groups or classes of applicants. For example, you can’t deny an applicant because they have a criminal record. Instead, you must consider the nature and severity of their criminal offense. If their history indicates potential threats to your property or neighboring community, you have a legitimate reason to deny the applicant. Otherwise, you must consider them like you would any other candidate.
What Is Not Allowed Under the Fair Housing Act?
Under the Fair Housing Act, there are certain things you cannot say, require, or screen for. Whether it be asking applicants inappropriate questions or evicting a tenant for their physical or mental disability, you have to be mindful of your actions when ensuring fair housing compliance. Otherwise, you could get in serious legal trouble and find yourself owing thousands of dollars in fees.
Here are some examples of common fair housing mistakes that you’ll want to avoid as a landlord:
- Creating rules that only apply to renters with children. For example, a rule saying “Children may not ride bicycles on the property” is discriminatory if other residents are permitted to ride bicycles. This policy is only permissible if all residents are prohibited from riding bicycles on the property.
- Asking a prospective tenant how many children they have or if they are expecting in a pre-screening interview or rental application. This question is discriminatory, as the FHA protects familial status.
- Failing to maintain and retain proper documentation of a prospective tenant’s application process. If a prospective tenant accuses you of discrimination, the U.S. Department of Housing and Urban Development (HUD) may request all documentation, including rent offered, apartments shown, specials, deposits, and fees. If you cannot supply this documentation, there is a presumption that discrimination against the applicant did occur.
- Choosing one rental applicant over another for reasons other than an applicant not meeting your stated qualification criteria, such as sufficient income, credit score, or rental history. Your selection must be impartial, and you should display your applicant criteria clearly on your listing.
- Denying a disabled resident’s request for accommodations like an assigned parking spot or grab bars in the bathroom. The FHA requires that you make reasonable arrangements, defined as a “change, exception, or adjustment to a rule, policy, practice or service that may be necessary for a person with disabilities.”
- Evicting a hoarder, as this is considered a mental or physical disability under the FHA.
- Failing to establish a clear maintenance response policy. Mishandling or ignoring maintenance requests is a common fair housing complaint in the rental industry. As a landlord, you should provide basic FHA training to your maintenance team and create uniform policies to handle maintenance requests. Document all requests and records of repairs.
- Not providing fair housing training for all your employees and associates. Be sure you protect everyone involved in your business by providing regular training on FHA regulations. The more you know the laws and guide your team, the more likely your associates will comply.
Making any of these mistakes could result in serious legal consequences and fines. Cases tried before an HUD Administrative Law Judge could incur penalties of up to $21,000 for a first violation. For subsequent violations, the fine can increase to a maximum penalty of $105,194. In addition to the administrative penalties, you may be liable for paying the plaintiff's damages and attorney’s fees.
Does the Fair Housing Act Cover All Housing Types?
The Fair Housing Act covers most housing types, from apartment units to condominiums. However, there are certain situations in which landlords or property managers are exempt from FHA regulations. These include:
- Owner-occupied buildings with no more than four units: These are properties where the owner occupies one of the units, and the building has a maximum of four units. Ex. A duplex where the owner occupies one unit
- Single-family homes sold or rented without a broker: An FHA exemption applies when the owner sells or rents their property without sourcing a real estate agent or broker. Ex. A homeowner renting out their property directly through a website or local advertisements
- Housing operated by religious organizations: Religious-affiliated organizations can give preference to tenants of the same religion when operating non-commercial housing. These organizations are exempt as long as they don’t exclude based on race, color, or national origin. Ex. A monastery
- Private clubs: Private organizations can deny housing to non-members if the housing is not operated commercially. This allows clubs to maintain their exclusivity and cater to their membership base. Ex. A country club offering lodging facilities exclusively to its members
- Age-restricted communities: Age-restricted communities are exempt from FHA regulations because they are designed for certain age groups. These properties will typically offer housing exclusively for residents 55 or older. Ex. A retirement village
Remember that even if you qualify for a fair housing exemption, you are still subject to state and local laws. Depending on your area, your state regulations may be more stringent than federal parameters, potentially limiting these exemptions.
Legal Compliance Tips for Landlords
Regardless of property type or state legal parameters, all landlords must ensure compliance and promote equal housing opportunities for renters. By following the best compliance practices and staying up to date on legal requirements, you can create a fair, welcoming rental process for all prospective tenants.
Below are some valuable tips for ensuring fairness and legal compliance throughout the rental process.
Use objective screening criteria
As a landlord, it’s important to keep your rental applications objective. This means keeping your criteria impartial and only asking for information relevant to an applicant’s potential tenancy. For example, you can ask applicants to provide their employment status, rental history and references, and additional details such as number of pets or smoking tendencies. These are all valid asks of an applicant, as they pertain to their ability to be a good tenant and show no sign of discriminatory bias.
Ask the right questions
When interviewing a potential tenant, keep your questions relevant and appropriate. When do you plan to move out of your current home? Why are you looking for a new place? How many people will be living in the unit? Are you confident in your ability to pay rent? These questions are relevant to an applicant’s potential tenancy and will help you make informed decisions about their application.
Though you might be asking with the best intentions, there are questions you should avoid asking. Below are some examples of questions that could make renters uncomfortable and put you at risk of a fair housing violation:
- What religion do you practice?
- Will you be looking for a church in the area?
- Where were your parents born?
- Were you born in the US, or did you move here?
- Do you have kids?
- Are you pregnant or planning to become pregnant?
- Are you married?
- What is your sexual orientation?
- Are you disabled?
- Will you need special accommodations for a disability?
Be aware of implicit bias
All humans have unintentional biases that can play into their decisions. As a landlord, you must recognize these biases and avoid them when screening rental applicants. Though it will take conscious effort, actively mitigating these biases ensures fair and equitable treatment for all potential tenants.
Keep thorough records
Keeping detailed, written records throughout the screening process is a good business practice. Make note of every time you contact an applicant, including the date, time, and location if you met in person. You should also keep records of tenant screening results, including background check findings like credit history and criminal record. This way, you’ll have evidence of legitimate business reasons for denying an applicant, protecting you from potential discrimination accusations.
Ensure Fair Housing Compliance with Apartments.com
Fair housing compliance can seem daunting. From using the right language in your advertising to creating a fair lease agreement, it’s hard to ensure a fair and transparent rental process if you don’t have the right guidance or tools at your disposal. Luckily, that’s where Apartments.com comes in!
Apartments.com offers a comprehensive suite of Renter Tools to help ensure compliance throughout the rental process. With our resources, you can create and manage listings, screen applicants, collect rent payments, and more. Our team is dedicated to providing resources that create a fair and inclusive rental process for all.
This article is not intended as legal advice and shouldn’t be construed as such. If you have questions about fair housing laws, please visit HUD.gov or contact a real estate attorney in your state.
This article was originally published on July 21, 2020, by Alecia Pirulis.
