Property managers and landlords have a lot of leeway when it comes to approving new tenants for their rental units based on applicants’ credit scores, criminal history, financial background and earnings, and rental history. Nevertheless, the federal government does impose limitations regarding tenant screening practices that are considered discriminatory.
There are seven protected classes under the Federal Fair Housing Act. They include:
- National origin
- Familial status
Most people are generally aware of laws against discriminating against tenant applicants as they pertain to these seven protected classes. Here we delve into exactly what constitutes discriminatory practices—some more subtle than others—that can land property managers and landlords in legal hot water.
Passed into law in 1968, the Fair Housing Act prohibits discrimination based on certain protected classes. The fair housing protected classes are color, religion, race, national origin, gender, or familial status.
Despite its passing, discrimination in housing is still rife in modern-day America. Last year alone saw about 25,000 housing discrimination complaints filed, according to the National Fair Housing Alliance (NFHA).
It’s also worth noting that these are only reported incidents. NFHA estimates there could be more.
Half a century later, many Americans still don’t know what steps to take when they believe they’ve been discriminated against.
Thorough tenant screening benefits rental property owners by validating potential tenants’ reliability and financial means to pay their monthly rent. It also benefits renters by assuring a higher standard of neighbors across the board.
Effective tenant screening requires excellent online or software-based screening tools that run financial background checks, verify employment and income, provide applicants’ rental history (including past evictions), and criminal background checks. These background checks can be done manually as well, but they take a huge amount of time and perseverance. For this reason, many property owners leave tenant screening in the hands of property managers who have the tools and expertise to conduct them properly.
Care must be taken to ensure that the tenant screening process is fair and non-discriminatory without exception. That includes avoiding any of the following practices either intentionally or unintentionally:
- Running background checks selectively
For tenant screening to qualify as fair, you’ll need to treat all prospective tenants equally. In other words, if you perform any background, credit or rental history checks on one tenant applicant you must perform them on all applicants.
- Asking about marital status or children
Familial status is a protected class under the Fair Housing Act. You may, however, simply reword the question by asking how many occupants will be living in the rental. Y
- Asking about an applicant’s race
Asking about a tenant applicant’s race is in direct violation of the Fair Housing Act. Never do this.
- Asking about service dogs
Be very careful with your wording when asking prospective renters if they have a service dog. You don’t want applicants to infer that you don’t rent to people with a disability, as this is a protected class. The federal government provides significant protection to renters with disabilities.
First and foremost, property managers and landlords may not ask prospective tenants with disabilities about the cause or nature of their disability, nor may you ask to see their medical records. Read more about your responsibilities for screening prospective tenants with disabilities.
Once a tenant with a disability moves in, fair housing laws also require property owners to make reasonable modifications to the property to accommodate them. Modifications are made at the property owner’s expense.
Generally, people with disabilities are specified as those with a physical or mental disability that substantially limits one or more major life activities.
- Intellectual disabilities
- Mental illness
- Visual impairments
- Hearing impairments
- Mobility impairments
- HIV, AIDS, and AIDS-related complex
- Chronic alcoholism
View the Fair Housing Disability Guide for more information.
Landlords have the right to select the tenants who live in their rental properties. Be that as it may, property managers and landlords must make their tenant selections in accordance with FHA stipulations to make sure that all applicants are given equal consideration.
The Fair Housing Act stipulates that the inclusion of discriminatory language in print or digital marketing and advertisements for the sale or rental of housing units is unlawful.
That means you may not:
- Mention a preference for tenant according to race.
- Mention a preference for tenants according to religious beliefs. (That means you may not include statements like,“Nice, Christian neighborhood” is illegal).
- Mention a preference for tenants of a specific national origin.(For example, you may not include statements like “Predominantly Jewish neighborhood” or “Indian female seeks Indian roommate”).
- Set limits on the number or ages of children or indicate a preference for adults, couples or singles.(For instance, you may not include statements like “Ideal for singles or couples” or “Nice, quiet, mature neighborhood”).
- Indicate a preference for gender, sexual orientation preference or a person’s actual or perceived sexual orientation, gender identity, or marital status. Terms like “mother-in-law suite,” “family room,” or “master suite” are commonly used expressions to describe architectural features and are therefore acceptable.
Landlord/tenant conflicts happen, but not all disagreements are grounds for eviction. Each state has laws that describe what legally constitutes grounds for eviction. (Eviction laws in all 50 states).
In most states, you can evict a tenant under the following circumstances.
- Lease violation:For example, failing to pay their rent.
- Property damage:Wherein a tenant causes excessive property damage.
- Criminal activity:Illegal or drug-related activity is a serious crime.
While an eviction can become necessary in some situations, it should always be considered a last resort remedy. When property managers and landlords are forced to evict a tenant, always make sure to adhere strictly to the law.
Evicting a tenant as a retaliatory act is against the provisions of the Fair Housing Act. You shouldn’t pursue a tenant eviction to retaliate for perceived wrongdoing.
Examples of retaliatory acts include:
- Increasing your tenant’s rent after they complain to a building inspector.
- Threatening or harassing a tenant after they have exercised their legal rights.For instance, after they notify local authorities about potential code violations.
- Denying the renewal of a tenant’s lease without a valid reason.
- Aggravating a tenant purposefully.For instance, sabotaging access to a common area or parking lot or delaying repairs to a tenant’s unit
As a property manager or landlord, understanding your rights and responsibilities under the Fair Housing Act is critical to avoiding the fines and lawsuits that can result from non-compliance. Without a solid understanding of the “do’s and don’ts” of fair housing laws and regulations, you could be setting yourself up for serious financial hits and/or a tarnished reputation that will cost you tenant leads.
Note: It’s important to keep up with FHA regulation changes, as the Trump administration, under the direction of Housing and Urban Development (HUD) Secretary Ben Carson, has begun eliminating, delaying, or revising fair housing regulations such as those pertaining to protected classes.