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Exclusive Guide to Fair Housing

Exclusive Guide to Fair Housing

Hi this is Tanya with Envy Property Management. As a landlord, it is crucial that you be very educated and familiar with fair housing laws. You don’t want to wind up in a lawsuit simply because you hadn’t educated yourself about Fair Housing and what you can and cannot do as a landlord. The goal of the Fair Housing Act is to make sure all tenants and prospective tenants are treated fairly, but what exactly does this entail? Today I’m going to give you our exclusive guide to Fair Housing, answering questions like, what is the Fair Housing Act, how are Fair Housing laws enforced, how to protect yourself as a landlord against Fair Housing violations, and Fair Housing exemptions.  Although there are multiple organizations that are required to abide by the Fair Housing Act, today I’m only going to focus on landlords.  

#1: What is the Fair Housing Act?

The Fair Housing Act of 1968 is a discerning set of guidelines that prevent prospective homeowners and renters from discrimination through the sale, rental agreement or financing of their home.

The act was signed into law by President Lydon Johnson in 1968 after several years of policymakers struggling to push it through. It wasn’t until the assassination of Martin Luther King, Jr. that prompted congressional action.

Today, the U.S. Department of Housing and Urban Development (or HUD) oversees and enforces the Fair Housing Act. It prohibits discrimination in housing based on: race, color, national origin, religion, sex (including sexual orientation and gender identity), familial status and disabilty. Anyone who attempts to rent, buy or sell a home, take out a mortgage or obtain housing assistance, is protected by the Fair Housing Act. 

Housing is a broad term, so who exactly is prohibited from practicing discrimination?

The FHA outlaws discrimination by any of the following:

  • Landlords
  • Property owners and managers
  • Developers
  • Real estate agents
  • Brokers
  • Mortgage lenders 
  • Homeowner associations
  • Insurance providers
  • Anyone else who impacts housing opportunities

Essentially, any person or entity that’s involved in the process of securing housing is required to follow FHA guidelines. If someone believes they were discriminated against, they can contact HUD for an investigation.

#2: What is Considered Discrimination?

Discrimination can occur in many ways and to different classes of people. A few examples of discrimination are:

  • Applicant Screening - Fair housing claims are often brought from the application and screening process.  Many states have laws in place that require landlords to provide a printed notice of eligibility requirements to a prospective tenant with the rental application. This notice should state the landlord’s tenant selection criteria and the grounds for which the rental application may be denied, including the applicant’s criminal history, previous rental history, current income, credit history or failure to provide accurate or complete information on the application form. This notice should also come with an explanation of the application process and a statement that your process adheres to all applicable fair housing laws. Landlords should strictly adhere to the written policy and keep good records of each applicant or inquiry.
  • Vacancy Marketing - Be aware of how you are marketing your property. This means that your marketing strategy must be inclusive of everyone and focused on the property’s attributes and amenities and not what type of residents you are seeking. Avoid slogans such as “great for families” as it might be discriminatory against single persons. This issue might also arise while giving a tour of the property to a prospective tenant. Oftentimes prospective tenants will ask “What kind of people live here” or “How many families live here?” these questions can lead to fair housing discrimination claims and should only be met with answers that state the property is inclusive of everyone who meets its rental criteria which is provided at the time the application is requested. 

#3: What are Fair Housing Act Exemptions

The Fair Housing Act applies to most situations, however, there are some exemptions.

For example, if a dwelling has four or fewer units and the owner lives in one of them, they are exempt from the FHA. However, be sure to check your local and state laws as there may be additional laws to take into consideration. 

Additionally, any single-family housing that’s rented without the use of a broker is exempt from the FHA, as long as the owner is a private individual who doesn’t own more than three such homes at one time. Again, check your local and state laws for additional considerations. 

#4: How Fair Housing Laws Are Enforced

The HUD is the federal agency in charge of implementing and enforcing the Fair Housing Act. It enforces this act through its Office of Fair Housing and Equal Opportunity (FHEO), which is headquartered in Washington, with 10 regional offices across the United States. The purpose of these offices is to enforce FHA compliance, administer fair housing programs and educate consumers.

The FHEO primarily enforces fair housing programs by funding third-party organizations. For example, the Fair Housing Initiatives Program provides grants to private organizations that investigate complaints, and even place people undercover to find FHA violations.

#5: How to Protect Yourself Against Fair Housing Violations

Simply put, the best way to avoid fair housing complaints is to treat every tenant and prospective tenant the same. If you're enforcing house rules against one tenant but not another, this is grounds for a fair housing complaint. What you do for one tenant you have to do for all. Policies provided in the lease agreement and community addenda must be applied equally to each and every tenant.

The penalties for fair housing violations can be steep, and if proven in court, fines can be $16,000 for a first violation and up to $65,000 for future violations for civil penalties. In cases where Justice Departments have been involved, fines up to $100,000, as well as punitive damages have been awarded by federal courts. 

Fair Housing is something landlords MUST take seriously, especially if you’re self-managing. You must keep yourself educated and up to date with ALL Fair Housing laws. 

That’s it for today’s video, I hope our Exclusive Guide to Fair Housing was helpful. If Fair Housing seems too overwhelming for you and you want help choosing a Northern Utah property management company with years of experience, please contact us at Envy Property Management. We are a wealth of information when it comes to professional property management of your investment property. You can always ask us for valuable tips and extra resources to make the choice simple and painless. Give us a call today, 801-337-4337 or visit our website at where you can easily view our three-tiered pricing plan, so you can choose the package that best fits you and your needs.