8 Things You Should Know About the Fair Housing Act

The Fair Housing Act (FHA) takes into consideration the interests of property buyers and renters to reduce discriminatory practices. As a rental owner, it's essential to know the basics of the FHA and how it will affect your rental business operation, whether you're compliant or not.

Being aware of the consequences will protect you from impending lawsuits, fines and reputational risks that can occur. So, developing a concrete understanding of the FHA will help you in the long run as a landlord.

This article will discuss 8 key pieces of information you need to learn regarding the FHA. It will ensure you're adequately prepared to manage your rental and escape losses that can result from negligence or ignorance of the statute.

1. History of the Fair Housing Act

Back in 1968, the need for a Fair Housing Act pushed it into creation. The FHA guards the interests of people desiring to buy, finance or rent a home by giving fair and equal treatment in terms of opportunity. Previously, sellers and landlords would only entertain buyers and tenants that they prefer. The FHA served to stop this discriminatory behavior and later in 1988, the FHA was amended.

2. Objective of the Fair Housing Act

The main purpose of the Fair Housing Act was to prevent housing discrimination of the protected classes. Otherwise, granting housing would only be for a selected few, making it unfair for some buyers and renters.

3. Protected Classes under the Fair Housing Act

Seven classes are under protection of the FHA. The law was created to limit discrimination of the buyers and renters based on the following:

  • Race
  • Color
  • Sex
  • Religion
  • Disability

  • Familial Status (having children below the age of 18 in a household, including pregnant women)
  • National origin

4. Exemptions under the Fair Housing Act

On a case-to-case basis, there may be exemptions under the Fair Housing Act:

  • Homes that are owner occupied under 4 units for rental
  • Single-family homes that are rented or sold without a broker's aid
  • Private clubs or organizations limited to members only
  • Religious organizations

5. Discriminatory Practices

As a landlord, awareness on what constitutes discriminatory actions will help you avoid breaking the law. Compiled below is a list of scenarios that represent unfair treatment of a person belonging to a protected class:

  • Telling a prospective renter that the rental is full, even if there are still several available units
  • Refusing to adjust policies for a disabled renter (ex. Not reserving the nearest parking spot for the handicapped tenant who has difficulty walking)
  • Refusing to make needed changes in housing at the expense of a renter with a disability
  • Not accepting a visually impaired prospect on account of having a service dog because of a no-pets rental policy (service animals are not recognized as typical pets)
  • Releasing advertisements that are marketed towards a select group of prospects that doesn't belong to the protected class
  • Having a different set of requirements for people under the protected classes before accepting their rental applications

  • Being negligent of property maintenance and repairs so the tenant under the protected class will move out
  • Giving lower quality rental units to people under the protected classes
  • Preventing renters under a protected class to have access to certain amenities

6. Enforcement of the Fair Housing Act

The HUD (Department of Housing and Urban Development) is tasked to handle all issues related to the Fair Housing Act. People who are victims of discriminatory practices under the FHA can make a complaint to HUD or proceed to court and file a case.

Normally, HUD proceeds with either of two strategies following a discrimination complaint under the Fair Housing Act.

1. Start an investigation

Upon receiving a complaint from individuals who experienced FHA discrimination, the HUD will investigate the claim. The team will study the case and check for veracity. If a Fair Housing Act violation occurred, then HUD will come up with the proper solutions. They'll ensure that fair treatment is enforced.

2. Run a test

HUD will send someone to act as a prospective renter to verify if discriminatory practices exist. Landlords can be found guilty through face-to-face or phone interactions. Marketing materials will also reveal if a landlord has violated the Fair Housing Act.

7. Penalties under the Fair Housing Act

The penalties differ depending on the gravity of the discriminatory action. The amount of the fine will vary if the violation is simple or if it was committed for the first, second or third time.

8. Observing the Fair Housing Act

As a landlord, it's your responsibility to fortify your knowledge of the FHA. Being more aware and strictly complying with the law will protect you from HUD complaints or lawsuits.

Here are key tips you can follow to prevent any FHA discriminatory accusations:

  • Exercise consistency when screening tenants, and use a uniform set of requirements and qualifying standards.
  • Ensure your marketing ads promote inclusivity to all applicants. Avoid mentioning specific groups to be solely welcome.
  • When conducting tenant interviews, be careful when phrasing your questions. Avoid leading questions that touch on the protected classes.
  • Treat everyone respectfully, even at the tenant screening stage.
  • Avoid categorizing service animals as pets.
  • Remove your biases and focus on treating everyone the same whatever their race, color, religion, disability, sex, familial status or national origin is.
  • Some states have added more protected classes beyond the regular seven. Make sure to remain updated on additional changes made to the Fair Housing Act.

Bottom Line

As a landlord, it's your duty to be a part of ending or reducing all forms of discriminatory practice when it comes to housing. Strictly adhere to the law and there won't be any worry over committing a violation. Here are key points to remember:

  • Review your marketing ads and refrain from using words that are discriminatory.
  • Exercise caution when interacting with prospects and renters through the phone, face-to-face or online.
  • Ask questions devoid of discrimination during the tenant screening.

To help you remain compliant with the Fair Housing Act, Suncastle Property Management can assist as your property manager. We're ever ready to provide you with professional property management services to ensure your investment success.

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