Real Estate

Three Fair Housing Act Updates and What They Mean for Landlords

The Fair Housing Act (FHA) of 1968 is a federal law that was passed by congress in a effort to put an end to widespread housing discrimination in the United States. The FHA provides protection against discrimination to seven protected classes:

  • Race
  • Color
  • Religion
  • National Origin
  • Sex
  • Familial Status
  • Disability

While the main purpose of the Fair Housing Act is to protect against discrimination in the sale, rental and financing of housing, the law is extremely complex and its interpretation and application continue to evolve–as does the definition of discrimination. Even well-intending landlords and property managers can find themselves in legal hot water if they aren’t careful.

In particular, there are three recently expanded protections under the Fair Housing Act that landlords should pay attention to. The following is a summary of those updates.

Disparate Impact

Before you can understand “disparate impact”–and it’s relation to Fair Housing laws–you must first understand “disparate treatment”. Disparate treatment is when you intentionally treat a protected class of individuals differently than a non-protect class of individuals in a way that affects them adversely. An example of disparate treatment would be a saying “We don’t accept same-sex couples.” Disparate impact, is the opposite of disparate treatment. Even though a landlord implements the same policies and procedures for all prospective renters, the application the policies has a discriminatory effect against a protected class.

Unfortunately, well-meaning landlords and property managers can implement policies and procedures that have unintended adverse impact on one or more protected classes under the FHA, whereby creating liability. For example, a landlord or property manager may state on a housing application that prospective renters must be “gainfully employed” to ensure they can afford to pay for rent. However, this policy has the potential of discriminating against individuals who are disabled, unable to maintain a full-time job, or unemployed. It’s okay for property owners and managers to make sure prospective tenants can pay the rent, but they must do so in a way that avoids disparate impact on a protected class.

Whenever changes to property management procedures and policies are implemented, document the process used to make the change. Make sure to identify and note all nondiscriminatory reasons the change was made. To avoid any unintended mistakes or liability, you should check with a legal professional familiar with the FHA and the laws in your area. Some state and local jurisdictions have additional classes of protection.

Criminal Records Screening

In 2016, the Department of Housing and Urban Development (HUD) introduced new guidelines for how criminal background checks can be used for screening housing applicants. According to HUD, blanket policies against renting to individuals with criminal backgrounds have a disparate impact and are discriminatory against people of color, since people of color are more likely to be charged with drug-related crimes than white people. Landlords and property managers who use arrest records and one-strike rental prohibitions to turn applicants away can now be found liable under the FHA for discrimination. Landlords and property managers should consider the “nature, severity and recency” of any conviction when evaluating a prospective tenant’s application for housing.

Limited English Proficiency

According to a statement issued by HUD in 2016, since people of a different race or national original are often those with limited English proficiency (LEP), any type of language discrimination–with respect to housing–may be a violation of federal law under the Fair Housing Act. Language discrimination may be blatantly intentional or unintentional. To refuse rental or impose different terms on a renter due to LEP is intentially discriminatory. However, simply refusing to provide a housing applicant time to translate documents, or not making a concerted effort to communicate with them, may also be a violation of federal law under the Fair Housing Act, and trigger liability. Making sure application policies are consistent and fair is key to avoiding LEP discrimination.

Source of Income

Not renting to someone because they don’t have a “stable” job or received income from a non-traditional source used to be acceptable–but not anymore. You’re walking on pretty thin ice these days if you refuse rent to someone based on source of income. In fact, most states have adopted rules that prohibit discrimination based on source of income. A landlord can no longer refuse to rent to a housing applicant because their sole source of income comes from alimony, rental assistance or another source. Even if your state has no such laws, under the federal Fair Housing Act there are disparate impact considerations that can create legal liability for landlords who deny rent based on source of income.

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Author: Becton Loveless
Becton Loveless is an entrepreneur, specializing in search engine optimization (SEO) and strategic internet marketing. He has built and sold several successful businesses supported entirely by SEO including an online nutraceuticals company,.... read more
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