The Fair Housing Act is a law created to prevent landlords from discriminating against protected classes and provide equal housing opportunities to all.
Landlords, rental agents, and property managers need to learn about the Fair Housing Act to practice fairness in evaluating potential tenants and comply with the law.
This article will focus on 6 things you should know about the Fair Housing Act to ensure that real estate professionals and investors have a good grasp of the policy, avoid conflicts that can harm their business negatively, and keep their renters happy.
1. What Is the Fair Housing Act?
Created in 1968, the Fair Housing Act was designed to safeguard protected classes from any form of discriminatory activities when it comes to renting or selling a property.
It was to encourage fair housing practices nationwide and was later amended in 1988. Regardless of race, color, disability, sex, religion, national origin, or familial status, everyone can rent or buy a home.
Potential tenants and homebuyers are offered protection by the Fair Housing Act, Civil Rights Act, Disabilities Act, 14th Amendment, and Equal Credit Opportunity Act among others.
2. Who Are the Protected Classes Under the Fair Housing Act?
Rental candidates and home buyers are safeguarded through the Fair Housing Act no matter their:
- Race
- Color
- Sex
- Religion
- Disability
- Familial status
- National origin
3. What Are the Additional Protected Classes?
In addition to the cited protected classes above, renters and buyers are offered more protection through state and local laws.
The additional protected classes are the following:
- Age
- Citizenship
- Veteran or military status
- Genetic information
- Sexual orientation
- Gender identity or expression
- Source of income
- Criminal history (arrest with no conviction)
You should also take the time to review the local fair housing laws in your state to make you remain compliant. The source of income may not apply to Section 8 in some states and can vary per state. It is best to consult with a local HUD office to clarify and adhere to current regulations.
4. What Are Fair Housing Act Violations?
Although some may have heard about the Fair Housing Act, not everyone knows they may have violated the FHA.
The main objective of this law is to ensure that renters, landlords, real estate agents, property managers, and lenders can avoid discriminating against buyers and lenders and attract long-term tenants.
Here are some prime examples of FHA violations:
- Telling an interested buyer or renter that the property is unavailable for sale or rental when it is still unoccupied or has no buyer.
If a person belonging to a protected class inquires after an advertised unit but is informed that the property is unavailable when it is still in the market, it is considered a violation to the act.
- Rejecting a member of a protected class when they apply for housing. If a potential renter who has a disability is denied a rental for bringing a service dog, then this is a clear violation of the FHA.
- Changing the rental or sale terms and conditions of a property in an attempt to discourage a prospective renter or buyer.
Should a property seller or landlord tweak the terms of the sale or rental to make it harder for the interested party to buy or rent the property, this constitutes a violation.
If the security deposit requirement is doubled, or only a particular rental space is made available, this violates the protected class’s rights.
You might think these are rare situations, however, these incidents happen fairly often and issues of housing discrimination often arise.
Some unintentionally commit these violations, not knowing that it is against the law. Even if the act of discrimination is unintentional, the Fair Housing Act is still applicable.
5. What Are the Fair Housing Act Exemptions?
Even if the FHA is specific about protected classes and has clear examples of violations, there are still exceptions to the act, such as:
Single-family homes that are rented or sold with no broker, as long as you are a private homeowner who does not possess more than three rented-out single-family homes at any given time.
If you have a small building with four or fewer units and occupy one of them, however, your rental advertising must still comply with the Fair Housing Act.
Religious organizations are exempted on the basis that the apartment leases are of non-commercial purpose.
The organization can prioritize renting out to those who belong to the same religion, however, one should still uphold the other protected classes and must never discriminate based on national origin, race, or color.
As mentioned above, religious organizations are allowed preference for the members of their religions.
This can also apply to private clubs that want to rent out apartments for non-commercial purposes and are acting on behalf of the club. They are allowed to limit residency or provide preference for club members.
For properties designated as senior housing, they can choose people who match their requirements for older communities. This also applies to properties that are part of a federal, state, and local senior housing program.
Still, even if your property is exempted from the FHA, you should ensure that your ads are non-discriminatory.
6. How Do You Enforce the Fair Housing Act?
Enforcing the FHA is assigned to the Department of Housing and Urban Development (HUD). They accomplish this in two ways:
- Fair Housing Testers: HUD employees may go undercover and pretend to be potential tenants. It's vital to examine your rental ads and avoid mentioning any property descriptions or copy that may lead to a preference for a certain type of renter that is under a protected class.
- Investigation of Discrimination Claims: HUD employees can receive discrimination complaints from prospective renters should fair housing rights be violated. HUD will do a proper investigation and weigh if legal consequences are due.
Bottom Line
The Fair Housing Act guides property sellers and landlords in ensuring that proper housing rights are observed to limit any form of discrimination.
If you’re a property owner with more questions about The Fair Housing Act or are looking for guidance on their real estate investment, look no further! TE Johnson & Sons is here to help! Contact us today to get started!
