The Federal Fair Housing Act (FHA) was enacted by Congress in 1968 with the goal removing housing discrimination. As a North Carolina landlord, you're required to adhere to the terms of the Fair Housing Act, which can affect anything from rental marketing to tenant acquisition.
What does the Fair Housing Act cover?
When originally passed in 1968, the FHA barred discrimination on the basis of 5 characteristics in the sale, renting, and financing of housing. The 5 characteristics were sex, color, race, religion, and national origin. Allowing people who would not be able to get housing through discrimination the legal aid to now do so.
20 years later, the FHA was amended to add more protected characteristics and further legal aid.The Act now included disability and familial status in its list of protected classes.
In addition, some states, such as North Carolina, have passed legislation to include even more protected characteristics and legal aid.
How many classes are protected by Fair Housing in the state of North Carolina?
The following are the Fair Housing protected characteristics in the state of North Carolina:
- Race
- Color
- Disability
- Sexual orientation
- Sex
- National origin
- Religion
- Gender identity
- Citizenship status
- Age
- Military status or service
Individual cities in North Carolina may also have more additional classes than are in the federal Fair Housing Laws.
What properties does the FHA cover?
The North Carolina Fair Housing Act covers most residential units which all real estate agents should understand, including:
- Group homes
- Apartments
- Single-family homes
- Migrant housing
- Shelters for the homeless and domestic violence victims
- Long-term transient lodging
Limited exceptions also exist for certain types of homes such as some single-family homes and owner-occupied buildings of 4 or fewer units. Non-profit private clubs and religious organizations in North Carolina may also be exempt from Fair Housing rules.
What are some common violations to the Fair Housing Act?
As a North Carolina landlord, some scenarios may pass as discrimination. This can especially occur during rental advertisement or during tenant screening.
1. Property Advertisement
When writing a rental ad, you must take caution not to inadvertently discriminate against tenants. Examples include:
- Seeking a mature couple or someone of specific national origin
- Must provide proof of employment
- Not suitable for children
- No pets
- Great for a female student
- We only allow 3 people in a 2-bedroom unit
- We only rent the property to people who speak English
- This is a Christian home
2. Tenant Screening
Most landlords don't violate the Fair Housing Act intentionally. That said, sometimes a conversation to be misinterpreted as discrimination. To minimize chances of doing that, having a reliable, fair screening process is key.
Examples of questions that can break the Fair Housing Law include:
- Will you be retiring soon?
Age is a protected characteristic under the federal Fair Housing Act. So, as a landlord, you cannot ask a prospective tenant about their age, whether they are seniors or young.
- So, when is the big day?
It may be natural or even friendly to ask whether a couple - straight or gay - is engaged or married. As a protected Fair Housing class, questions regarding familial status are considered discrimination.
- Are you interested in the nearest mosque/temple/church?
Religion is also a protected class in North Carolina Fair Housing rules. Asking a prospective tenant this question may be more harmful than useful as they may feel discriminated against because of their religion.
Even something as innocent as making a remark about a person's cross necklace can be considered discriminating against them for their religion.
- How many children do you have and what is their national origin?
As casual as this question may seem, it's a big no-no. The Fair Housing Act prohibits discrimination against tenants based on familial status.
- Is that a service dog?
This actually violates Fair Housing Laws as you're essentially asking whether a person has a disability.
What screening questions don't violate the FHA?
The following are some screening questions you can ask prospective North Carolina tenants when screening them.
- How much do you make in a month?
- When do you plan on moving in?
- Why are you leaving your current property?
- Are you ready to pay all the move-in costs?
- Can you provide some references?
- Will you agree to a background check?
- Do you have any criminal history?
- How many people will you be living with?
Such questions will help you find a good North Carolina tenant while adhering to the Fair Housing Laws.
What are the civic penalties for North Carolina Fair Housing Violations?
The body mandated with enforcement of the FHA and handling fair housing complaints is the U.S. Department of Housing and Urban Development (HUD).
In North Carolina, the North Carolina Human Relations Commission (HRC) is the department that handles Fair Housing Act violations.
Earlier this year, it published new penalty amounts for entities and individuals guilty of violating the FHA.
Under the new inflation-adjusted civil penalty amounts, the maximum penalty amount is $21,410 for first-time Fair Housing offenders. A respondent who's been found guilty of violating the FHA in the last 5 years risks getting fined $53,524.
Respondents who have violated fair housing rules multiple times in 7 years risk getting fined a whopping $107,050.
What's more, these penalties are in addition to other fees such as attorney's fees and actual damages.
Before these adjustments, first offenders were fined $21,039, while second and third offenders were charged $52,596 and $105,194 respectively.
How can a property manager help?
The HUD is responsible for mandating the Federal Fair Housing Act, and as a landlord, failure to comply with the Fair Housing Laws is bad for business. However, real estate agents and a property manager can help as they have further understand of the act.
You'll not only risk ruining your reputation, but you could also suffer severe financial repercussions if a person reports you for housing discrimination.
As an overview, here are the protected classes under the North Carolina Fair Housing Act: race, color, religion, sexual orientation, sex, national origin, disability, familial status, gender identity, citizenship status, age, military status or service.
This means you cannot discriminate against these classes when selling, renting, and financing your property.
When just starting out, complying with the FHA can be tricky and you may find yourself inadvertently violating some restrictions and facing fair housing complaints due to lack of proper understanding.
Luckily, a professional property manager or real estate agents can help. Contact us today.
Disclaimer: This information about the Federal Fair Housing Act isn't a substitute for legal advice from a qualified attorney. If you have any questions regarding the fair housing rules or need legal aid, please get in touch with a qualified attorney or real estate agents who are part of property management companies.
