The Fair Housing Act (FHA) was enacted by Congress in 1968 with the goal removing property and housing discrimination. As a North Carolina landlord who is renting out their property, you're required by law 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 housing discrimination on the basis of 5 characteristics in the selling, renting, and financing of property and housing—sex, race, color, religion, and national origin.
This legislation provided legal protection to individuals and persons who would otherwise face discrimination, and be denied housing opportunities. Under the FHA, all persons are given equal opportunity to be considered to renting or purchase commercial and residential property, and acquire property insurance without discrimination.
Additionally, it helps prevent complaints by ensuring landlords, property managers, and real estate agents adhere to these federal laws and avoid discriminatory practices when renting out a property.
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, further expanding the legal protections for tenants and landlords alike.
How many classes are protected by Fair Housing laws in the state of North Carolina?
The following are the FHA protected characteristics for persons renting apartment units or property 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 may also have more additional classes than are in the federal Housing Laws. These local housing ordinances can provide further protection against renting discrimination, addressing specific needs and circumstances within each community.
Landlords and property managers must stay informed about both federal and local laws to ensure they are compliant and avoid any illegal discrimination that could lead to housing complaints.
What properties does the FHA cover?
The NC Fair Housing Act covers most residential properties, 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 housing laws.
However, these exceptions must still comply with federal housing laws, which include protections against housing discrimination based on race, color, religion, national origin, familial status, disability, and more. Landlords and property managers must ensure they are fully aware of these rules to avoid any potential violations and the risk of fair housing complaints when renting.
What are some common violations to the FHA?
For rental property owners and landlords in North Carolina, some scenarios may pass as housing discrimination. This can especially occur during rental advertisements or during tenant screening processes.
It's crucial for landlords to be aware of laws to avoid inadvertently engaging in discriminatory practices and ensure compliance with legal standards.
1. Property Advertisement
Rental ads are a great way for landlords to get in contact with potential tenants of residential rental properties. When writing a rental ad, each landlord must take caution not to inadvertently discriminate against tenants. Examples include:
- Seeking a mature couple or someone of specific race or national origin
- Must provide proof of employment
- Not suitable for families or children
- No pets
- Great for a female student
- We only allow 3 people to rent a 2-bedroom unit
- We only rent the our apartments to people who speak English
- This is a Christian home
2. Tenant Screening
Most landlords don't violate the FHA intentionally. That said, sometimes conversations between rental property owners and tenants can be misinterpreted as discrimination. To minimize chances of violating any laws, having a reliable, fair tenant screening process is key.
Examples of questions that can break the Fair Housing Law in North Carolina 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 and sex orientation are considered discrimination.
- Are you interested in the nearest mosque/temple/church?
This 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 religious beliefs as it is a protected class.
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 FHA prohibits landlords to discriminate against tenants based on familial status.
- Is that a service dog?
This violates Housing Laws as the landlord is essentially asking whether a person has an impairment.
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 into the rental?
- Why are you leaving your current rental 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?
As a rental property owner, you want to ensure you are compliant with the law at all times. A good property management company will offer tenant screening services and ask all the right questions to help you find a good tenant to rent your North Carolina rental property while adhering to the laws.
What are the civic penalties for North Carolina Fair Housing Violations?
The body mandated with North Carolina Fair Housing enforcement and handling 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 laws 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 federal Fair Housing Laws is bad for business. However, real estate agents and a rental property managers have a thorough understanding of the act and their services can help you avoid doing anything illegal.
You'll not only risk ruining your reputation, but you could also suffer severe financial repercussions and loss of rent if a person reports you for housing discrimination.
As a reminder, 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, or financing your rental property.
When just starting out, complying with the FHA can be tricky and you may find yourself inadvertently violating some restrictions and facing complaints due to lack of proper understanding.
Luckily, a professional property manager or real estate agent can help you. 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 contact the North Carolina office of Administrative Hearings get in touch with a qualified attorney or real estate agents who are part of property management companies..
