The Fair Housing Act (FHA) was enacted by Congress in 1968 with the goal removing discrimination in housing. As a North Carolina landlord, you're required to adhere to the terms of the Act, which can affect anything from rental advertisement 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.
20 years later, the FHA was amended to accommodate more protected characteristics.The Act now included disability and familial status in its list of protected characteristics.
In addition, there are some states, such as North Carolina, that have passed legislation to include even more protected characteristics.
How many classes are protected by fair housing in the state of North Carolina?
The following are the protected characteristics in the state of North Carolina:
- Sexual orientation
- Gender identity
- Genetic information
- Citizenship status
- Sickle cell or hemoglobin C trait
- Military status or service
- Lawful use of lawful product when not at work
- Aids/HIV status
Individual cities may also have more additional classes.
What properties does the FHA cover?
The FHA covers most residential units, including:
- Group homes
- 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. Additionally, non-profit private clubs and religious organizations may also be exempt.
What are some common violations to the Fair Housing Act?
As a landlord, some scenarios may pass as discriminatory. This can especially occur during rental advertisement or during tenant screening.
1. Rental Advertisement
When writing a rental ad, you must take caution not to inadvertently discriminate against tenants. Examples of statements that discriminate against tenants include:
- Seeking a mature couple
- 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 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 screening questions that can pass as being discriminatory include:
- Will you be retiring soon?
Age is a protected characteristic under the 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 class, questions regarding familial status are a no-go zone.
- Are you interested in the nearest mosque/temple/church?
Religion is also a protected class in NC Fair Housing rules. Asking a prospective tenant this question may be more harmful than useful.
- How many children do you have?
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?
As innocent as it may seem, it actually violates the law as it is similar to 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 tenants when screening them.
- How much income do you make in a month?
- When do you plan on moving in?
- Why are you leaving your current residence?
- 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 tenant while adhering to the Fair Housing Law.
What are the civic penalties for Fair Housing Violations?
The government body mandated to enforce the FHA is the U.S. Department of Housing and Urban Development (HUD). Earlier this year, it published new penalty amounts for entities and individuals that have been found guilty of violating the FHA.
Under the new inflation-adjusted civil penalty amounts, the maximum penalty amount is $21,410 for first-time offenders. A respondent who's been found guilty of violating the FHA in the last 5 years risks getting fined $53,524. And, respondents who have violated the Act multiple times in the last 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 management company help?
As a landlord, failure to comply with the FHA can be bad for business. You'll not only risk ruining your reputation, but you could also suffer severe financial repercussions.
When just starting out, complying with the FHA can be tricky and you may find yourself inadvertently violating some restrictions due to lack of proper understanding. Luckily, a professional property management company can help. Contact us today.
Disclaimer: This information isn't a substitute for legal advice from a qualified attorney. If you have any questions regarding the content herein, don't hesitate to contact us.