The Fair Housing Law has been updated countless times over the past few decades. As far as landlords are concerned, perhaps the most important change are the provisions that encourage people to file complaints! Add to that the fact that most of the fines collected go to the "aggrieved" parties and it’s easy to feel like it’s just a matter of time before either you make a bad decision or an enterprising rental applicant tries to test the system.
Avoiding Fair Housing complaints and discrimination lawsuits should be a high priority for every landlord. After all, even if you are completely innocent the cost of mounting a legal defense could bankrupt many landlords. Here are a few simple rules that can help keep you out of trouble.
According to Fair Housing Amendment Acts (42 U.S. Code §§ 3601-3619), A landlord must base the selection of tenants on pre-established and objective criteria. A landlord may reject prospective tenants based on a fair screening process that requires all tenants to undergo the same application process.
Develop a written company policy and follow it
Fair Housing Laws require a pre-established and objective screening criteria. This means you must develop a clear set of guidelines for tenant selection. This policy should be in writing and given to every rental applicant with the rental application. (Editor's Note: A Rental Application can be found in our forms section under New Tenant Forms. That application includes a sample company policy on page one. If you wish to modify the form send an email to request a MS Word version of the document.)
At a minimum your policy should include the following: Income requirements, Criminal History, Rental History, Credit History, and maximum number of occupants. Each component should be clearly spelled out. For example, you can refuse to rent to a convicted criminal if the crime included either bodily injury or property damage. So your company policy might read: “No felony convictions where there was any bodily injury or property damage, within the past 7 years, no misdemeanor convictions within the past 2 years, and sexual offenses never. “
In addition to these basic elements of a company policy you may want to include a pet’s policy or smoking policy. You may have other things you want to add. That’s fine as long as you make sure they do not violate any law and you apply the rule equally to every application.
You are free to choose among prospective tenants as long as your decisions are based on legitimate business criteria. Don't make choices based on personal reasons. You are entitled to reject applicants with bad credit histories, income that you reasonably regard as insufficient to pay the rent, or past behavior -- such as property damage or consistent late rent payments – which makes them a bad risk. It goes without saying that you may legally refuse to rent to someone who can't come up with the security deposit or meet some other condition of the tenancy.
Understand fair housing rules
Fair housing laws specify clearly illegal reasons to refuse to rent to a tenant. The Federal Fair Housing Acts prohibit discrimination on the basis of race, religion, national origin, gender, age, familial status, physical or mental disability (including recovering alcoholics and people with a past drug addiction).
Study, understand, and follow the rules. Anybody who deals with prospective tenants must follow fair housing laws. This includes owners, landlords, managers and real estate agents, and all of their employees. As the property owner, you may be held legally responsible for your employees' discriminatory statements or conduct, including sexual harassment.
Finally, be consistent
Consistency is crucial when dealing with prospective tenants. If you don't treat all tenants more or less equally -- for example, if you arbitrarily set tougher standards when renting to members of a racial minority -- you are violating federal laws and opening yourself up to lawsuits. And if you give one person a break (such as lowering the security deposit for a single mother but not for other tenants), you'll likewise risk a charge of discrimination from other tenants.