As a landlord you may be thinking that “it’s my rental, and I can rent to whom I want to” but, the reality is that you have to follow Fair Housing Laws just like every other landlord and property management company in the United States.
If you’re a landlord one of the absolute WORST things you could do is to deny a rental to someone based on “anecdotal” evidence or feelings. You may be committing this violation if you find yourself asking this question when reviewing applicants:
“Those two renters aren’t married so I am not going to rent to them, because what if one of them wants to move out”
“She is a single mom so 2.5x the rent in income verification is not enough.”
“I don’t want to rent to them because you didn’t tell me they have kids.”
“What religion are they?”
Sadly, we hear these objections from Landlords (yes our clients!!!) EVERY DAY.
And what they don’t realize is not only are they breaking Fair Housing Laws, and setting themselves up for potential legal trouble, they are putting the management company in jeopardy as well.
What Are Fair Housing Laws?
Fair Housing laws protect individuals during the sale, or rental, and financing of a dwelling based on their familial status, sex, race, religion, color and nation of origin. This means that landlords can’t purposely choose who they don’t want to rent to. In today’s world, that’s more than just skin color or race, it includes gender, familial status. In addition to these laws, there is the American Disabilities Act that protects prospects with certain physical and psychological dependencies as well.
What Happens When Fair Housing Laws Are Violated?
When Fair Housing Laws are violated a landlord may face a lawsuit from the tenant claiming that they have been discriminated against, or worse, they could face a Fair Housing violation from the U.S. Department of Housing and Urban Development (HUD) via the state attorney general.
Some of the other penalties a landlord could face include:
- Pay a penalty to the Government up to $16,000
- Pay the prospect for their emotional distress, humiliation, and suffering
- Take Fair Housing Training.
- Pay punitive damages.
And most parties elect to hire an attorney (which cost money) to represent them during the HUD investigation and if necessary hearing.
Avoid Fair Housing Discrimination
The easiest way to stop “playing with fire” as a landlord is to avoid Fair Housing Discrimination by sticking with a basic screening plan that relies only on tangible items. GoldenWest, for example, lays out a basic initial approval diagram: Credit score of 685 or better; Verifiable income of 2.5x the monthly rent; No felonies with current probation or parole; 1 year of last 2, verifiable rental history (or home ownership with no latest in last 2 years).
This would be an example of an “A” rated Tenant. Anything that deviates from here, the Landlord would then have to make a decision based on the overall factors, but a Tenant that does not meet these initial characteristics would not be given automatic approval. If you use this same rubric EVERY time, then you exponentially decrease your risk of being accused of committing of discrimination.
If you don’t have the time to study Fair Housing Laws or understand the importance of an in-depth screening process, you have to hire a qualified property management professional…and more importantly, you have to know and trust that they are following these procedures to both protect your investment and prevent frivolous lawsuits.
To learn more about the property management services we can offer you contact GoldenWest Management, Inc. today by calling us at (866) 585-5303 or click here to connect with us online.