National fair housing month: Follow these tips to avoid lawsuits

The federal government has dedicated the month of April to spreading awareness about fair housing in the United States, especially legislation like the Fair Housing Act. For property managers, understanding fair housing legislation is vital to ensure a smooth, fair and respectful tenant selection process that does not result in unwanted lawsuits. Choosing the right tenants (people who will respect your property and reside in it responsibly) must also be balanced with complete compliance with federal, state and local laws concerning discrimination.

A thorough understanding of fair housing legislation (both federal and state-specific) is important, whether you own a large property management company or simply manage a few rental properties on your own. The legal implications for discrimination are not nice, and you risk tremendous financial loss, as well as respect in the community, if you refuse someone housing for the wrong reasons.

A brief history of fair housing legislation

Current fair housing legislation began with the federal Fair Housing Act, Title VIII, in 1968, which prohibited discrimination in the sale or rental of housing based on race, color, religion or national origin. An amendment from 1974 prevents discrimination based on sex, and in 1988 the law was further amended to protect disabled persons and families with children, and it also introduced stiffer penalties for violators of the law.

Real estate practices covered by this legislation include your advertising pre-sale, the terms of your rental agreement or sale, and the actual denial of housing based on whatever reason.

Legal implications for discrimination

The legal implications for property owners charged with discrimination are grim and often financially serious. If a tenant has perceived discrimination in the buying or rental process, they can file a complaint with their state department of human rights. They may also contact an attorney. Tenant advocacy groups protect tenants too, and the last thing you want is to go to trial for perceived discrimination.

If found guilty of discrimination, you can potentially lose your real estate license and be required to pay substantial damages, settlements or attorney’s fees.

Having respect for all in real estate: Be aware and be informed

Nolo has an informative article on the types of housing discrimination prohibited by the Fair Housing Act. I’d recommend that all property managers read it. Here is some further advice for property managers on maintaining awareness about fair housing and discrimination:

• Be consistent in your meetings with prospective tenants. Having a standard set of questions you always ask and speaking with a polite, respectful tone will help you ensure that your standard of communication is always high. If you consistently strive to maintain a respectful tone in every screening, showing and phone call, you will do much to avoid unintentional discrimination or anything that could be perceived as unlawful.

• Decide on the level of accommodations you will employ across the board. Set a standard for yourself about the kinds of accommodations you make for tenants, and then follow it in every situation as best you can. You don’t want one tenant to accuse you of withholding advantages that you offer other tenants, or accusing you of favoritism or inconsistency.

• Stay away from preconceived notions or stereotypes. Always give prospective tenants the benefit of the doubt. Obviously if warning signs arise, take heed, but do not let peripheral factors or preconceived ideas about someone color your treatment of them, whether in the tenant screening process or once they have inhabited the property.

• Stay up-to-date on your state laws. A secure understanding of local legislation will protect you from unwanted legal action. Taking the initiative on this to educate yourself will pay off in the future.

Conducting your real estate business with respect and consistency will do much to ensure great interactions with prospective and current tenants. Awareness and education about what is expected of you legally as a property manager is the next step. For cultivating awareness about this whole issue, HUD’s new fair housing app on iTunes is a great start.