In 1968, the Fair Housing Act was adopted by congress, and amended in 1988 to increase the role of enforcement for the department of Housing and Urban Development (HUD). One of the most important points for fair housing enforcement is the fact that discrimination against protected classes is prohibited for home sales, rental housing, and mortgage lending. For the purposes of HUD, protected classes include race, color, national origin, religion, familial status, or handicap.
When it comes to the sale and rental of housing, the Fair Housing Act requires that owners do not refuse to rent or sell, set different terms and conditions, provide different services or facilities, falsely deny that housing is available, persuade owners to rent or sell for personal profit, or deny access to facilities or services related to the sale or rental of housing for protected classes.
This protection also extends to mortgage lending, where you are prohibited from refusing to make a loan, provide information regarding loans, impose different terms, discriminate in appraising property, or refuse to purchase a loan because of a person’s status in a protected class. In addition to this, it is also illegal to threaten, coerce, or intimidate anyone exercising a fair housing right and advertise or make statements indicating a limitation or preference based on any of the protected classes. It is important to note that this prohibition against discriminatory advertising also applies to single family and owner occupied housing that is otherwise exempt from the Fair Housing Act.
Furthermore, if you have a physical or mental disability, your landlord may not refuse to make reasonable modifications to your dwelling or common use area, at your expense, if necessary for the disabled person to use the housing. Landlords are also prohibited from refusal to make reasonable accommodations in rules, policies, practices, or services if necessary for the disabled person to use the housing.
Ultimately, what the Fair Housing Act and its subsequent amendments come down to is that owners and landlords must treat people equally and make reasonable accommodations for individuals who are disabled. Practically speaking, this is something that most astute investors and landlords will be doing anyway. Treating people equally is an important part of ethically doing business, and making reasonable accommodations for people with disabilities is all part of serving your customers.
The link in the chain where many investors may be exposed to unknown risks can occur if you employ a property management firm to handle the rental and tenant screening for your property. Granted, most property management companies are highly ethical and would not engage in this type of discriminatory behavior. However, there are some companies with less than stellar ethical standards who do engage in these prohibited practices. As astute investors, it is our responsibility to ensure that our practices and the practices of people we employ to oversee our properties are fair and ethical.
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The Heroic Investing Team
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