Fair Housing Laws Rental Property Investors Should Be Aware Of

Fair Housing Laws Rental Property Investors Should Be Aware Of

February 20, 2017

One of the primary responsibilities of property management companies is ensuring that the investor-owner and their rental properties are compliant with all federal and state housing laws.  Unfortunately, there are a few of these laws that the investor overlooks yet should be aware of.  Property management firms are familiar with Fair Housing Laws such as the “prohibition of discrimination in the sale, rental, and financing of dwellings based on race, color, national origin, religion, sex, familial status or disability.”

However, there were a number of rules and regulations that were implemented over the past few years that real estate investors may not be aware of or familiar with.  Here is a summary of the two most important ones:

Civil Monetary Penalties Inflation Adjustment – First-time violators of Title VIII of the Civil Rights Act of 1968, also known as the Fair Housing Act, were fined $55,000 or the maximum civil penalty.  Thanks to inflation, that figure increased to $75,000.  The fine for subsequent violations was $110,000 and has been raised to $150,000.

Reasonable Accommodation for those with a disability – Although this is not a new rule, the definition of “reasonable accommodation” is rather broad.  Currently, the US Department of Housing and Urban Development or HUD defines “disability” as:

“Individuals with a physical or mental impairment that substantially limits life activities.”

Disabilities or impairments can include AIDS, cancer, chronic alcoholism, diabetes, drug addiction, hearing and visual impairments, heart disease, muscular dystrophy, mental illness, and so on.

As a rental property investor, one of the more important benefits of partnering with a property management company is the assurance that you will be compliant with all Fair Housing Laws.  In turn, this protects you against any costly and time-consuming legal issues.  Furthermore, the investor should not have to fear evicting an individual because they are afraid of being accused of violating any of the Fair Housing Laws.

According to a fairly recent report on “fair housing trends”, discrimination complaints have been steadily rising since 2010.  If you want to avoid being a target for these complaints, you should hire a property management company if you haven’t already.  Let your property management team handle the advertising of your properties.  They know what to focus on and what to avoid discussing.

Property management companies will be very precise when screening applicants.  This is an area where many landlords can get themselves into trouble because they don’t know what questions they can ask and which ones are taboo.  Consistency with the rules is a must and every tenant must be treated equally.  Finally, property management companies will be extremely detailed when it comes to evictions and follow the letter of the law so there are no legal issues for you to contend with. That is one of the benefits of hiring a property management company in the first place.  

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