Choosing Tenants with Fair Housing in Mind

The old adages of following your heart and going with your gut may be great advice when it comes to picking a career path or making decisions in your love life, but if you lean towards these clichés for selecting a tenant, you could be setting yourself up for serious legal troubles when it comes to abiding by the Fair Housing Act.

What is Fair Housing?

The Fair Housing Act of 1968 is also known as Title VIII of the Civil Rights Act of 1968. Congress passed the act in an effort to impose a comprehensive solution to the problem of unlawful discrimination in housing. Its primary prohibition makes it illegal to refuse to rent to or negotiate with any person due to that person’s race, color, religion, sex, familial status, handicap, or national origin.

The Fair Housing Amendments Act of 1988 added extensive provisions that apply to discrimination against persons with disabilities and families with children 18 years of age and under. California law increases protected status to include sexual orientation and medical conditions.

Why Do I Need to Worry About it?

Fair Housing violations can be relatively easy to stumble into for the uninformed landlord and can carry hefty federal penalties and fines. Property owners who base their choice of a tenant on an “ I know it when I see it” mentality can unconsciously open themselves up to the accusation of bias, and with it, governmental scrutiny.

How Do I Rent With Fair Housing In Mind?

Luckily, the best practices that would preclude a Fair Housing violation are also the best practices to follow for the savvy businessman (or woman). Since FHA violations can include advertisements, it’s best to start out on the right foot and avoid any descriptions in advertisements that can be seen as catering to a particular section of the population that falls under the Act. For example, instead of saying that a unit is “great for families,” it would be advisable to switch the wording to say that it is located near playgrounds, schools, and parks. Even common phrases such as “his and hers closets” can potentially be discriminatory under the FHA and should be avoided.

After advertising, the next step of choosing a tenant often includes several tours and meetings with potential renters. At this stage, it’s important to be quantitatively objective in picking the best possible applicant from your renter pool, not only for Fair Housing but also for the health of your investment. While many Landlords feel the urge to choose tenants who may have things in common with themselves or fit a certain category they feel is better for their unit such as older, single renters or couples without children, these biases, both conscious and unconscious can run afoul of the law.

It is imperative to collect rental history, financial information, references, and background checks on any potential applicant to not only have peace of mind as a property owner but also to make sure that you have hard evidence of non-partisan screening to combat any potential allegations of bias. Having written criteria showing what you look for in a potential tenant can be valuable to this cause as well. Lastly, if you own several similar units it is important to keep organized records for each property.

Best Practices

It’s always advisable to write advertisements with the widest possible audience in mind and to screen tenants by looking for the most quantitatively qualified individual. Of course, it’s always easy to avoid these problems and potential lawsuits by having your unit professionally managed by a local company who is proficient and experienced in all local and federal laws. If you’re looking to take the easy route to finding and managing great tenants, contact MV Properties today at 888-686-1525 or keegan@mvprops.com and visit our website to learn more.

About Keegan

Keegan McNamara is the founder of MV Properties, a leading San Diego property management company offering the highest level of service in property management, maintenance, and leasing. His goal is to cultivate long-lasting relationships with his clients (property owners) and their tenants to provide an enjoyable leasing experience. Keegan holds a Masters in Business Administration from the Rady School of Management at UC San Diego and is a Principal at McNamara Ventures, a real estate development and investment company focused on residential and mixed-use properties.