Fair Housing

Fair Housing Act (FHA) Overview

The federal Fair Housing Act (FHA) prohibits discrimination in the sale, rental and financing of housing on the basis of race, color, national origin, religion, sex, disability and the presence of children.Specifically the act outlaws:

    • Refusal to rent or sell a dwelling to any person based on race, color, sex, religion, familial status or disability.
    • Discrimination in the terms, conditions, negotiation or privileges of rental or sale of a dwelling based on race, color, sex, religion, familial status or disability.
    • Advertising the rental or sale of a dwelling indicating preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status, disability or national origin. (This prohibition also applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act.)
    • Intimidating, coercing, threatening, or interfering with a person’s right of enjoyment of habitation or exercise of housing rights based on race, religion, color, sex, familial status, disability or national origin—or retaliating, in any way, against a person or organization that supports the exercise of fair housing rights or aids in the enforcement of the Fair Housing Act.

There are two types of discrimination under the federal Fair Housing Act: Disparate Treatment and Disparate Impact.

  • Disparate Treatment is when a housing provider treats an individual in a protected class differently than an individual not in a protected class.
  • Disparate Impact is when a rule, policy or procedure has a disproportionately negative impact on individuals in a protected class.

Penalities for violating the Fair Housing Act

Violations of the Fair Housing Act (FHA) can lead to expensive fines and civil penalties. There are two kinds of penalities landlords may be charged who violate Fair Housing Laws: Administrative Civil Penalities/Fines and Compensatory Civil Penalties. The U.S. Department of Housing and Urban Development (HUD) has published new inflation-adjusted administrative civil penalty amounts for landlords and housing providers who have been found to have violated housing-related laws under the FHA. Under these revised amounts, housing providers can be assessed:

  • $20,111 for a first time offense;
  • $50,276 for a second offense (within a 5 year period);
  • and $100,554 for a third offense (within a 7 year period).

View the Federal Register announcement of the new civil penalty limits for Fair Housing Act violations.

In addition to the penalities listed above, housing providers may also face compensatory civil penalties (damages and suffering) and punitive damages. Compensatory civil damages result from civil awards to plaintiffs in fair housing discrimination cases and can range from $1,000 to $500,000. Punitive damages may be assessed in rare cases to make an example out of violators to prevent future discrimination.

Fair Housing Act enforcement

At the federal level, the Fair Housing Act (FHA) is enforced by HUD (the Department of Housing and Urban Development). There are various state agencies (i.e. Antidiscrimination and Labor Division) that work with HUD on a local level to enforce the FHA.

The Act is enforced in two ways:

  1. Fair Housing Testers – HUD and local antidiscrimination advocacy groups hire individuals (“testers”) to pose as prospective renters or home buyers to see if housing providers are employing discriminatory practices. You need to be careful what you say in person, on the phone and in any written communications.
  2. Investigate Discrimination ClaimsIndividuals who feel they’ve been unfairly treated or discriminated against under the Fair Housing Act can file a discrimination claim directly with HUD or through a state or local antidiscrimination agency. The claim will be investigated by HUD to determine its merit and decide if further legal action is appropriate.

Fair Housing Law exemptions

While the Fair Housing Act covers most housing, in some circumstances, certain groups may be exempt. The Act exempts:

  • Owner-occupied dwellings with four or less units;
  • single-family housing sold or rented without the use of a broker or agent;
  • religious organizations leasing a property for non-commercial purpose (42 U.S. Code § 3607(a))
  • senior housing where 100% of the community is 62 years or older; or 80% of households have at least one resident 55 years or older;
  • and housing operated by private organizations that limit occupancy to members.

No housing is exempt from sectoin 804(c) of the Act, which states that it is illegal to print or publish any discriminatory statement. Any exempt housing which violates this statute of the Act looses its exemption under the Act. Individuals with a real estate license or an incorporated real estate business are never exempt from Fair Housing Laws.

Protections for individuals with disabilities

Individuals with disabilities are a protected class under the Fair Housing Act with special rights and priviledges. In 2017, there were over 16,440 formal complaints filed due to violation of FHA law based on disability (2018 Fair Housing Trends Report). Income property owners and managers need to be aware of legal requirements for addressing the special needs of individuals with disabilities to avoid legal repercussions.

Definition of Disability

Under federal law a person with a disability is defined as “Any person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such impairment; or is regarded as having such an impairment.” Examples of disability may include either mental or physical impairment such as hearing loss, restricted mobility, visual impairment, chronic mental illness, chronic alcoholism, AIDS, AIDS Related Complex, and mental retardation that substantially limits one or more major life activities.

The Fair Housing Act requires housing providers

Reasonable accomodation—as defined by the Fair Housing Act—is a change in rules, policies, practices, or services in order to provide a person with a disability an equal opportunity to use and enjoy a dwelling. A housing provider is required to do everything reasonably possible to assist a person with disability, but is not required to make changes that would create undue financial or administrative burden. Housing providers are required to make reasonable accommodations for persons with disabilities at all stages of the housing process, including application, tenancy, or to prevent eviction.

Example: A housing provider would make a reasonable accommodation for a tenant with emotional impairment by fulfilling the tenant’s request to keep an emotional support animal.

Example: A housing provider would make a reasonable accommodation for a tenant with mobility impairment by fulfilling the tenant’s request for a reserved parking space near the entrance to their unit—even though the housing provider does not typically provide reserved parking.

The cost of making reasonable accomodations per request of a disabled tenant are borne by the housing provider. For example, a landlord or property manager cannot charge an extra “pet” fee or deposit to a disabled tenant who owns an emotional support animal.

Reasonable modification under the Fair Housing Act

Under the Fair housing Act, a person with a disability may also request a reasonable modification to an existing premise in order to provide such a person the full enjoyment of the premise. Such modification can include structural changes to the exterior or interior of a dwelling as well as common areas.

For conventional communities, the housing provider is typically responsible for paying the cost of a reasonable accomodation (change in policy or procedure) made at the request of a person with a disability. However, a tenant with a disability is responsible for paying any cost related to the requested modification of his or her unit or a common area. In practice, however, the housing provider with often agree to some sort of cost sharing arrangement with a disabled tenant as part of the interactive process expected under the Fair Housing Act (FHA).

Under both the FHA and Section 504 of the Rehabilitation Act of 1973, a housing provider that receives federal financial assistance is required to make and pay for reasonable structural changes or modifications to a unit or common area at the request of a tenant with a disability.

Any request for accomodation or modification by a person with a disability should be taken seriously and addressed in a timely manner. Failing to respond to such a request, or any undue delay in responding, may lead to a tenant filing a housing discrimination complaint and probable cause finding against the housing provider.

Since reasonable accomodation/modification requests compose a relatively high number of discrimination claims each year, you should consult with an attorney before denying a request made on the basis of disability.

Federal Fair Housing laws when screening tentants

There are several things landlords and property managers should do to protect themselves and stay within the law when screening prospective tenants.

  • Develop a formal, written rental policy that will be applied to all housing applicants and tenants. The policy should include an availability policy, occupancy guidelines, rental criteria, and an outline of the application process.
  • Be careful what you say when screening prospective tenants. What may seem like a harmless question such as, “Are you married?” or “Where are you from?” could be contrued as discriminatory—especially by a prospective tenant whose application for tenancy you end up rejecting.
  • Make sure all rules are general, consistent and non-discriminatory—especially if you own or manage apartments. Rules should apply to all tenants, and never to one specific group. Employ general terms such as “residents” as this doesn’t refer to one specific group and clearly is intended for all dwelling occupants.
  • In addition to the federal Fair Housing Act, each state has it’s own set of fair housing laws. When developing your screening process, you’ll want to make sure you’re in compliance on both the federal and state levels.

Tips to avoid being accused of housing discrimination

The following tips will help you avoid being accused of housing discrimination and keep you out of legal hot water.

  • With respect to tenant screening and property management, assume that everyone you speak with works for HUD and could potentially accuse you of discrimination. Be extremely careful what you say in person, on the phone, via text message or email and in your rental ads.
  • Adhere strictly to the terms of the Fair Housing Act, but you can screen and rule out prospective tenants based on other criteria. You can legally deny housing to an applicant based on poor credit, inability to pay rent or other information obtained through an authorized credit check or background search.
  • Always be consistent in screening prospective tenants. It’s imperative that you apply the same qualifying standards to each housing applicant. Every housing applicant should go through the exact same screening process. Require the same information, documents, references and fees with every new application. Any variation could result in a discrimination claim. The same holds true for current tenants. Do not set different terms for a rental for one tenant over another—either before or during a lease. You must treat all tenants equally.
  • Never lie and say a dwelling is unavailable. You must allow every prospective tenant to go through the established rental application process.
  • Keep complete and accurate records. Even property owners and managers who are committed to fair housing can find themselves on the other side of fair housing claim. The best defense against any allegation of unfair housing practices or discrimination is complete and accurate records.

Setting nondiscriminatory apartment policies and rules

As a landlord or property manager you have the right to implement policies and rules to protect your investment in your property and to create a safe and comfortable environment for your tenants, as long as the policies and rules do not have an unintended disparate impact on state or federal protected classes under the Fair Housing Act. Whichever policies and rules you choose to implement, they must be standard across all tenants.

Never make rules or policies that single out any one group or type of resident. For example, a policy forbidding children from swimming in the pool or riding bikes on the premises would be a violation of the Fair Housing Act as it singles out a protected class-families with children. For example, instead of creating a rule that says, “Children at the pool must be accompanied by a parent of guardian”, you might say “Inexperienced swimmers must be supervised.”

Maximum occupancy

The Fair Housing Act does not expressing prohibit limits on dwelling occupancy. However, some occupancy standards that limit maximum occupancy can have a discriminatory effect. Consequently, you should be very careful when creating policies that create maximum occupancy limits for your rental.

Occupancy language in rental policies should never specifically limit the number of children. Occupancy language should refer to “persons”. Infants under 1 year of age should not be counted as an occupant.

Make sure you’re familiar with local and state laws regarding maximum occupancy, as they relate to square footage, unit configuration and bedroom size. It’s best to base occupancy limits on an accepted standard such as the Keating Memorandum, a national occupancy guideline issued by HUD (63 Fed. Reg. 70,255), or the Building Officials and Code Administrators (BOCA) code.

  • Keating Memorandum: Two persons per bedroom, subject to some exceptions and limitations
  • BOCA Code:
  • 150 square feet for the first occupant
  • 100 square feet for each additional occupant
  • Every room occupied for sleeping purposes by one occupant must contain at least 70 square feet of floor space or at least 50 square feet per person if occupied by more than one person

Whether you used the Keating Memorandum, BOCA Code or other methodology, be sure to standardize and document your occupancy policy, and make sure it’s in line with state and local regulations.

Fair Housing Act Updates

Interpretation and application of fair housing law continue to evolve as does the definition of discrimination. As such, it’s important to stay up-to-date on changes in federal fair housing law, statutes, interpretation and application.

The following are the most recent Fair Housing updates and news you need to be aware of as an income property owner or property manager. We invite you to check back periodically as we update this section regularly.

  • Criminal record screening The Department of Housing and Urban Development (HUD) has announced new guidance explaining how criminal background checks on housing applicants may have disparate impact on people of color since people of color are more likely to be charged with drug-related crimes and hence have a higher incarceration rate than white people. Landlords and property managers should now avoid using arrest records and one-strike prohibitions in their tenant screening process. Landlords and property managers should instead consider the “nature, severity and recency” of any criminal offenses and convictions and focus on crimes that pose real danger to the safety and health of other tenants. Property managers should employ consistent and objective criteria for individual assessments.
  • Limited English proficiency Any form of language discrimination may be classified, under the FHA, as discrimination based on race or national origin. According to HUD, any discrimination against persons with limited English proficiency (LEP) may violate the FHA. Refusing to allow time to translate housing documents—including applications, notices and contracts—may result in disparate discrimination leading to fines and civil action by housing applicants. Landlords and managers should be consistent in the application of screening and tenancy policies to remain on the right side of the law.
  • Source of income – Discrimination based on source of income is now prohibited in many states and cities. For example, in some localities, landlords can no longer refuse to rent to a prospective tenant because a substantial amount of their income comes from alimony, rental assitance, welfare or government subsidies. Even if state or local law does not specify source of income as a basis of rental discrimination, landlords would be wise to avoid using source of income in their screening process to avoid unecessary legal action.
  • Familial status – Unless your rental property qualifies as “housing for older persons”, you cannot refuse rent to any family because they have children. Neither can you direct or “steer” families with children to specific units that you believe to be more “kid-friendly”. Even if a housing provider has the best interest of the tenant in mind, steering a housing applicant or tenant due to familial status is unlawful and can result in fines, claims and civil penalties.

State and local Fair Housing laws

Most states have additional protected classes, such as sexual orientation, gender identity, source of income, age, political affiliation and student status. It’s important to adhere to all federal Fair Housing laws but just as important to follow Fair Housing laws on a state and local level. Failing to adhere to state and local statutes of the Fair Housing Act can lead to civil penalities, fines and prosecution.

State laws also address practical matters such as lease terms and conditions, eviction guidelines and statutes, rent payment and collection, security deposits, management of rental income, and the rights and and responsibilities of tenants and landlords. Learn more about landlord-tenant laws in your state.

Fair housing laws vary from state to state, so you may want to consult with an attorney to determine if there are additional anti-discrimination provisions governing rentals in your community.