A Landlord’s Quick Guide to the Fair Housing Act

The Fair Housing Act helps ensure that everyone has the right to equal treatment when applying for housing. As a landlord, it is especially important that you are aware of the law and what it means. The Fair Housing Act comes into play when you are interacting with prospective and current renters as well as when you are creating rental advertisements. If you are part of a protected class, the Act can even protect you when you are buying a property that you plan to rent. Here’s what every landlord needs to know.

What is the Fair Housing Act?

The federal Fair Housing Act of 1968 is actually a component of the Civil Rights Act of 1968. This third major civil rights law passed in that decade followed the Civil Rights Act of 1964, outlawing discrimination and Jim Crow segregation in of public places, schools, and employment, and the Voting Rights Act of 1965, outlawing racial discrimination in voting. The law aims to limit discriminatory practices related to renters, landlords, and housing overall; Congress established it a week after Martin Luther King Jr.’s assassination.

The Fair Housing Act of 1968 prohibits housing discrimination based on race, religion, national origin, or sex. Congress expanded the law by passing the Fair Housing Amendments Act in 1988, prohibiting housing discrimination based on family status or disability as well.

Protections Included in the Fair Housing Act

As described by the United States Department of Housing and Urban Development (HUD), the U.S. Fair Housing Act protects individuals from housing discrimination when they are:

• Renting a home
• Buying a home
• Obtaining a mortgage
• Seeking housing assistance
• Engaging in other activities related to housing

The law prohibits discrimination due to:

• Color
• Disability
• Family status (such as children under 18 years old and pregnant women)
• National origin
• Race
• Religion
• Sex

The act covers most types of housing. Some limited circumstances for exemptions exist. Exemptions may apply for:

• Buildings with no more than four units, when the property owner also lives in the building
• Single-family houses that the owner sells or rents without using an agent
• Housing operated by private clubs or religious organizations that limit housing occupancy to their members

How the Fair Housing Act Works

The Fair Housing Act takes a three-part approach to combating discrimination against any of the protect classes listed above, covering home renting and selling, mortgage lending, and other activities. As a landlord, you need to be aware of all components. This is important so you do not discriminate against potential renters, but also so you understand protections that apply to you when seeking a mortgage for an investment property to rent out if you are in a protected class.

Landlords cannot do any of the following when renting or selling houses or apartments:

• Block bust, which means convincing property owners to sell at a low cost due to fear of religious, racial, or other minority groups moving to the area
• Create different terms or conditions for different classes when renting or selling
• Deny housing
• Deny participation in services related to the housing, like multiple listing services
• Make housing unavailable and/or lie about the availability of that housing
• Provide different amenities or accommodations to different groups
• Refuse to rent or sell housing
• Refuse to negotiate for housing

Prohibited mortgage lending practices include: 

• Creating different conditions or terms of a loan, like fees or interest rates
• Creating different requirements for buying a loan
• Refusing to make loan information available
• Refusing to make or to purchase mortgage loans
• Using discriminatory practices when appraising property

Other illegal activities can include:

• Indicating a preference for a specific background and/or excluding a protected class or classes when advertising a property, or making discriminatory statements. Note that this restriction still applies even if you are otherwise exempt from the regulations of the act, such as if you are the owner of and reside in a home with four or fewer units.
• Interfering with or threatening someone who has fair housing rights.

How is the Fair Housing Act enforced?

The responsibility of enforcing the Fair Housing Act falls to the Department of Housing and Urban Development. The department enforces the regulations by using fair housing testers and by investigating discrimination claims.

• Fair Housing Testers: The Department of Housing will hire people to pose as prospective property buyers or renters to see if the landlords they interact with are using discriminatory practices. That means you should always be careful about what you’re saying both in person and on the phone as well as in your ads for rentals.

• Investigating Discrimination Claims: If someone believes a landlord has violated their fair housing rights, they can file a discrimination complaint. The Department of Housing will then investigate the claim to decide if they need to take further legal action.

How can landlords avoid being accused of discrimination?

You want to treat everyone with dignity and respect. However, even with the best intentions, it’s possible to inadvertently violate the Fair Housing Act. Assume that any prospective renter is working for The Department of Housing to make sure you stay in compliance. Practical tips to keep in mind include:

• Making sure you’re consistent when screening potential renters
• Having the same qualifying standards for every renter
• Following the same exact practices for every prospective renter applying for your property
• Requiring the same documents, fees, referrals, and other information from every prospective renter

There are certain ways you can legally rule out prospective renters, without violating the Fair Housing Act. For example, you can deny a renter housing legally based on:

• Inability to pay the rent
• Poor credit
• Other information you find when running a credit check

Understanding the Fair Housing Act is a huge part of renting out a property. You don’t want to inadvertently run into legal trouble, so make sure you remain in compliance when you are interacting with prospective renters and advertising your property for rent. Doing so will lay the foundation for a positive, respectful relationship with your renters as well.