Equal housing laws state that everyone deserves to be considered for safe housing equally. The Federal Fair Housing Act lays out things you cannot discriminate against a potential tenant for, as well as consequences if you do.
As a landlord, it's easy to feel like you need a law degree to understand this process. You don't, but having an attorney look over your screening process isn't a bad idea.
Since you don't have time in your busy schedule to go to law school, we're breaking down the equal housing act, below.
History of the Fair Housing Act
Have you ever heard the term "redlining" referring to the housing or real estate industry? Some people use it more generally these days, but it has a very specific history.
Banks and investment firms used to have maps that broke the city down into colored areas. The areas were supposed to represent good and risky investments. However, they ended up ranking all areas where people of color lived as red areas, surrounded by redlines.
If you were trying to invest in a property that was in or near a red line, you wouldn't get the loan you were asking for.
The Fair Housing Act was a follow-up to the Civil Rights Act of 1968, which aimed to stop history from repeating itself ever again.
What Does the Equal Housing Act State?
Essentially, the law says that all people should have an equal chance to be considered for a rental property or a home. There are exceptions (like criminal backgrounds), but otherwise, you need to abide by these principles.
According to the housing act, you cannot discriminate against someone because of their:
- Family status
- Skin tone
- Sex or Gender
Those are the federal statutes. States and local governments may protect more factors. Pennsylvania statute protects tenants against discrimination against the factors above. The state law lists fair housing factors as "race, color, religious creed, ancestry, age, sex, pregnancy/childbirth, national origin, familial status, and disability."
It's essential to have a well-thought-out screening process that avoids discrimination. If you don't feel comfortable creating one on your own, hire a property management company that handles tenant screenings for you.
What are The Consequences for Landlords?
If you're accused of discriminating against a potential buyer/renter, your case will go to court. If the court finds you guilty, it will be of either "Intentional or Unintentional Discrimination."
Intentional discrimination has harsher consequences than unintentional charges do. If you're found guilty in a court of law, there is a maximum penalty of $21,000 for your first offense.
Your Best Way Forward
In light of the complications with these equal housing laws, it's best to work with a property management company that has experience with equal opportunity housing. A high-quality firm will have made sure their process is air-tight and lawyer approved, to avoid any charges against equal housing opportunity apartment applications.
You have enough to deal with as a real estate investor or landlord. Let us handle your tenants. Click here to get help.