The Fair Housing Act is the most well-known law dealing with discrimination in rental properties. The Act does not directly apply to all landlords, but these exemptions are quite narrow.
For example, an landlord may be exempt if they own a building with four or fewer units, but only if they reside in one of those units. Private, individual owners of single-family rental homes may be exempt so long as the landlord has three or fewer at any given time. Even then, the Act still covers rental advertising, and landlords who hire real estate brokers.
If a landlord does fall within the exceptions to the Fair Housing Act, that doesn’t mean they can discriminate against applicants or tenants.
The states, and even some cities, have passed their own anti-discrimination statutes modeled after the Fair Housing Act. Many times, these local laws are even more restrictive than the Fair Housing Act itself, and apply to virtually all local landlords.
Here’s something for a small landlord to consider: when an applicant or tenant feels they have been wronged, they do not try to figure out whether the landlord is exempt from the Fair Housing Act — they go to their local housing authority and file a complaint. If the federal act has been violated, that housing authority may alert HUD of the violation.
Regardless of whether the Fair Housing Act was violated or HUD becomes involved, the local housing authority has the right to investigate and prosecute local violations.
There is another consideration for small landlords concerning discrimination — it doesn’t make sound business sense.
Ignoring the social implications of discrimination and the risks of fines or lawsuits for a moment, the fact remains that choosing tenants based on a preferred class is not going to guarantee a good tenant. In fact, it may lure the landlord into a false sense of security. A landlord should view all applicants with enough skepticism to insist on a rigorous tenant background check to verify tenant-worthiness rather than relying on presumptions that may or may not describe the individual applicant.
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.