In the real estate world one mistake can wipe away years of hard work. Many landlords think responding to a tenant complaint is annoying but it is a walk in the park compared to facing litigation. Without even realizing it you could not be following fair housing rules and regulations. If the right tenant realizes this they may press forward with a lawsuit and they will probably win. Fair housing rules are heavily tilted towards tenants, and deservedly so. Tenants should not be discriminated on anything other than their ability to pay their rent and take care of your property. If you own a rental property, or are considering one, you need to know all the ins and outs of fair housing rules and guidelines. Here are five tips to help you stay compliant with fair housing rules.
- Do Your Homework. Most landlords are good people who know right and wrong. It is morally pretty cut and dry that you should not discriminate against a person based on their age, religion, ethnicity, marital status and host of other things. Well, not only is that morally correct but legally as well. Before you do anything with your rental property you need to take some time to familiarize yourself with fair housing laws. The best place to find a general overview of everything is on the HUD website. Most of the guidelines are fairly obvious but there are a few that can catch you off guard. Ignorance of the rule is not an excuse. In addition to national laws you should pop into your town hall and see if there are any town specific rules you need to follow. A few minutes of due diligence can save you hours of back and forth, lost rental and possible litigation down the road.
- Evaluate Any Print Advertisements. Think about how you advertise to find tenants. It is very rare that you will find a tenant through word of mouth or previous tenant referral. In most cases, you will have to put something in print either online or in a newspaper. It is important to take a minute to make sure your ad is compliant with fair housing. It is ok to state that you don’t want pets or smoking in the property but it is not ok to say you don’t want kids or young couples. Even if you have had a bad rental experience with them in the past you need to wipe the slate clean with any new tenant. If you are not sure about the wording of your ad you should have your real estate attorney give it a look. Something that may seem innocent to you could get you in a boatload of trouble.
- Follow The Same Tenant Questionnaire Every Time. When you start receiving calls from prospective tenants you need to put them all through the same evaluation. It is a good idea to develop a mini application or questionnaire for every incoming call. You don’t have to read each question line by line but you should ask the same handful of questions on every call. By doing this not only do you treat every tenant the same but there is no misunderstanding your intent. As is the case with your print advertising it is a good idea to have your attorney review the questions just to make sure they are compliant. Without even knowing it you may ask a question that can come back to haunt you. Asking someone if they have a spouse or what school their kids attend may seem innocent enough but if they get turned down for another reason they may see this as discrimination. You should ask every tenant that calls the same six or seven questions or direct them to an online application before doing anything else.
- Watch What You Say. After going through your initial application, the next step is to see the property. When you meet with the prospective tenant you should answer only questions about the property. Keep your personal feelings on the neighborhood, politics and even your favorite sports team to yourself. Anything that you say or your tenant says could potentially be discrimination. By saying that your tenant may like a certain area better it is a form of steering that could land you in hot water. As crazy as it sounds if your tenant says they are in favor of a certain political party that is opposite of a sign you may have on your lawn it could be a problem. Always be polite and engaging with everyone but remember that everything you say and do can come back to haunt you if you are not careful.
- Track Every Showing/Application. Think about the feeling you would have if you received a litigation letter weeks after showing the property to someone. You would be caught off guard and blind sighted. You may not even remember the tenant or how you ended up with them. That is why it is best to track every single phone call and application. At the bottom of the page you should have an area to write the reason the application was not accepted. This could be anything from job history to credit score to lack of security deposit. Whatever the reason you should note and even call your tenant to let them know. The more documentation you have the easier it will be if you a rejected tenant tries to attack you.
You truly never know what type of tenant you have until they are in your property. Always keep an open mind with every tenant and follow fair housing rules at all times.
