Property Management Best Practices
Fair Housing Compliance Checklist for Property Managers: Avoid Costly Mistakes
Zac Maurais
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Fair Housing compliance is essential for property managers to avoid fines, lawsuits, and reputation damage. Here's a quick guide to stay compliant:
Penalties for violations can include fines up to $150,000, lawsuits, and compensation for victims. Regular audits and updates to processes are key to staying compliant. Start building fair and consistent systems today to protect your business.
The Fair Housing Act of 1968 requires that housing decisions are made based on clear, objective criteria, ensuring fairness in the process [1].
Here are the key obligations under the Act:
These rules are designed to protect specific groups, as outlined below.
The Act prohibits discrimination based on race, color, national origin, religion, sex (including gender identity and sexual orientation), familial status, and disability [5]. Additionally, many states have introduced extra protections.
Below is a breakdown of federally protected classes and common state-level additions:
| Protected Class | Federal Protection | State-Level Additions |
|---|---|---|
| Race | Yes | Yes |
| Color | Yes | Yes |
| National Origin | Yes | Yes |
| Religion | Yes | Yes |
| Sex (including gender identity and sexual orientation) | Yes | Yes |
| Familial Status | Yes | Yes |
| Disability | Yes | Yes |
| Age | No | Yes (49 states) |
| Marital Status | No | Yes |
| Military Status | No | Yes (varies by state) |
| Lawful Source of Income | No | Yes (varies by state) |
For instance, New York State extends protections to include age, marital status, military status, and lawful sources of income [6]. Property managers must follow both federal and state laws, adhering to the stricter standard when discrepancies arise.
Non-compliance with the Act can lead to severe consequences. Fines can range from $23,011 for a first offense to $115,054 for a third offense, with the Department of Justice able to impose civil penalties up to $150,000 [7]. In 2020 alone, 28,712 housing discrimination complaints were filed across the country [8].
Penalties may also include compensating victims, covering attorney fees, and requiring remedial training for violators. As the Fair Housing Center warns:
"Applying blanket prohibitions against applicants with any criminal history could land you in hot water and lead to a discrimination claim" [3].
Focus on describing the physical features of the property and avoid any language that could suggest tenant preferences. According to the Department of Housing and Urban Development (HUD), even small wording choices can potentially violate Fair Housing laws [9].
Here are some examples of phrases to avoid and better alternatives:
| Category | Avoid These Phrases | Use Instead |
|---|---|---|
| Family Status | "Perfect for young professionals", "No children" | "2-bedroom apartment", "Quiet neighborhood" |
| Accessibility | "No wheelchairs" | "First-floor unit" |
| Religion | "Near church", "Christian community" | "Close to places of worship", "Welcoming community" |
| National Origin | "English speakers only", "American family home" | "Language assistance available", "Classic family home" |
Stick to highlighting physical features, nearby amenities, building services, and rental terms. This ensures your listings remain neutral and compliant with Fair Housing guidelines.
Fairness in advertising goes beyond property listings - it applies to all marketing efforts. HUD guidelines emphasize the importance of using inclusive language and imagery that does not suggest preferences for certain residents.
Key requirements for compliance:
For properties with religious names, HUD recommends including a disclaimer like this:
"[Property Name] does not discriminate based on familial status, sex, disability, religion, color, race, or national origin" [10].
When marketing digitally, prioritize inclusivity by:
To stay compliant, property managers should review and update marketing materials monthly or whenever significant changes occur [11]. Regular audits are a proactive way to minimize risks and ensure adherence to Fair Housing standards.
Follow these rental criteria to ensure a consistent screening process:
| Screening Component | Required Documentation | Verification Method |
|---|---|---|
| Income | Pay stubs, W-2s, bank statements | Employer contact |
| Credit History | Credit report authorization | Credit bureau check |
| Rental History | Previous addresses, landlord contacts | Landlord verification |
| Employment | Current employer details | Employer verification |
| Background Check | Signed consent form | Third-party screening |
Make sure to clearly present these requirements upfront to avoid misunderstandings and maintain consistency in evaluations [13]. Once these are in place, shift your attention to conducting fair and thorough background checks.
Data shows that arrest rates are not evenly distributed across demographics, particularly impacting people of color [3]. Because of this, it's crucial to approach background checks with care and fairness.
Key steps to consider:
Be aware of local laws, as some areas limit the use of criminal history in rental decisions [3]. Keep detailed records of all findings to ensure compliance and transparency.
Maintaining detailed records for every applicant is critical to demonstrate fairness and compliance with housing regulations [12].
What to document:
These records not only prove adherence to Fair Housing laws but also provide protection against potential discrimination claims.
There are two main types of disability-related requests you should know about:
| Request Type | Definition | Who Pays | Examples |
|---|---|---|---|
| Reasonable Accommodation | Changes to rules, policies, or services | Housing Provider | Adjusted payment dates, reserved parking, assistance animals |
| Reasonable Modification | Structural changes to the property | Usually the Tenant | Installing grab bars, ramps, or wider doorways |
Housing providers cannot charge extra fees or deposits for these changes [15]. Each request must be reviewed carefully to ensure compliance with regulations while keeping property operations in mind.
When handling accommodation requests, follow these steps:
Here are some requests you might encounter:
Financial Adjustments:
Physical Adjustments:
If you need to deny a request, try to explore alternative solutions that meet the tenant’s needs while staying practical for property operations [15]. Always document your decisions and discussions to show compliance with Fair Housing rules.
Fair Housing compliance isn't just about creating policies - it requires ongoing staff training and regular reviews to ensure everything stays on track.
The Fair Housing Institute suggests training staff every two years, though yearly sessions are even better [16]. These sessions should cover:
Combine different formats, such as online courses, workshops, webinars, and team discussions, to keep training engaging. Once your team is trained, set up written guidelines to ensure everyone follows the same procedures.
Leverage digital tools to draft, store, and share clear policies and procedures. These should include:
Once your policies are in place, it's crucial to conduct regular reviews to ensure compliance.
"Proper compliance monitoring is essential for fair housing compliance and will save your company time and money by avoiding costly lawsuits." - The Fair Housing Institute, Inc. [18]
Here’s a suggested schedule for audits and reviews:
Use property management software to track compliance and monitor training progress. Learning Management Systems can also help you keep tabs on certifications and training completions [19]. Make sure to document all findings and any corrective actions taken.
The checklist above outlines practical steps to help you meet fair housing requirements. Ensuring equal housing opportunities while safeguarding your property management business from hefty fines means consistently applying fair housing practices.
Here’s what to focus on:
Keep Records and Train Your Team
Document everything - from screening criteria to verification processes - and ensure your team is trained regularly. Clear, consistent procedures are key to staying compliant in all areas of property management.
Stay Ahead with Regular Updates
Conduct frequent audits and update policies to align with changing regulations. Pay close attention to state-specific rules, like those in California, which go beyond federal guidelines.
"Fair housing laws are the cornerstone of equitable property management practices." - Soft Pull Solutions [1]
Fair housing compliance is an ongoing effort. Build strong systems, maintain thorough records, and create inclusive communities to avoid the risks of discriminatory practices [2].
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