In real estate renting business, knowing (and understanding) Fair Housing Act is crucial. Also known as the Title VIII of 1968 Civil Rights Act, this federal law was enacted in 1968 to prevent discrimination.
The house financing, rental, sale, or purchase (whether it’s public and private) can’t be based on nationality, skin color, religion, sex, or race. This statute has been revised several times, including the one in 1988, to add family status and disability.
About Fair Housing Act
Although housing discrimination exists, it can be complicated and difficult to prove. If you decide to take the issue to the court, you need extra patience and also proper documentation to win the (legal) case.
This Act prohibits discrimination against home buyers and renters by lenders, sellers, or landlords based on their religion, nationality, race, family status, disability, color, and sexual orientation status.
It is enforced by Department of HUB (Housing and Urban Development) within the federal level. The state laws are able to enhance the protections under the Act, but they can’t really reduce them.
Some of the General Examples
These actions are considered the illegal discriminations under the law, and here are some of the examples:
- The rental agent doesn’t want to rent an apartment to single women having children.
- A landlord claims that an apartment is available during a phone call, but when the caller comes and it turns out to be a Hispanic or an African-American person, he/she says that someone else has already rented the apartment. But when another person calls (especially from another race), he/she says that it’s available again.
- A mortgage lender sets a higher interest rate for those wanting to buy a house in a Latin neighborhood than those in white neighborhood. Or he/she can steer the borrowers with not-so-much favorable terms due to their nationality, race, or sex
- An agent doesn’t want to show a property (or a house) within a certain neighborhood because of the buyers’ ethnicity, religion, or race.
- A modern (and multifamily) condo doesn’t follow accessibility requirements because it can’t provide wheelchair access for the buyers on wheelchair.
Fair Housing Act Enforcement
Who enforces the Fair Housing Act? HUD has the jurisdiction over the enforcement. They have their own agency, the Office of FHEO (or Fair Housing and Equal Opportunity), which is dedicated for the law provision.
They are also responsible for eliminating housing discrimination and promoting housing rights (in housing).
The way FHEO enforces these policies and laws are done in these actions:
- Performing the compliance reviews
- Investigating any complain related to fair housing
- Overseeing the fair housing grants
- Hiring undercover people to apply for the housing
In the event HUD finds a discrimination case and they also find the probable cause, they would file a charge with the Administrative Law Judges (in HUD).
All the involved parties have around 20 days to determine if they want to take this case to the federal district court or they want this judge to rule it. in the event the case continues to trial, the Department of Justice would represent the complainant and also the government.
How to Avoid Discrimination Accusation
If you are the landlord and you don’t want to be accused of doing any act of discrimination, then you need to be fair and honest. Aside from screening the applicants quite fairly, you can do these things:
- Have a screening process that comes with transparent and standard application, and it should apply the same (for all of your tenants)
- Check the local and state Fair Housing laws to make sure that you comply with those – aside the ones of federal laws
- Make the decision (to sell or rent) to strictly on factors that determine their ability to pay the mortgage or rent. These factors typically include credit history, credit score, income documentation, and referrals.
- You can ‘delegate’ the task to property management company to screen, sort, and pick the tenants.
If you suspect yourself being the ‘victim’ of housing discrimination, you need to gather all kinds of proof and evidence, so it won’t be just about ‘your words against theirs’. As it was mentioned before, proving such unequal treatment can be difficult although they exist.
All property owners need to know about their rights (Lease Agreement Rights, included) as well as their obligations. The Fair House Act is designed to provide equal opportunity for everyone regardless their differences.
Well, we hope that information about Fair House Act above can inspire you, especially for those who first time wan to invest in a real estate or similar properties.