The most underrated topic in buy and hold real estate investing is Fair Housing.  In fact, its staggering how many investors don’t bother learning much if anything about Fair Housing. I was flabbergasted when I read a recent thread on a national FB group for landlords where half a dozen people were commenting that Fair Housing only applies to applications…once the person moves in it didn’t apply.  What the….. Are you serious? Let’s get this out of the way: Fair Housing Always Applies. Every. Stage. Of. Tenancy.

But let’s start at the beginning of the tenant process because most Fair Housing violations occur prior to the tenant moving in. Our first interaction with potential renters is usually a written ad.  This is where problems can quickly begin, even if we didn’t intend it. Remember: With Fair Housing violations, your intent doesn’t matter.  

In Fair Housing we have federally protected classes, state protected classes and sometimes county and city protected classes.  As a refresher, here’s our protected classes down to the state level: Race, National Origin, Ancestry, Gender, Familial Status (including Marital), Sexual Orientation, Lawful Source of Income, Status as a victim of Domestic Abuse, Age, Color and Disability.  The language in our ads should avoid presenting the appearance of either appealing to OR detering anyone in those classes. An example of deterring a class would be the signs from the 1800s that said “Irish need not apply”. Having that line in your advertisement would certainly be grounds for Fair Housing violation.  Yet as we said it above it’s not just exclusionary statements that create trouble. Informing people in the ad that a Kosher deli is located on the bottom floor of the building can be seen as encouraging interest and even stating that the building is perfect for those of Jewish heritage. This would violate Fair Housing because it’s encouraging one group of people to be interested over another. 

Let’s Try Read An Ad

I pulled this ad from a FB group where it was screen captioned for discussion.  Using both federal and state protected classes, see how many violations you can pick out:

Spacious 2 bedroom upper duplex available for rent.  Fridge, stove, and microwave included. Off street parking and laundry in the basement.  (Laundry requires going outside in the cold and down 2 flights of stairs. Not ideal for those with mobility issues.) Located within walking distance of stores, Chinese food, and St. Patrick’s Catholic Cathedral. I don’t provide a/c so not ideal for the elderly since they need a/c.   Lower unit is occupied and there isn’t much noise dampening between the apartments. Energetic kids might cause problems between tenants. Rent is $905. Security deposit is one months rent or $1200 if you have kids. 

How many possible Fair Housing Violations did you find in the ad?  There were 6 immediate violations.   

What Went Wrong…

Laundry requires going outside in the cold and down 2 flights of stairs. Not ideal for those with mobility issues.  

While the landlord may have had good intentions of warning those with conditions that are aggravated by stairs or excessive movement, that is not how it will be interpreted by the HUD.  HUD will view it as they are discouraging a protected class from viewing the property. The decision of whether or not something constitutes a burden because of their physical ability should be up to the person.  

Located within walking distance of stores, Chinese food, and St. Patrick’s Catholic Cathedral.

This might appear innocuous because it’s a statement of the amenities located close to the unit.  However because it mentions a particular religion it can be construed as encouraging Catholics to apply and discouraging those of other faiths because it implies the neighborhood might be a Catholic neighborhood.  Also mentioning a restaurant based on its national cuisine is not a good choice. Even though its a type of food widely available in the U.S., it appears as though that one particular type of ethnic is food is being singled out.  

I don’t provide a/c so not ideal for the elderly.

This again may be well intended but it violates Fair Housing because it’s discouraging people of a certain age from seeing the unit.    

Energetic kids might cause problems between tenants. Security deposit is one month’s rent or $1200 if you have kids.  

These statements both violate the rights of those protected by familial status. The first statement is insinuating that the unit is best for well-behaved kids or families with no kids at all.  The second statement is a more clear violation. You cannot charge someone more security deposit simply based on their status in a protected class. 

How To Fix This…

So how could the landlord have written the ad and still provided all the same information? 

Spacious 2 bedroom upper duplex available for rent.  Fridge, stove, and microwave included. Off street parking and laundry in the basement.  (Laundry requires exiting the building and 2 flights of stairs.) Located within walking distance of stores, food, and a place of worship. A/C not provided.  Lower unit is occupied and there isn’t much noise dampening between the apartments. Please be conscientious of whether this may present an issue. Rent is $905.  Security deposit is one months rent.

They have still informed people about the laundry location, the lack of a/c, and the inadequate noise dampening between units as well as listing what’s local.  But they’ve avoided trigger words like “kids”, “Catholic”, “elderly”, and “Chinese”.  

It Doesn’t Take A Complaint

To have a discrimination case lodged against you doesn’t require a person to lodge a complaint, especially with advertisement wording.  HUD and state agencies can initiate action if the discrimination is visible. The ad above has visible violations of Fair Housing therefore HUD or other agencies could bring charges against the landlord.  So don’t think as long as no one complains that it won’t be an issue.