When the Selection of Tenants Crosses the Line of Legality

If you are a landlord, chances are you have dealt with a problem tenant at least at some point in time. For most landlords, late rent payments and minor damage issues are chalked up to the cost of doing business. But for others, collecting timely rental payments can mean the difference between the ability to cover monthly mortgage payments on the rental unit and going into default. For these landlords especially, carefully selecting tenants is of the upmost importance. But what happens when the selection process crosses the line from diligent to downright illegal?

The Fair Housing Act, Title VIII of the Civil Rights Act of 1968, is a federal law intended to protect tenants from landlord discrimination. It prohibits landlords from renting (or refusing to rent) to tenants based on race, color, religion, sex, national origin, disability, or familial status. While this sounds obvious to most, the details of the Fair Housing Act can be surprising to some.

For instance, say you own a multi-unit building where a current tenant works nights and often complains about excessive noise during the day, when he or she is trying to sleep. In an effort to keep this tenant happy, you publish an advertisement for the adjacent unit politely requesting “No young children, please.” Just by publishing this advertisement, you are in violation of the Fair Housing Act, since the ad purports to discriminate against potential renters based on their familial status. Even if you ultimately end up renting the apartment to someone with kids, the mere advertisement itself could subject you to claims and subsequent litigation.

Individuals who believe they have experienced housing discrimination can file a complaint with the United States Department of Housing and Urban Development’s (HUD) Office of Fair Housing and Equal Opportunity (FHEO). FHEO will conduct an investigation and, if warranted, may assess a fine of up to $16,000 against the landlord for a first time offense. Even if FHEO determines that cause does not exist to pursue a claim against that landlord, the purported victim of is not precluded from pursuing an independent claim, since the Fair Housing Act confers jurisdiction on the federal district courts.

While careful selection of tenants is key, a landlord must take care not to base any part of his or her selection process on race, color, religion, sex, national origin, disability, or familial status. This is true even if the landlord thinks he or she may have good cause or justifiable circumstances to use any of the foregoing as a basis for consideration.