Avoid Practicing Illegal Steering at Your Rental Property

Learn how to avoid charges of illegal discrimination when showing rental units to prospective tenants.

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“Steering” is an industry term that every residential landlord should know as part of an effort to treat prospects fairly and avoid liability for housing discrimination. It refers to a set of situations in which a landlord tries to guide tenants to certain parts of a building or discourage them from renting there at all, based on a discriminatory reason. Compared with turning away rental applicants altogether based on race, religion, disability or another protected class, steering is a subtle act. But it’s also an illegal practice that could lead to costly liability under the Fair Housing Act (FHA) (42 U.S. Code §§ 3601-3619 and 3631).

Why Is Steering Against the Law?

You might think that as long as you’re willing to rent to any type of tenant, you won’t violate the FHA. But the law is broad in the way it protects people against housing discrimination. Steering is considered a violation of the FHA because it interferes with a prospective tenant’s ability to make housing decisions.

If a tenant’s choices are artificially limited because of a protected class, it means the prospect must face obstacles the others don’t have when apartment hunting. As a result, the prospect’s search will likely be delayed as it becomes harder for her to find suitable housing at an affordable price.

How to Avoid Steering Tenants

The U.S. Department of Housing and Urban Development (HUD), which is charged with primary enforcement of the FHA, has issued regulations (24 CFR § 100.70) that outline four main types of illegal steering practices. As a landlord, it’s a good idea to familiarize yourself with what the government considers to be steering, as well as educate your manager and leasing staff about it. This way, you can be sure to avoid violations at your rental property.

Here’s what the regulations say you shouldn’t do, based on a protected class:

  1. Dont discourage prospects from renting at your property. There’s nothing wrong (and everything right) with listening to a prospective tenant’s housing requirements and then showing them rentals that fit their stated needs. For example, if an applicant tells you she’s interested in only ground-floor units, then you’re not engaging in steering if you only tell that prospect about available units on the ground floor of your buildings. Similarly, if your property doesn’t have a fitness center and you meet a tenant who tells you he’s looking for a building that offers one, then you’re not violating fair housing law by suggesting that he look elsewhere. You’ll risk steering accusations, however, if you try to convince someone to look elsewhere even though your property’s features appear to fall within the prospect’s search parameters.
  2. Dont discourage prospects by exaggerating drawbacks or not informing them about desirable features of the rental or neighborhood. Tenants expect that any landlords they meet will promote their properties by emphasizing positive aspects and downplaying ways in which features or amenities may be lacking. So, landlords who do the opposite may lead prospects to believe that they’re engaging in steering. If you don’t act enthusiastic with a tenant and neglect to point out features such as a newly renovated community room or a heated pool, or if you go a step further and highlight the reasons why you believe a prospect should look elsewhere, you should have a legitimate, nondiscriminatory reason for doing so. Otherwise, you could be flirting with a fair housing complaint.
  3. Dont suggest that prospects wouldn't feel comfortable or compatible with their neighbors. Landlords who express concern about how well tenants would fit in at their property could be asking for fair housing trouble, even with good intentions. If you discourage prospects from renting because you believe other tenants might not like or welcome them, you may quickly find yourself accused of steering. It’s always best to let prospects decide if they’ll feel comfortable living at any particular property.
  4. Dont assign prospects to a certain floor or section of the building. Rather than turn away prospects based on a protected class, many landlords impose their own limits when it comes to where different types of people may live at their property. But such attempts to assign tenants to certain parts of a building always amount to steering. For example, while it’s clear that a landlord can’t reject an applicant simply because he has children (since the FHA protects tenants based on “familial status”), it’s also true that a landlord can’t decide that all families with children must live near each other in one section of a building. This type of steering is a perfect example of how illegal discrimination isn't always obvious.

Learn More About Housing Discrimination

The Rental Applications and Tenant Screening section of Nolo.com includes several useful articles on how to legally choose tenants and avoid fair housing complaints and lawsuits. Also, check out Every Landlord’s Legal Guide, by Marcia Stewart, Ralph Warner and Janet Portman (Nolo) for detailed advice on housing discrimination and how to avoid fair housing lawsuits.

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