Failure to comply with landlord-tenant laws, whether it's security deposit limits or notice requirements to enter rental property, can have negative financial consequences for your property management business. Violating antidiscrimination laws can be especially costly if a prospective or current tenant files a fair housing complaint or a discrimination lawsuit.
This article explains how to avoid housing discrimination in the first place and the basics of discrimination complaints and lawsuits, including the value of hiring a discrimination lawyer.
Before you place an ad on Craigslist or another site, or otherwise advertise a vacancy, it is crucial that you understand fair housing laws and what you can say and do when selecting tenants. This includes the language in your ads and the questions you ask on a rental application or when interviewing potential tenants.
The federal fair housing law (the Fair Housing Act of 1968, as amended (42 U.S. Code §§ 3601-3619 and 3631)) specifically prohibits housing discrimination on the following grounds (called "protected categories"): race, religion, ethnic background or national origin, sex (including gender identity and sexual orientation), familial status (such as having children under age 18), or physical or mental disability.
The federal Acts make it illegal for landlords to discriminate against people who fall into one of these protected categories—for example, by falsely denying that a rental unit is available to an African-American person or setting more restrictive standards for a family with small children.
In addition, many states and cities prohibit more types of discrimination. For example, California fair housing laws prohibit discrimination on the basis of sexual orientation and marital status. California laws also cover landlords who might otherwise be exempt from federal law, such as landlords of owner-occupied properties with four or fewer units.
An act of discrimination may expose you to challenges from more than one level of government, so knowing antidiscrimination law—federal, state, and local—is key to avoiding problems.
For details on antidiscrimination laws, visit the U.S. Department of Housing and Urban Development's (HUD) website, which includes a list of fair housing resources by state (including local agencies).
Tenants in all states have several ways to fight housing discrimination. These include filing an administrative complaint with HUD or a state fair housing agency or a local agency charged with overseeing discrimination complaints. Tens of thousands of tenants file fair housing complaints with HUD every year (approximately half of which involve claims concerning disability discrimination).
A federal HUD complaint must be filed within one year of the alleged violation, but state statutes or local ordinances may set shorter time periods.
Fair housing agencies typically take many months to investigate a complaint. Unless an agency dismisses the complaint outright, it will usually attempt to reach a conciliation agreement or compromise between landlord and tenant. Outcomes vary—for example, a tenant might agree to drop the complaint in exchange for a sum of money or your promise to rent him or her an apartment.
If conciliation is unsuccessful, the fair housing agency will hold an administrative hearing (a trial before a judge but without a jury) to determine whether discrimination has occurred.
A tenant (or prospective tenant) may also sue you in state or federal court, even after filing a complaint, as long as an administrative hearing has not yet begun or the tenant has not already signed a conciliation agreement. A tenant who plans to go to federal court must do so within two years of the alleged violation.
In a typical federal lawsuit, the tenant has consulted an attorney immediately after the landlord's alleged discriminatory conduct. The attorney prepares a complaint and asks the court for an expedited hearing, hoping to get an order from the court directing the landlord to cease the discriminatory practice without a formal hearing.
A court or housing agency that finds that discrimination has taken place may order you, the landlord, to do one or more of the following:
For especially outrageous discrimination, you may have to pay punitive damages of thousands of dollars, plus the tenant's attorney fees.
Even if you are ultimately vindicated, the costs of defending a housing discrimination lawsuit or administrative complaint can be devastating. Cases can be quite complicated and typically require an attorney's help.
It's crucial that you hire someone experienced with defending landlords in discrimination complaints and lawsuits. For advice on finding a good lawyer, see How to Find an Excellent Attorney.
For detailed information on discrimination and fair housing, see the Nolo books Every Landlord's Legal Guide and The California Landlord's Law Book: Rights and Responsibilities.