The Fair Housing Act (FHA) (42 U.S. Code § § 3601-3619 and 3631), the federal law that bans housing discrimination across the United States, doesn't ban all forms of it. Instead, the FHA aims to ensure that applicants or prospective tenants (prospects) and current tenants don't get treated differently because of certain characteristics or attributes they have. A group of people who share such an identified characteristic is collectively known as a "protected class."
To avoid fair housing violations and costly liability, landlords need to know what a protected class is, as well as understand which protected classes are included under the FHA. For example, rejecting an applicant because he's from South America is illegal because the FHA bans discrimination based on national origin. But refusing to rent to applicants who have Section 8 vouchers won't violate the FHA because source of income isn't a protected class under federal law.
The FHA, to date, includes seven protected classes: race, color, religion, national origin, sex, disability, and familial status. This last term refers to the presence of at least one child under 18 years old, and also protects prospects and tenants who are pregnant or in the process of adopting a child. You may legally turn away families with children, however, if your rental property qualifies as senior housing. (Check out the Nolo article, "Senior Housing Basics," for more information.)
Be aware that disability has a specific definition under the FHA, and it includes both physical and mental impairments. Prospects and tenants who fit the definition are entitled to reasonable accommodations to policies (such as letting a tenant keep a guide dog despite a no-pets rule) as well as reasonable modifications to physical structures at your property for increased accessibility (such as installing grab bars in a bathroom).
When it comes to protected classes and the FHA, the key to compliance is whether a landlord treats prospects and tenants differently because of the underlying characteristic that the prospects and tenants have. Landlords can legally reject applicants, evict tenants, and take other adverse action against people who may be protected under the FHA if the reasons are legitimate and unrelated to any protected class.
For example, a landlord who rejects an applicant because she's female and Hindu is violating the FHA's ban on discrimination based on sex and religion. But a landlord who rejects a female Hindu applicant because she has poor credit or can't afford the rent isn't violating the FHA—assuming the landlord applies the same screening requirements to all applicants.
Not only can a landlord legally take such adverse action, but a landlord should do so to avoid claims of reverse discrimination. For example, say a landlord accepts a female Hindu applicant despite her not meeting the property's tenant screening requirements, out of fear that she'll bring a discrimination claim. Taking such action actually means the landlord is discriminating in favor of the applicant (and against other applicants) based on two protected classes (sex and religion), which is illegal under the FHA.
Many states, counties, and cities have their own fair housing law that includes additional protected classes not covered under the FHA. For example, in many parts of the United States, housing discrimination based on source of income, marital status, or sexual orientation is illegal. So, if prospects and tenants believe you discriminated against them based on marital status, for example, they can bring a claim against you only if your state or municipality includes marital status as a protected class. Even if it does, note that prospects and tenants would be limited to pursuing their claim under the state or local law, which may impose different penalties than the FHA.
For more information about protected classes and discrimination complaint procedures in your area, check out Nolo's resource on "State Fair Housing Agencies."
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.