When renting out a property, you have to understand the Fair Housing laws contained within the Fair Housing Act and all other landlord-tenant laws.
The Fair Housing laws guarantee every American citizen the right to equal and fair treatment, avoiding housing discrimination by housing providers and the department of housing and urban development. Passed in 1968, the act was designed to bring to an end rampant discrimination in real estate by property owners that existed at the time and make available things like reasonable accommodation for wheelchair-accessible housing.
Since its inception, the act has been amended several times to expand on the original list of protected classes from things like unlawful eviction. The 1968 Fair Housing Act, is a Federal law that provides protection against housing discrimination and can eliminate identified barriers by housing providers on the basis of a protected class: race, color, nationality, religion, gender, disability, and familial status.
At Keyrenter Premier we believe understanding the Fair Housing Act is important, so the following is a guide to the Fair Housing Act in Arizona:
How is the Fair Housing Act Enforced?
The Arizona Attorney General’s Office at the federal level is responsible for the enforcement of the Fair Housing Act in Arizona, for protecting from housing discrimination, and it resolves housing discrimination complaints and can eliminate identified barriers in housing. In addition, the same office is also tasked with the responsibility of educating and training housing providers on the importance of abiding by fair housing laws to ensure awareness of the fair housing choice and civil rights act.
Penalties for Violating the Fair Housing Act
On March 16, 2021, the HUD published new inflation-adjusted civil penalty amounts for entities and individuals found to violate the Fair Housing Act. Under the revised amounts, first-time violators can be charged the maximum penalty amount of $21,663 under the law.
For violations occurring within 5 years, the maximum penalty amount one can be fined is $54,157. And those who’ve violated the act at least once in the last 7 years could risk getting fined a maximum of $108,315.
What Housing Types are Exempt from the Fair Housing Act?
The Fair Housing law applies to most types of housing. In rare circumstances, the Act exempts the following housing types.
- A property that has a maximum of four dwelling units and the owner occupies one of them.
- Private clubs and religious organizations are allowed to give preference to members.
- Housing communities or a fair housing choice for the elderly.
- Any single-family housing that is rented or sold without the use of brokerage services.
The Organizations Governed by the Fair Housing Act
The Fair Housing agreement outlaws discrimination against a protected class by the following entities and individuals:
- Insurance providers
- Mortgage brokers and lenders
- Real estate agents
- Property managers and owners
- Homeowner associations
Basically, the FHA guidelines apply to any person or entity that’s involved in the process of securing housing.
What are some common examples of how a landlord can discriminate against their tenant in Arizona?
The following are the subtle housing discrimination actions that someone could constrain as a Fair Housing complaint and may violate the Arizona Fair Housing Act:
- Stating in your rental ad that you only prefer renting to a prospective tenant of a specific race, gender, or familial status.
- Stating in your rental advertisement that you prefer renting to those of a specific faith.
- Rejecting a rental applicant on the basis of gender or national origin.
- Rejecting a rental applicant because they have a service animal or not renting to disabled tenants.
- Treating your tenants differently without reasonable accommodations. For example by asking some for a larger security deposit or different rent amounts.
- Breaking a lease agreement on the basis of a protected characteristic.
What can landlords in Arizona do to avoid potential discrimination lawsuits?
The following are some tips to help you steer clear of any discrimination claims by your tenant:
Advertise your Arizona rental property the right way.
Marketing a vacancy can be a challenge to any landlord and the longer a property stays vacant, the more rent money you could lose. That’s why it’s important to find a replacement tenant for your property as quickly as possible.
During the process, however, you must ensure that you don’t discriminate against prospects on the basis of the 7 protected classes.
Screen Tenants Efficiently
It’s the dream of every landlord to rent to the right tenants. That is a tenant that will pay rent on time, care for their rented unit, notify of maintenance issues and landlord and tenant issues on time, and renew their lease agreement at least once within reasonable accommodations.
But while there is absolutely no crime in this, you should ensure that your screening process is free from certain discriminatory language to avoid being in a situation where you could deny housing based on a protected class. For example, when inquiring more about a prospect, the following are some questions:
- Which church do you go to?
- What is your national origin?
- Have you ever been arrested?
- How many children do you have who are seeking housing?
- Are you pregnant?
- Which country are you originally from or what is your national origin?
- What is your marital status, or what is your familial status?
- Is that a service animal?
- What is your sexual orientation?
Treat All Tenants Equally
This is in regard to your landlord’s obligations. A tenant would feel discriminated against if, for instance, their requests are never honored as quickly as other tenants of a different characteristic. An example of this would be charging a security deposit or requiring property insurance for one tenant, but not for another based on a protected characteristic. This also extends to the treatment or harassment of the tenant for example through racial and sexual slurs.
Understanding the Fair Housing Act is critical to the success of your rental business and your property. Violations of the act, however innocent the intent may be, can result in huge financial penalties and an irreparably damaged reputation.
So, if you have more questions regarding the Fair Housing Act or any other aspect of Scottsdale rental management. Please don’t hesitate to contact us as Keyrenter Premier.
Disclaimer: This blog is not intended to be a substitute for professional legal advice from a qualified attorney. If you need further help or need expert help in any aspect of being a landlord, KeyRenter Premier can help. Get in touch to learn more!