The Lawsuit Started With A Phone Call

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Title VIII of the Civil Rights Act of 1968 (also known as the Fair Housing Act) prohibits discrimination in the sale, rental or financing of dwellings based upon race, color, national origin, religion, sex, familial status and disability.  This law basically states that these seven criteria can have no basis in determining if a person is able to rent, buy or get financing for your property.  In other words, being Catholic or Pakistani does not determine one’s ability to pay.

These are the seven so called “protected classes”.  You have to be very careful not to treat any of these seven protected classes any differently than anyone else at all times throughout your tenant screening or sales process.

The government and other advocacy organizations have testers out there.  These testers will call different apartment complexes, management companies and real estate offices to try and determine if they are engaged in any form of discrimination.

And it all begins with the very first point of contact, the phone call.

The Phone Call

Take a recent example I saw in the news.

NFHA (National Fair Housing Alliance) conducted 304 tests of 117 apartment complexes in 25 states. Of those tested, one out of four treated deaf callers differently from hearing callers in a manner that appeared to violate the Fair Housing Act, the NFHA found.

In follow-up testing of those that may have discriminated in the first call, the NFHA found that at least 40 percent hung up on a deaf caller at least once, 86 percent gave more details about the homes to people who were not hearing impaired, and 56 percent mentioned further background and financial checks to be qualified.

Here is the thing to take away from this story. The testers did not even have to step foot on the property or meet with the landlord or property manager.  No application was filled out and no one was subsequently denied.  All it took to get slapped with a discrimination lawsuit was a poor response to a phone call.

You simply must treat everyone who calls asking about a property you have for rent or for sale in the absolute same manner.  You must tell each person the exact same information and let the caller decide if they want the property or not.

I know you may think you are being helpful by not telling the lady with two kids about the one bedroom apartments you have available.  After all why would she want only one bedroom?  Logical I know, but it is not your decision to make.  It is her decision and she has to make it.  If you do not tell her and everyone else about every unit you have available, you are being discriminatory and face potential problems.

So be sure to have a script for you and for anyone who might answer the phone or be a point of contact regarding your real estate activities.  Make sure that this script is basic, general and provides the exact same information to everyone who inquires.

The incident reported in the news above was due to poor training.  Learn from it and do not let the same thing happen to you.  After all, you never know who is on the other end of the phone and I know you do not need a lawsuit or a fine of up to $100,000.

Have you ever had a tester call you or had to deal with a discrimination lawsuit?  Let us know about your experiences with your comments.

Related: Three Simple Landlord “Mistakes” That Could Send You To Prison

Photo Credit: » Zitona «

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About Author

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past president and vice-president of the local REIA group, the Memphis Investors Group.

10 Comments

  1. Wow. Just wow. Thanks for the article, this is something you don’t think about until you walk into it, and if you hadn’t of posted this I wouldn’t be as pro-active about making sure this doesnt happen.

  2. For me, the phone call is NOT the first point of contact. I advertise on CL, using an anonymized email. I get a lot of inquiries this way and can respond to those that sound promising or I can wait until someone goes to the trouble of completing an online application to respond.

    • Kevin Perk

      Bill,

      Thanks for reading and commenting.

      You are very correct here. A phone call may not be the first point of contact these days. I would bet many folks like you might receive an e-mail, or maybe even a text message.

      I would respond with a general message to every point of contact. I would not try to pick and choose the ones that “sound promising” as I think that could be misconstrued. Best to have a general e-mail that goes out to all requesting an application or a phone call to your office.

      Thanks again for reading and adding to the discussion,

      Kevin

  3. Priscila Argaez on

    Very interesting! A lot of people think it’s really easy to just buy houses/apartments and rent them out. A landlord needs to be totally professional, and by that I mean that a landlord has to know how the real estate industry works, and the laws involved. Fair Housing laws are definitely something to take under consideration when leasing real estate. I always try to consult with my attorney first, before doing anything real estate related, to make sure I am complying with the law. It’s also good to keep yourself up-to-date with was is happing out there in the real estate industry, and the specific regulations that apply to your state.
    Thanks for talking about such an important subject Kevin!

    • Kevin Perk

      Priscila,

      You are absolutely right. These testers do not just go after the “big boys.” They will also go after the small “mom and pop” operations as well. A discrimination suit against a small operator could be devastating.

      Good for you for checking with your attorney. But please keep reading and learning on your own.

      Thanks for reading, commenting and for the kind words. I do appreciate it,

      Kevin

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