Investing in real estate is not without its share of potential hazards or pitfalls along the way.
One such set of regulations that all investors should be keenly aware of are those relating to the Fair Housing Act. The act states that a bona fide offer on a property that is for sale or rent cannot be rejected on the basis of race, color, religion, sex, familial status, or national origin.
It also states that discrimination when creating terms of the agreement or in advertising that shows preference to any race, color, religion, sexual orientation, familial status, or national origin is illegal.
That said, there are some myths associated with what you can and cannot do when it comes to your advertising efforts that can be dispelled easily enough.
The 5 Areas Where People Violate the Fair Housing Act The Most
Be sure that you keep the purpose of the ad in mind when creating your advertisements. While it’s not rocket science, it’s important to watch how your ads are worded … especially if you’re trying to market to a specific segment of the population.
1. National Origin, Race or Color
While it is unacceptable to use language that describes the housing, neighborhood or neighbors in a racial way or using ethnic terms, it is acceptable to use words such as “master bedroom”, “desirable neighborhood” and “exceptional find” in your advertising.
These terms are factual without being influential as to describing the people in the area and will not warrant the filing of a claim from a potential tenant or buyer.
You can use terms that describe the property such as “master suite”, “mother-in-law” suite and “bachelor apartment” when creating your advertising.
However, it would not be okay to use terms like “straight couple” or “men only.” Choosing verbiage that clearly discriminates against a particular gender or those with a specific sexual orientation is not acceptable.
It is perfectly acceptable to use description words about the property that are religious in nature such as “facility has a chapel” or “property has a cafeteria with kosher food available”.
You cannot, however, state that a particular religion is excluded … terms like “No Muslims” or “Catholics preferred” in your advertising.
4. Familial Status
Describing the property such as a “two bedroom”, “family room”, “nursery” or anything else that describes the property itself is acceptable.
Outright statements that prohibit unmarried individuals or individuals that are married to same sex partners are prohibited. It is also important that you are careful when discussing ages that are acceptable in the building unless it is designated as such a way that it is for seniors only.
You can use descriptions of the property such as “second floor walk up”, “walk-in closets”, “close to hiking and jogging trails”, and “easy walk to public transportation” without violating the Act.
You cannot use terms such as “no wheel chairs” or terms that directly discriminate against an individual.
Use Caution with Your Questions
There are some basic things you also want to consider when you are leasing or listing a property.
When meeting with a prospective tenant you want to avoid certain types of questions or statements that may be taken as derogatory in nature.
Wording and tone are very important when speaking directly to a potential tenant. Questions such as “Just how many children do you have?” or “Where do you worship?”
You also want to make sure to avoid comments about a persons’ age or sexual orientation. Your personal beliefs should be reined in during any and all potential tenant interviews and when showing the property.
A slip up during a conversation or questioning can be misinterpreted as discriminatory in nature and may provide the foundation for a potential complaint.
One way to avoid using terminology that could be conceived as discriminatory is by making a template for your visit with tenants or buyers. This will allow you to have more structure to your conversation and avoid any problems that you might run into in how you are asking the questions.
If you are unsure about a particular question or guideline relating to the fair act, you may want to take the time to read through the actual act: http://www.law.cornell.edu/uscode/text/42/3604
When it comes to advertising your property or talking to potential tenants, use common sense to make sure you are not violating the law. Take some time to look over your advertising and double check that it meets these criteria before publishing.
Ultimately, your ability to avoid possible complaints will come down to being cautious and sensible in your conversations and advertising.
Have you ever run into trouble with the Fair Housing Act?
Be sure to leave your comments below!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.