5 Smart Tips To Make Fair Housing Law Sexy

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Fair housing is not a sexy topic for real estate investors.

Personally, I prefer to talk about return on investment and investment strategies, but alas, like all things in life – the right to create financial freedom with real estate comes with some responsibilities. Chief among those is compliance with Federal, State and Local fair housing laws.

Our discussion must include coverage of the “silly season” which I define as a phase of life where rational behavior is countered and overcome with irrational actions based on vendetta’s or out-right childishness.

With that said, use these tips to ensure high speed wealth accumulation (now that IS sexy):

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1. Get Educated on the Basics

This area is not overly complicated but important to handle before you jump into the real estate game. First a question to give you a head start?

Question: Can I rent to only single tenants?

It surprised me when I first learned of the fair housing law scheme but that is NOT allowed. The Fair Housing Act also recognizes other protected classes:

  • Color
  • Religion/Creed
  • National Origin/Ethnicity/Ancestry
  • Familial Status (having children under the age of 18 in the home)
  • Disability
  • Gender
  • Age

Note: While omitted from the current Federal law, sexual orientation is protected in various jurisdictions.

2. Create a Written Policy that you Follow and Review Annually

I suggest even though you may only plan on one rental property, including a written policy that is included in all your applications and collateral material. Lets face it some people are strait whacked. It just takes one weirdo with an axe to grind to make your life miserable. If you document your policy and have signatures that show said wacko acknowledge you follow fair housing laws will go along way to shutting down the silly season.

3. Create a Record Keeping System

This one is my Achilles heal.

I hate paper- but the importance of this however cannot be overstated. Keeping a written record of your database of applicants and tenants can demonstrate fair application of your policy.

However, if you don’t have records to prove your compliance it exposes you to a lot of headache and even payment of a “Dave Ramsey style stupid tax.

4. Educate your Team or Ensure your Property Manager has a Solid System

This one is a great way to show compliance.

Have your team attend a training and document a memorandum where they sign and agree to adhere to your policy. Look for the same in a property manager. In fact if they don’t have this…RUN. A professional property management company should have this aspect locked down tight.

5. Relax

If you followed the above four tips your going to be in great shape. Sure, someone may make a claim because they are mad at life and have decided to take it out on you. It will likely happen over time if you are in the game long enough. However, don’t worry, as long as you document your process and comply.

So what do you think? Any experience in using a well documented system to end “silly season?”

Photo Credit: Anna Fischer

About Author

Douglas Dowell

Douglas Dowell J.D. is a commercial and multifamily investor. His blog will focus on legally raising private money, risk mitigation with due diligence and management science. He is also an avid student of success principles with a focus on modeling success factors.

5 Comments

  1. I have a policy that I only rent to minorities, who are religionists (secular humanism has been defined as a religion), of any national origin, ethnicity/ancestry (except my own I know better), a loosely fitting multi parent/child of varying ages family is best, and it’s a plus if they have a disability.

    My sole reason for discrimination across the board is cause by a tenant with a lack of green, or little opportunity to acquire green. One of my all time best tenants was Kermit the Frog.

    Sadly his great success caused Kermit and his roommate the Cookie Monster to take up new digs in a luxury flat in center city.

  2. I am in Massachusetts where tenants may as well be a protected spotted owls. In Massachusetts if you receive housing subsidy you are a protected class. All the Ma investors should be brushing up on the new additions to the Fair Housing Rules. I just did a CE class yesterday.
    And to everyone’s shock and surprise including my own, a landlord can’t charge an application/background check fee, In Ma.

    • That isn’t new, it is ludicrous but not new.
      Luckily most applicants are just as ignorant of this as landlords and agents so you never hear about it coming up.

      I think if you use something like SmartMove you avoid the issue since the applicant pays for the reports directly.
      The issue is the actual collecting of monies.

      Oh and god help you if are accused of discrimination, legitimately or not. Pretty sure you will get in more trouble than for manslaughter…

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