Avoiding Discriminatory Practices Before the Tenancy
As stated above, one of the best ways to avoid Fair Housing complaints is to ensure fair and professional management practices for your marketing, application, and screening procedures. For example, by establishing written, objective criteria and policies that are both in compliance with Fair Housing laws and applied consistently in daily business operations, landlords should be able to avoid most Fair Housing complaints. Additionally, in the event a bogus complaint is filed, the establishment of those policies and practices may prevent the bogus complaint from going any further than an initial call or letter from a Fair Housing investigator.
Your written objective criteria should include past and current financial, credit, behavioral information patterns (such as excessive wear and tear or damage to former residences, or disturbing the peace and quiet of the neighbors).
The rest of the article will address policies and strategies to employ for specific pre-tenancy activities.
Review Your Marketing Practices
It is illegal under federal, state, and local fair housing laws to make, print, or publish any notice, statement, or advertisement, with respect to the sale or rental of residential properties, which indicates a “preference, limitation, or discrimination” based on one of the protected classes. The law applies to advertisements, displays, inserts, or any other type of advertising, including advertisements on the Internet or in newspapers, magazines, or even a billboard in your local church or market. While many words are clearly offensive and easily avoided, other words are more subtle, and may be offensive inadvertently. Landlords are wise to pay particular attention to their marketing efforts, especially their choice of words, phrases, pictures, and symbols.
Furthermore, the use of “selective” advertising is illegal. Selective advertising occurs where landlords place ads in specific newspapers or on specific websites with limited circulation or limited visitors. Advertising in newspapers covering limited geographic areas or published in a foreign language can be deemed “selective advertising” and discriminatory, and thereby a violation of Fair Housing laws. For example, in Los Angeles, an area with a diverse population and multiple choices for advertising in languages other than English, running an ad in an English only newspaper alone may expose the landlord to a claim of discrimination.
Even advertisements demonstrating a preference or limitation on the type of residents it is seeking to attract may cause problems for the landlord, even where the behavior is unintentional. Some guidelines to think about include avoiding the use of words and/or phrases that directly or impliedly refer to a protected class. For example, by advertising a property as a “private” or “exclusive” property, many individuals of various protected categories might feel as though they are not welcome and discriminated against.
It is not enough to simply avoid demonstrating a preference “against” a protected class, (e.g., “no children”) but a landlord is equally prohibited from demonstrating a preference “for” a particular class (e.g., “perfect for a single female”). Believe it or not, even the use of pictures of individuals placed on a landlord’s website as an advertisement can imply a discriminatory preference. For example, ads with photographs, clip art, or drawings suggesting a bias in favor or against members of a protected class, such as those in a specific age, racial, ethnic, or sexual, category can easily be interpreted to be for or against those in or outside the category represented. To avoid this, landlords should review their advertisements to make sure they are advertising “safely”, including a policy of using models or pictures of people representing a mix of individuals from varying protected groups, (including children).
Finally, landlords might consider marketing the features, benefits, and amenities of the property, rather than mentioning or displaying anything about individuals who might qualify.
Of course, there are some limitations as to the limits placed on what may be said in an advertisement. For example, when marketing the properties features, a landlord would be permitted to state the property has a “great view” without fear of being sued by vision impaired (disabled) applicants. HUD published a memo a while back that clarified which words and phrases are acceptable for advertising. It can easily be found on the Internet and should be utilized in drafting all ads for vacancies.
Review Your Application & Screening Procedures
Most acts of alleged discrimination occur during the application and screening process. In order to avoid being accused of such discrimination, it is wise to create written application and screening procedures that are objective, unbiased, and applied fairly and consistently to all applicants. For the record, if you own assets of different levels or qualities, (such as a “C” asset in a “C” area, and an “A” asset in a “B” or better area), applying different criteria to each asset is permissible. The key is to apply the same criteria to the applicants of a given asset class or area.
The Initial Telephone Call
In recent years, government agencies have received large sums of money to conduct investigations for violations of Fair Housing laws. Fair Housing advocates make use of “testers” on a liberal basis who do nothing but troll housing advertisements looking for violations in either the print component of the ad or the responses provided by landlords (or their agents) when the tester calls on the ad. Prudent landlords make use of a couple strategies to avoid falling prey to this. For example, some of my clients adhere to the policy of offering only limited generic information over the phone. Information such as the size of the unit, the number of bedrooms and baths, and the rental amount is fine to provide during a phone call, but by keeping the conversation short and asking the applicant to come by in order to pick up an application is a great way to see who is legitimate and who is merely a tester looking for an easy mark. Of course, additional questions can be asked if you feel the need, such as when the unit is needed, how many bedrooms and baths are required, if they are interested in any particular amenities, etc. The key here is to ask the same questions to everyone consistently and fairly.
Additionally, the prudent landlord knows not to make judgment calls over the phone. Discouraging an applicant from completing an application because they “sound like” a member of a particular racial or ethnic class can have serious repercussions. Nor should you ask questions designed to reveal whether someone is a member of protected class (an example is asking someone how old they are). Instead, simply provide generic information about the unit and rental amount, ask general, non-discriminatory questions, and encourage everyone who calls to come by the building to look at the unit and pick up an application. Of course, all prospective tenants of legal age (including emancipated minors) should be provided an application, and each adult applicant should be required to complete one. The applications should be standardized, asking the exact same questions.
Application Processes – Non-Discriminatory Qualification Standards
Having your “rental criteria” (e.g., gross income of 2.5 times the monthly rental obligation) well thought out, standardized, and in writing has untold benefits. In the event an applicant files a Fair Housing complaint based on an allegation of “refusal to rent”, the investigator will ask you to provide your written criteria. In addition to ensuring that applicants meet your qualification standards, having your criteria written out establishes a presumption that you treat everyone equally based on a set of objective, non-discriminatory criteria.
The key to establishing your rental criteria is to think through and write down the objective, non-discriminatory basis for the criteria, then ask yourself the purpose of the criteria. For example, when drafting your criteria, try asking and answering the following question, “my reason for setting this standard is. . .” If you have an unbiased, objective, and consistently applied answer to that question, the chances are increased that the criteria has a legitimate basis and will withstand scrutiny should you be forced to explain the basis of it to a Fair Housing agent during their investigation of an applicant’s complaint.
Many landlords are unaware of the fact that an applicant who files a complaint for “refusal to rent” only needs to establish four elements before the burden shifts to the landlord to prove there was no discriminatory basis for the denial. Those four elements are: 1) the applicant was from a protected class; 2) the applicant met the qualifications; 3) the applicant was denied; and, 4) the apartment was available at the time of application. Let’s face it, those are often easy elements to establish. One possible strategy to avoid such a complaint is to consider handing out a copy of the Rental Criteria to applicants as part of the application and screening process. Often times, an applicant who is provided a copy of your criteria will simply “self-screen” themselves and decide not to complete and submit the application. This saves everyone time and money, and limits the potential Fair Housing complaint filed by a disgruntled applicant.
While this is not an article on screening techniques, here are some basic considerations on screening procedures that will help you avoid Fair Housing complaints.
First, recognize that screening may be the most important activity in which a landlord engages, as it has a direct effect on his or her bottom line and the amount of headaches they will deal with during the course of an applicant’s tenancy. Have your screening policies and procedures well thought out and in writing. They should be followed and applied to every adult applicant in the same manner – no deviations – including when dealing with husbands and wives (both should complete a separate application). On that same note, be sure to charge everyone the same background, credit check fee, including each husband and wife individually.
When checking employment, housing, and personal references, use the same procedure on each applicant. You can even create a form that acts as a combination of a checklist for the procedures and a notes section for the information you receive. Don’t simply forego a part of the process on one applicant because you decided to accept that applicant based on a single piece of information, (such as a good income to rent ratio). Doing so can lead to a conclusion that you do not apply the same qualifiers to everyone impartially.
Review Your Rental Policies And Rules For Qualified Applicants
Dealings With Qualified Applicants
All landlords are required to offer all applicants the same rental terms and conditions for the same unit. Last year, 17% of claims were based on “unequal terms” and another 6% were based on “unequal conditions”. In order to avoid complaints of this nature, landlords should be sure they are offering the same rent and security deposit requirements the same lease or rental agreement periods, the same rent and security deposit payment plans, the same special offers, the acceptance or refusal of roommates, etc. An exception to the above policy exists where an applicant’s credit score is too low for automatic acceptance and either a co-signor or increased security deposit is required for acceptance – in that situation, increasing the security deposit is acceptable and not considered “discriminatory”.
A real world example of the type of situation that could result in a Fair Housing complaint is found where a landlord is attempting to fill a vacancy that has been on the market a little longer than normal and, in making that decision, decides to accept an applicant’s offer to pay less for the unit than the landlord advertised. In that situation, a claim could be made that the landlord discriminated by failing to offer that same rate to other applicants or existing tenants because they are members of one of the protected classes. If it can be proven that such a policy has a different impact on a specific protected group, (for example individuals from other countries who don’t normally think they can “negotiate” the rental amount) the landlord could be found to be discriminating. While the landlord could attempt to demonstrate that lowering the rent in this situation was a “business necessity”, thereby providing a legitimate defense to the complaint, the time and costs involved in doing so might simply make it easier to make a decision NOT to negotiate the rental amount stated in the advertisement.
The bottom line is that to avoid such a complaint in the first place, your rental policies and rules should be fair and consistently applied to everyone.
Fair Housing laws are onerous and expanding. They are often difficult to understand in terms of what, exactly, constitutes a violation. The key concept that should be taken from this article is to create criteria, polices, practices and procedures that are written, objective, unbiased, and consistently applied to all applicants and tenants. Additionally, keep your interactions with both applicants and tenants clear and friendly. Treating all applicants and tenants with respect and dignity through the tone of the conversation or written communication comes across and goes a long way toward avoiding complaints. Remember, tenants are your customers and this is a business.
The foregoing information is presented and intended to address the topic(s) covered above in a general nature. Specific situations and their facts should be presented to your attorney for review. The Brennan Law Firm is one of the fastest growing and most experienced landlord-tenant law firms in Southern California, representing landlords exclusively in evictions, negotiations, and judgment enforcement. Mr. Brennan may be reached at (626)294-0500, or toll free at (855)285-2230. Visit our website at www.MBrennanLaw.com for more information.