The real estate industry has made a lot of positive changes to try to provide equal housing opportunities for everyone. Fair housing laws are designed to guarantee a person’s right to obtain housing regardless of race, color, religion, national origin, sex, familial status, or disability. Additionally, many state and local laws prohibit discrimination based on gender identity and sexual orientation.
Choose Your Words Carefully
Today, if a real estate agent or property manager uses any phrases in an advertisement description for a home or apartment building that could be considered discriminatory, they could face large fines if they are found guilty of violating the Fair Housing Act (FHA). While some phrases are obviously discriminatory and inappropriate in a listing description, such as anything in reference to race or sexual orientation, phrases that you might not think of as discriminatory such as “near a church” are not acceptable and “near places of worship” is. Another example is “walking distance to shops” could be considered discriminatory because a physically disabled person may not be able to walk, so instead the appropriate phrase is “conveniently located near shops.”
While describing a home as “walking distance to…” is likely not meant to be discriminatory, the point is that we are becoming increasingly more thoughtful about the words we use and who it could be excluding or even unintentionally offending.
As real estate professionals are becoming more discerning with the words they use, one of the most recent changes is we are now referring to the main bedroom as the “primary bedroom”, rather than the “master suite”. These shifts are indicative of the changing social and legal context that we operate in.
The Housing Industry
Property owners provide an absolutely essential service. To reflect the value of this contribution and minimize the negative stigma our business has gotten over the years, it’s time to eliminate the word “landlord” from our language and from real estate contracts. It’s an antiquated term that doesn’t accurately describe the service we provide or define the relationship between the owner, renter/lessee, and the government entities that we are beholden to.
There is also so much derogatory association with this word, and discrimination against landlords in the legal system. Unlike most other business owners, landlords have been typecast as greedy and unscrupulous for wanting to make a profit from their business and services. It’s practically become morally wrong in our society for someone to try to earn a living from rental income. This is the unspoken, underlying philosophy of many of the new rent control policies.
By contrast, tenants have been cast as humble, disenfranchised “victims.” As a result, the government has stepped in to “protect” them from landlords who want to charge fair market rent or want to move into the rental property they own.
In California, tenants have more rights than the owners, yet it’s the owners who bear all the responsibility for maintaining the property and paying the large mortgage and property tax bills. When purchasing a rental property, a buyer typically has to come up with a 20-25% down payment. On a $1,000,000 property, that would be $200,000- $250,000 — yet when renting, a tenant needs to put down the equivalent of one to two months’ rent maximum, which usually adds up to just a few thousand dollars as a refundable deposit.
The amount of risk and responsibility an owner has compared to a tenant’s is vastly disproportionate, yet government regulations continue to increase the rights of tenants and take away rights from property owners to the point that it’s crippling the industry.
A Respectable Business
I don’t see anyone thanking landlords for taking on the financial and legal risk of providing housing to those who can’t afford to buy a home. There are a lot of excellent landlords who do a lot for their tenants. I know many landlords who have given tenants a break on rent when they’re going through a difficult time, or who never increase the rent and forgo the profits they could earn just to make it easier on the tenant. And on the flip side I’ve heard horror stories of tenants who skip out on paying the rent, force the landlord to go through the costly eviction process, and then destroy the place before leaving – and are nowhere to be found for collections.
Given that tenants have more rights than property owners, the term “landlord” doesn’t seem to be fitting. In addition to not being an accurate description of the “role”, the image the term landlord brings to mind is a tyrannical, wealthy, lord-of-the-land. For one thing, with so many tenant rights, a property owner is far from being a lord of the land. But more importantly, we live in a competitive, service-oriented society where it’s important for any business owner to treat their clients well. The same is true of property owners and managers. Good managers attract and maintain good tenants.
It’s time for the term “landlord” to be eliminated from our contracts and vocabulary the same way that “master bedroom” is, and instead be replaced with a far more appropriate term – housing provider. The profession plays a vital role in society and deserves respect.
Rental property owners are providing a service to those who are in need of housing. They are not Lords-of-the-Land, calling all the shots and taking advantage of the poor. Owning rental property requires planning, hard work, expertise and a willingness to take on financial risk. Anyone who is in this business deserves respect and should be allowed to make a profit from the services that they provide.
Do you agree that the term landlord needs to be replaced with a name that’s more fitting for our times? If so, what do you think a good replacement would be?
This article was written by Mercedes Shaffer, an agent with Pacific Sotheby’s International Realty. If you have questions or comments she can be reached by phone or text at 714.330.9999, by email at [email protected] or visit my website at www.InvestingInTheOC.com. Mercedes Shaffer specializes in helping clients buy and sell investment real estate and 1031 Exchanges. DRE 02114448.