As a landlord, you have a legal duty to comply with fair housing law. Read this article for important tips on how to avoid unlawful discrimination.
Residential landlords have a multitude of legal obligations. Chief among them is the duty to comply with state and federal fair housing law. Unlawful discrimination can cost you not only significant sums of money, but also your reputation.
A recent high-profile landlord-tenant case illustrates the often thin line between legitimate and discriminatory reasons for denying a prospective tenant. As reported in multiple news sources, a Minnesota landlord is facing discrimination charges for refusing to rent to a Hmong family. The landlord says he denied the application because language barriers would have made it difficult for the tenant to understand - and therefore abide by - the terms of the lease agreement. He believed that the tenant would not be legally bound by the lease unless it were translated, which would involve significant expense. In its charging documents, the U.S. Department of Housing and Urban Development claims the denial amounted to unlawful discrimination on the basis of national origin.
The case highlights the importance of fair housing compliance at all phases of the process. Residential landlords must take care to avoid discrimination in placing advertisements, conducting showings, reviewing applications and preparing lease terms. Violations can result in serious legal consequences. Landlords who engage in unlawful discrimination can be held liable for monetary damages, civil penalties and even punitive damages in some situations.
What are the boundaries of unlawful discrimination?
The first step toward compliance is understanding the framework of the law. While landlords are generally free to accept or reject tenants on the basis of almost any criteria, they cannot discriminate against current or potential tenants on the basis of:
- National origin
- Sexual orientation
- Marital status
- Familial status
- Public assistance
Minnesota law provides limited exceptions to some of these grounds for owner-occupied properties. However, it is critical to understand the scope of those exceptions and whether they apply.
How can you protect your financial interests?
As a landlord, you have a legitimate financial interest in making sure your tenants can fulfill their legal obligations. Careful screening is a critical part of the process. Yet, to avoid running afoul of fair housing laws, it's important to have a written policy outlining objective, nondiscriminatory criteria for prospective tenants. For example, you may require prospective tenants to demonstrate:
- Sufficient income
- Good credit scores
- A clean criminal history
- No prior evictions
- No current bankruptcies
- No outstanding judgments
By maintaining careful records of tenant applications and outcomes, you can readily document the reason for a denial should questions arise later.
It's also important to be aware that discrimination can happen after you have accepted a tenant. The law prohibits landlords from imposing differing lease terms - for example, requiring a larger security deposit or enforcing stricter occupancy rules - for discriminatory reasons. It also prevents landlords from evicting tenants on the basis of discriminatory grounds.
Fair housing law can be complicated, and the lines are not always clear. If you have any doubts about whether a particular course of action complies with the law, protect your interests by enlisting the help of an attorney at Burns & Hansen, P.A.
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