When it comes to finding ideal tenants for your rental property in Detroit, Michigan, proper screening is a must.
In most cases, you’ll get a lot of applications for tenancy
How can you go about choosing the best prospective tenants without breaking any Fair Housing Laws?
For starters, it would be best to learn everything you can about the Fair Housing Act (FHA).
This post is a great place to get that process going. It covers the basics of Fair Housing Laws and how you can protect yourself.
Keep on reading to find out more about this important real estate owner legislation.
6 Things You Should Know About the Fair Housing Laws in Detroit
1. Meaning and History
What are Fair Housing Laws anyway?
These are laws put in place to ensure that every American gets fair and equal treatment in matters relating to housing.
That means that no one should be discriminated against because of their class when:
- Applying for tenancy
- Applying for a mortgage
- Buying a piece of property
The Fair Housing Act was enacted back in 1968, just a week after Martin Luther King Jr.’s assassination.
But the enactment came after a series of attempts that started as early as the mid-1800s.
The most significant events that led to the institution of these laws include the:
- Civil Rights Movement of the early 1960s
- Rumford Fair Housing Act of 1963
- Civil Rights Act of 1964
- All of them finally leading up to the Fair Housing Act of 1968
Since its enactment, the Act has been an effective tool in the fight against discrimination in the housing industry.
2. The Goals of Fair Housing Laws
What makes these goals so important? Or what do they do exactly?
Fair Housing Laws help to minimize (or end) housing discrimination.
Basically, that means that they deter landlords, property sellers, and mortgage lenders from being discriminatory.
In light of this, you might be wondering, what actions are deemed discriminatory under the Fair Housing Laws?
Here are a few common examples of housing discriminations:
- Interfering with someone else’s Fair Housing Rights.
- Showing bias against a protected class in an advert.
- Posting discriminatory statements on property listings.
- Lacking consistent requirements for a home purchase.
- Denying mortgage applications from people who belong to a protected class.
- Using unfair and unequal property appraisal methods.
- Offering different classes of people different sets of terms and conditions on mortgage loans.
- Setting different lease agreement with members of different classes.
- Denying a person housing based on their social class.
- Lying about the availability of a housing unit and so on.
All of these examples can be classified as discriminatory under the Fair Housing Act. And the list above only covers a few of the many forms of housing discrimination.
These are things that delineate what you should and shouldn’t do when dealing with prospective tenants, home buyers, and mortgage applicants.
Now, this brings us to another important question; what is a protected class?
3. Protected Classes under the Fair Housing Act
A protected class is a group of people who get discriminated against just because they possess a few unique characters or features.
They are different – in one way or the other – from a large percentage of the population.
The FHA has seen a lot of changes and improvements over the years. At first, it started with four protected classes.
However, over the years, a few additions to the list have been made.
Today, the number of protected classes totals nine. They are:
- National Origin
- Familial Status
- Sexual Orientation
- Gender Identity
This means that, as a landlord/property seller/mortgage lender, you are not allowed to discriminate against people based on any and all of these classes.
4. Enforcement of the Fair Housing Laws
The U.S. Department of Housing and Urban Development (HUD) is responsible for enforcing these laws.
Discrimination reports often end up going to a HUD office located close to the complainant, in this case, HUD’s Detroit office.
If there is no HUD office close enough to the complainant, they can still file a discrimination lawsuit against you in a federal district court.
HUD enforces Fair Housing Laws in different ways.
Sometimes, they’ll just investigate discrimination claims to see whether they have any merit. After they have all the evidence they need, they decide on how to proceed.
Other times, they hire Fair Housing Testers to pose as potential tenants, home buyers, or mortgage applicants.
Generally, they’ll approach you with one goal in mind; to see whether your housing practices are in line with Fair Housing Laws.
5. Easy Ways to Avoid Breaking Fair Housing Laws
The easiest way to avoid discrimination lawsuits is by:
- Make sure you abide by Fair Housing Laws.
- Not forgetting that your prospect may be an undercover HUD agent sent to test your practices.
- Make sure you are polite, fair, and consistent with all your prospects.
- Don’t make any exceptions unless you run out of options.
- Using other qualities to weed out bad prospects such as criminal histories, bad tenant history, inability to pay rent, poor credit scores, lifestyles, and pets just to mention a few.
If you follow these guidelines, your chances of getting sued for discrimination are greatly reduced.
There are a few exemptions when it comes to Fair Housing Laws in Detroit, Michigan.
These laws don’t apply to:
- Owner-occupied rentals with less than four units.
- Single-family homes rented or sold without a broker.
- Members-only private organizations and clubs.
In conclusion, staying on the right side of the law is easier when you understand the law.
That’s why, for landlords in Detroit, MI like you, learning about the FHA is the key to avoiding discrimination lawsuits and FHA penalties.