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5 Tips To Stay Compliant With Fair Housing Laws
As a landlord or investor, the last thing you want is to run afoul of the law. That can be the biggest headache you will ever have in your professional life. And no doctor in the world will be able to alleviate your pain.
It’s tough enough to manage tenants, contractors, agents, bankers, and partners. But managing the consequences of breaking fair housing laws will give you more stress than all of the above put together!
So please. You don’t need to get first-hand experience in order to appreciate that. Lawsuits are the worst ways to learn a lesson.
When it comes to running a business, not knowing what you are supposed to know is not an excuse which will be accepted by a judge. It is your responsibility to adhere to legal requirement and not be negligent.
It is always best to check with a qualified real estate attorney familiar with the local area you are operating in to get the best advice.
Review your local laws regularly in order to keep up to date with what’s going on and maintain compliance.
Whatever the case, here are some tips to ensure that you are complaint with fair housing law and not discriminate against anyone.
1) Know what you are supposed to know
Even if you leave the legal part to a hired attorney, it is recommended that you read up and get familiar with the local laws governing your area. This includes those of the state and federal Fair Housing Laws.
Review them at least once a year and start mixing around with other landlords and investors.
A lot of times, you get informed of something new from acquaintances who are in the same industry. And you can discuss among you what the implications are and how to handle them.
Inquiries to clarify with authorities might also get a prompter response when sent in from a known investors network.
2) Treat everyone equally
It is perfectly fine to have high standards for the tenants you’d like to deal with.
But having different standards set for different people is a sure giveaway that you are practicing discrimination in one form or another.
You will land in trouble quicker than you can call your lawyer if you advertise “Women Only”.
Even if you do have a personal preference in the type of tenants you intend to rent to, putting your desires into words… on public classified advertisements… is suicidal.
This is why tenant application forms have become a standard protocol of landlords young and old. If you are not using them, the odds are that you are just plain lazy.
Every prospective tenants will have to answer the same questions no matter their race, gender, age, etc. And they go through the process in black and white documentation.
It’s hard for an evil prospective tenant to fault your practice when you standardize your operations this way.
On top of that, you should follow the lease agreement to the letter. Sometimes the karma that comes with being a good person will make you worse off.
If you bend the rules for a particular tenant and refuse to do so for another, it can be the basis for the tenant to file a complaint. Whether or not it succeeds is another matter. The gist is that you will spend some sleepless night rolling about in bed worrying of what might potentially happen.
3) Never assume
You can never know a person inside out. Even your spouse who you know so well tend to surprise you occasionally with behaviors that bewilder you.
So how can you be so confident with how well you actually know your tenants?
For example, let’s say a prospect calls in and inquires about a house. Somehow during the conversation, you paint a picture of him as someone with a party lifestyle and nudges him toward a particular property that is suited for that. Refusing to tell him about a posh unit you have in your books in a good neighborhood.
This is a form of discrimination too!
On the flip side, this could be a high income earner looking for an upmarket place to house his family. You could very well miss out on a perfect tenant just because of a tendency to stereo-type.
This is why an application form can solve a lot of problems for landlords. Information provided by applicants will be able to help better determine the profile of the prospects you are dealing with. And act accordingly.
And it might be noteworthy to inform you that you should always let prospects know of all properties you have available for rent. This is again… to avoid people with bad intentions from raising the discrimination card insisting that you are not showing him everything you have because you don’t like him.
Never make assumptions about the people you meet.
4) Never allow yourself to speak frankly and casually
Sometimes we think we have built up such a great rapport with someone that we think we can get away with making light-hearted snide remarks meant as a joke.
But some people can be very sensitive to such language used in conversation.
For example, you might think that commenting that women generally likes houses with more bathrooms is cute. So you recommend a house with more bathrooms. But these words going into the ears of the wrong lady can have potentially detrimental effects on your business.
Don’t let your words put you under unnecessary risks.
The secret weapon you have to counter against complaints is documentation. This is provided that you have done absolutely nothing wrong.
It would be crazy if you used your documentation to show that you DID discriminate…
Words don’t really pack a punch when dealing with dispute resolution. Documentation is what usually lands the knock-out blow.
So remember to keep record of everything and anything. And don’t forget to organize them properly for easy retrieval whenever a time comes for you to access them.
To execute this, it is suggested that you fill your office with real estate forms for absolutely everything. From contact to receipts. And minor agreements to minor resolutions.
You never know… A simple declaration of receipt can swing a dispute totally in your favor one day.
Buy a metal cabinet. Make it a HUGE one for all these documents.
Always check with your attorney whenever you are in doubt. Heck! Even if you are in no doubt, you might also want to get your thoughts double-checked just so that you can have a little extra peace of mind that you are acting within the law at all times.