Fair-Housing-Act

What you need to know if you are going to be a Landlord?



Fair-Housing-Act Laws are super important if you are considering Investing in Foreclosures or any other dwellings for the purpose of renting them out. Yes, you need to be aware of the LAW regarding Illegal Discrimination. Why do I say Illegal Discrimination? Because not all discrimination is illegal, but illegal discrimination is.

First of all let me state that the Fair-housing-act means it is the right of all individuals to obtain the housing of their choice free from discrimination based upon classes protected by law. We'll begin a quick review of what the law says and where it came from.

We're first going to review three federal civil rights laws in the order enacted: the Civil Rights Act of 1866, the Fair-Housing-Act of 1968 (as amended), and the Americans with Disabilities Act of 1990.

Civil Rights Act of 1866

What was the origination of the Fair-Housing-Act ?

The Civil Rights Act of 1866 was enacted at the conclusion of the U.S. Civil War and intended to provide rights to freed slaves. It was the first significant legislation granting all citizens the same rights as white citizens, including the abilities to enter into and enforce contracts and to sue. This law also addresses property rights, and states: "All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property."

In 1968, the U.S. Supreme Court ruled that the Act prohibits "all racial discrimination, private as well as public, in the sale of real property." Jones v Alfred H Mayer Co, 392 US 409; 88 SCt 2186; 20 LEd2d 1189 (1968). This means that the Act negates all exemptions relating to racial discrimination found in any other federal or state statute. As you can see the Fair-Housing-Act is important.

Fair-Housing Act of 1968

Title VIII of the Civil Rights Act of 1968, which is commonly known as the Fair-Housing-Act of 1968 (as amended), prohibits discrimination based on race, color, sex, familial status, handicap status, religion or national origin in connection with the sale or rental of most dwellings and with the sale of any vacant land offered for residential construction or use. It was enacted within one week of the assassination of the Rev. Dr. Martin Luther King, Jr.

PROHIBITED CONDUCT

Under the fair-housing-act codes, obviously, refusing to sell or rent housing to an individual in one of the above "protected classes" is a violation of the Act. Other discriminatory acts include the following:

• Blockbusting - inducing or attempting to induce, for profit, persons to sell their dwellings by making representations regarding the entry or prospective entry into the neighborhood by one or more of the protected classes.

• Steering - directing tenants or purchasers toward or away from a specific neighborhood so as to avoid changing its ethnic or racial makeup.

• Redlining - refusing to make mortgage loans or to insure dwellings in a specific neighborhood because of its ethnic or racial makeup.

• Discriminatory Advertising - stating a preference for or against one or more of the protected classes when advertising a dwelling for sale or rent.

REASONABLE ACCOMMODATIONS

The Fair-Housing-Act requires a housing provider to make a "reasonable accommodation" in rules, policies, practices or services when such an accommodation is reasonable and necessary to afford a disabled person the equal opportunity to use and enjoy a dwelling.

For example, a landlord must allow a disabled tenant to make reasonable modifications to a dwelling if the tenant agrees to bear the cost of doing so and of restoring the premises to its original condition upon expiration of the lease. On the other hand, a housing provider may deny a request for an accommodation if it imposes an undue financial or administrative burden, or if it would fundamentally alter the nature of the provider’s business.

Now NOTE: Each state could add groups of individuals to this act for each legislature’s individual reasons. For instance in the State of Michigan, it not only includes: Race, Color, Sex, Familial Status and Religion but also includes handicap status, religion or national origin and also a person’s age or marital status. So you need to be informed about your local law. Also this should be noted:


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Americans with Disabilities Act of 1990

The Americans with Disabilities Act of 1990 (ADA) prohibits discrimination against persons with disabilities, and consists of five parts (titles) addressing discrimination in employment, public services, public accommodations, services operated by private entities, and telecommunications.

The ADA considers a person to be disabled if he or she: (1) has a physical or mental impairment that substantially limits one or more major life activities; or (2) has a record of such an impairment; or (3) is regarded as having such an impairment. Title I of the ADA addresses employment and prohibits an employer from discriminating against a disabled person with regard to procedures for job applications, hiring, advancement, training and discharge. A "qualified person with a disability" is one who can perform essential job functions with or without reasonable accommodation. In other words, the individual must be able to satisfy all the prerequisites for the position and perform all job tasks with or without reasonable accommodation.

Title I applies to an employer with 15 or more employees, unless providing reasonable accommodations would present an undue financial hardship on the employer. In the case of a real estate brokerage with branch offices, the number of all employees is totaled and, Title I is applicable if the total meets or exceeds the threshold of 15 employees.

FAIR-HOUSING IN THE NEWS

The majority of complaints pertaining to civil rights allege violations of the Fair-Housing-Act of 1968. While individuals may independently file civil actions, it's more common for them to file complaints with the U.S. Department of Housing and Urban Development (HUD), which has the authority to investigate complaints, issue subpoenas, and conduct administrative hearings. HUD may also refer cases to the U.S. Attorney General (U.S. Department of Justice), who takes on the role of the aggrieved party and frees the actual aggrieved party from the expense of pursuing the complaint.

HUD FY 2009 Fair-Housing Report

The Fair-Housing-Act directs HUD to report annually as to the nature of progress made in eliminating discriminatory practices and furthering the purposes of the Act. In its Fiscal Year 2009 Report (issued July 14, 2010 and covering the period from October 1, 2008 - September 30, 2009), HUD noted that it had received 10,242 complaints-an approximate 80 percent increase when compared with 1998, when the agency received the fewest complaints. HUD also received over 10,000 complaints in 2006, 2007 and 2008. Some highlights from the report are as follows:

• Although race-based discrimination complaints declined by approximately 21 percent since 2006, there was an increase in complaints involving the remaining six classes protected under the Act. Disability-based complaints accounted for 44 percent of all complaints filed.

Race-based complaints accounted for 31 percent of all complaints filed.

• The classification experiencing the greatest increase in the number of complaints was familial status, which accounted for 20 percent of all complaints filed. The number of sex-based complaints filed by tenants increased by eight percent when compared with 2006

Disability-based Complaints

Connecticut. A landlord refused to grant a reasonable accommodation from his no-pets policy so that his tenant's minor daughter could work with an assistance dog. The landlord later retaliated against the mother and daughter after they attempted to exercise their rights under the Fair-Housing-Act by refusing to renew their annual lease and beginning eviction proceedings. The U.S. Department of Justice and the landlord entered into a settlement agreement wherein the landlord paid the tenant and her daughter $115,000 for monetary damages and attorney fees. The landlord also agreed to attend fair housing training, implement a reasonable accommodation policy, and comply with notice, monitoring and reporting requirements. USA v Hussein, Nos 3:07cv01175-SRU and 3:07cv01405-SRU (D Conn May 30, 2008).

Indiana. Two elderly men living in a retirement facility suffered from physical disabilities that required them to use motorized wheelchairs and scooters. Shortly after both men moved in, the retirement facility instituted a policy prohibiting the use of motorized wheelchairs and scooters both in the community dining room and in the residents' apartments. One of the men was evicted for violating the policy, and the other vacated his apartment. Both men filed complaints with HUD; HUD in turn filed complaints on their behalf against the retirement facility. HUD v Rathbone Retirement Community Inc, FHEO Nos 05-07-1525-8 and 05-08-1327-8 (Sept 25, 2008).

Louisiana. A woman with a severe hearing problem occupied a condominium unit governed by a condominium association with a no-pets policy. She applied to Paws with a Cause® and was approved for a service dog, which would be able to warn her in case of fire and other life threatening situations. When she made a request for a reasonable accommodation, the association instructed her to board her dog in another location "until such time, if ever" the association approved her request. After the dog was actually delivered, the association threatened legal action. The woman moved out of her unit and filed a complaint with HUD, which in turn filed a complaint against the condominium association. HUD v Metairie Towers Condo Assn Inc, FHEO No 06-06-1162-9 (Oct 8, 2009).

Race-based Complaints

Fair-Housing-Act Complaints

Alabama. A Caucasian female tenant of a trailer home was visited by her African-American boyfriend. The son of the owner, who managed the property on behalf of his mother, ordered the tenant to move out because he didn't believe in interracial dating. He also turned off the water to the home. When the tenant asked the son what it would take to get the water turned back on, he replied that she would have to "get rid of the black boyfriend." The boyfriend left immediately, and the water service was turned back on. Both the tenant and her boyfriend filed a complaint with HUD, which in turn filed a complaint against the owner of the property and her son. HUD v Maze, FHEO Nos 04-09-0800-8 and 04-09-0801¬08 (Dec 17, 2009).

California. The owner of several apartment complexes in the Koreatown area of Los Angeles refused to rent apartments, or misrepresented the availability of apartments, to non-Korean prospective tenants. The owner also made statements to its employees indicating that African-Americans and Hispanics were not desirable tenants. The U.S. Department of Justice obtained a consent order that awarded the largest monetary payment it ever received in a housing discrimination case-$2.725 million. USA v Sterling, Nos 06-4885 DSF (Ex), 06-7442 DSF (Ex) and 07-7234 DSF (Ex) (CD Cal Nov 12, 2009).

Georgia. A real estate licensee steered white testers toward neighborhoods that were predominantly white and away from neighborhoods that were predominantly African-American. According to the complaint filed by a fair housing organization, before showing the tester any homes, the licensee told the tester that he didn't know where to take her because he "didn't know if [she was] Caucasian or not over the phone." The U.S. Department of Justice obtained a consent order requiring the licensee and his broker to pay $160,000 to the fair housing organization to settle the case. USA v Coldwell Banker Joe T Lane Realty Inc, No 1:08-CV-3427-MHS (ND Ga Feb 8, 2010).

Michigan. Testing revealed that an Ann Arbor area property manager denied the availability of apartments to African-Americans while at the same time telling white persons about apartments available to rent or inspect, and also that the manager refused to accept or process applications by African-Americans. The U.S. Department of Justice filed an action against the property manager and the owner. USA v Acme Investments Inc, No 2:10-cv-10853-AJT-DAS (ED Mich Mar 3, 2010).

Familial Status-based Complaints under Fair-Housing-Act

Fair-Housing-Act violations:

Massachusetts. A condominium association assessed fines against the occupants of four units because their children were playing in the common area and had allegedly caused damages. The association also charged the occupants $437.50 for attorney fees "incurred in this matter." The occupants filed complaints with HUD, which in turn filed a complaint against the condominium association. HUD v Romano, FHEO Nos 01-09-0480-8, 01-09-0481-8, 01-09-0482-8 and 01¬09-0483-8 (Dec 1, 2009).

Nevada. A woman with three children made application to rent a four-bedroom home. She also notified the rental agent that she was in the process of adopting three other children. The rental agent informed her that the owner would allow only five children to occupy the home despite the fact that zoning regulations permitted up to eight persons in a four-bedroom house. The owner later rented the home to a second applicant for less rent than that offered by the woman. The second applicant had only one child, but had filed for bankruptcy the month before, and his credit report showed "serious delinquencies." The woman filed a complaint with HUD, which in turn filed a complaint against the owner and the rental agent: HUD v During, FHEO No 09-09-0598-8 (Dec 10, 2009).

You see what could have been saved by paying attention and heeding Fair-Housing-Acts? Studying the Fair-Housing-Act and being familiar with it is highly beneficial to all Landlords and Tenants too!

So you can See Fair-Housing-Act Laws are Important to Landlords!





Which is the best for Investment?

A Single Family foreclosed home-

A Duplex or 2 Family-

OR a 4+ Multi-family Unit?