Fair Housing Laws have a huge impact on the property management industry and it is no laughing matter. I have heard, “it isn’t a matter of if you will get sued but when.” I am very risk adverse so I would rather be proactive and not be sued in the first place instead of counting on my E & O insurance to cover me.

Here are two real life stories to bring home the importance of knowing Fair Housing Laws and being in compliance:

Once upon a time, there was a very successful property management company, in a multi-cultural urban area, that did not have a front desk person to answer the phones. Instead, the company had property managers answer the phone.

One day a man called the office to ask about a rental he saw on the company website. Mr. Friendly, property manager, spent a lot of time with the caller answering all his questions and scheduled a showing appointment.

Later that day another man called but he had a thick accent and it was hard to hear his questions. Ms. Busy, property manager, was running late to a showing and referred the man to the website to get more information.

A week later, the business owner received a letter that the company was going to be sued for Fair Housing Discrimination.

Unfortunately, the two men that called the week prior inquiring about a rental was the same person calling. The caller was a “Tester.” The tester called and posed as two different people but was in fact the same person. Since the tester was treated differently, it was alleged that there was discrimination practiced at the company. In the end the Company settled out of court and paid the fine. Not a happy ending.

The second story takes place in a land far away. The 40 year old, and well respected, property management company was in a small agricultural town. A nonprofit that represents tenant’s rights tested this small town company. The question was, “how many people can live in this house?” Yes, there are guidelines but it is obvious if people are over the guidelines that there are too many people for the house. The friendly staff stated that there were too many people for that house. Then someone came into the office and asked the same question and the friendly staff gave the same answer.

A short time later, the property management company was sued for Fair Housing Discrimination against families. The company owner discovered that even if they paid the fine the complaint would continue to be shown against the company. This of course adversely affects the value of the company. In addition, the nonprofit could come back at any time and sue again on the same charges.

In the end, the business closed after 40 years in the community. The property management accounts were acquired by another property manager and a large sum was levied against the company. Unfortunately, even with E&O and paying the fine this story did not have a happy conclusion either.

In both stories, the lessons learned are:

  1. Have a script for answering the phone and say the same thing to everyone.
  2. All staff needs Fair Housing training.
  3. When people ask about occupancy numbers just state the guidelines and let the caller do the math.
  4. Have a good attorney that is an expert in Fair Housing on speed dial as a resource.

It is not realistic to think that everyone lives happily ever after but we should not be living with our head in the sand either. Know Fair Housing Laws and set in place policies and procedures along with continual education for staff to manage your risk. Fair Housing has its place and unfortunately there are bad landlords in the world but there are also nonprofits that have to make money to support their causes which leads to looking for lawsuits even when they aren’t being brought by tenants themselves.

Kathleen Richards, is the owner of LandlordSourceThe Property Management Coach, and Portola Property Management. She has authored Property Management A-Z, and teaches regularly at community colleges and conferences about property management. She has been active in her field and holds professional designations as Master Property Manager (MPM®) and Residential Management Professional (RMP®) from NARPM®. Kathleen has served at the local and state level on the boards for NARPM® (National Association of Residential Property Managers).

Disclaimer: LandlordSource does not represent the article content in this website as legal advice. It is shared information only and up to the reader to use this information responsibly, seeking legal advice as necessary to their business.