Top Five Things You Need To Know About Single-Family Rentals and Fair Housing - The Fair Housing Institute, Inc.

Top Five Things You Need To Know About Single-Family Rentals and Fair Housing

Does the Fair Housing Act apply to single-family rentals? Are there exemptions? Two very common questions, especially as the single-family rental industry is experiencing unprecedented growth.

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Top Five Things You Need To Know About Single-Family Rentals and Fair Housing

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The single-family rental industry presents challenges regarding when and if the Fair Housing Act applies to their specific operation. In this article, we will discuss common questions and scenarios we find in the single-family rental industry and the need for targeted fair housing training.

What are we talking about when we use the term “single-family” housing?

Specifically, we are focusing on homes that are owned and rented out by either an individual personally or through the use of a property management company or a realtor on a long-term basis. There is a common misconception that a stand-alone or single-family home does not fall under the purview of the Fair Housing Act like multifamily or apartment homes. This is not the case and every person and company should be aware of their responsibilities and potential liabilities under fair housing laws.

If I own the home where I live and a couple of duplexes I keep for investment, surely the same fair housing laws don’t apply to me as to a huge apartment community?

All of the fair housing laws that apply to multifamily housing also apply to individuals who own or manage single-family homes. However, there are a few limited exceptions, some are as follows:

  • Owner owns three or fewer units
  • A small apartment building with four or less units, and the owner lives in one of the units

A point of caution is that these are federal exemptions, but other federal laws may come into play. For example, you cannot racially discriminate when you contract. Additionally, each individual state may also have additional laws concerning housing. If you are unsure what your local laws are, it is always a good best practice to consult an attorney to determine if you are exempt or if there are laws you are required to follow.

I own six single-family homes I’ve purchased during the past ten years as an investment. I’ve hired a real estate agent company to handle these by leasing them, collecting the rent, and keeping the houses and yards in good condition. In other words, I’m really not involved other than being the owner and collecting on my investment. Why should I know anything about fair housing? Isn’t that the responsibility of the real estate company I’ve hired to manage the properties?

The law states that if your real estate agent discriminates in the way they are managing your properties, you are liable as the owner. You cannot walk away from liability under the Fair Housing Act if you are the owner. This is why it’s so important to at least have a basic understanding of fair housing laws so that when you hire a property management or real estate company to manage your properties, you can determine if they are handling your affairs legally and properly.

I manage many condominiums in a lovely community on behalf of the individual owners who have decided to rent their units. Many of the owners feel a special attachment to the units because they may have purchased it to live in it and later have moved to a different home while deciding to keep the condo as a rental investment. They often have strong feelings that they do not want a renter to have an animal or modify a bathtub into a shower. It’s my job to keep the owners happy, not the renter, so if the owner objects to these requests, I feel I must deny the renter’s request.

In this case, you cannot follow the direction of the owner; you need to follow the direction of the law or be prepared to assume liability. The law takes precedence. For example, perhaps the animal in question is an assistance animal. You cannot stick to your “no pets” policy in this situation, as the law clearly protects the right of an individual to have an assistance animal.

I plan to move from my home, which is in a very nice neighborhood but maintain ownership of the home and rent it as an investment. I am not moving very far away and will remain friends with many of my current neighbors. I feel I have a responsibility to make sure the purchaser is qualified to live in such a beautiful community. Can I describe the qualifications of a renter in social media advertisements as: persons who are Christian, established in the community, and middle aged or older should apply?

In this scenario, you are possibly exempt from the Fair Housing Act. That being said, this type of advertising could be viewed as discriminatory, and no one is exempt from that. An ad like this would be discriminating against religion, national origin, and age based on the criteria listed.

If you are unsure of what buzzwords to avoid, we suggest you check out this article or seek the guidance of a lawyer specializing in housing. The main point is that everyone needs to avoid advertising that discourages anyone based on a protected category.

I manage a number of single-family homes in my duties as a real estate agent. Since the owners trust me to maintain their houses, I have adopted a policy of limiting the number of children in the homes, since we all know that children do a lot of damage to both the houses and the yards where they live. My rule is that including the parents, no more than two children can live in the houses. With larger families, there is just too much work to do when they move out. I believe my rule is reasonable since it’s my job to maintain these houses.

Generally, the rule is that you cannot limit the number of children that can live in the home. Familial status guidelines take precedence here. You can only limit the number of occupants based on the number of rooms that can be used as a sleeping area. Remember that this includes more than just standard bedrooms; it can also include rooms like libraries, dens, or finished basements with windows.

These are just a few of the many questions or scenarios that an individual or a company that manages the rental of single-family homes might face. Again this is why targeted training is critical. In line with that, we are excited to announce our new course, Fair Housing for Single Family Rentals. This course will help both owners and operators of single-family rentals understand their responsibilities under the law to help keep everyone fair housing compliant.


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