by Brian Cody

Created on: February 16, 2009   Last Updated: February 19, 2009

One of the keys to successful land lording is not only location, and what type of rental property to buy, but the tenant selection process will have the greatest impact on your positive cash flow. As part of the tenant selection process the landlord must become familiar with the Federal and local State Fair housing laws. Any violation of the fair housing laws will have a dramatic adverse effect on your bottom line.

The Civil Rights Act of 1968 was called the Fair Housing Act Title VII. That act prohibited discrimination against the following protected classes. Color, family status, handicap, national origin, sex, race, and religion.

The Civil Rights Act of 1968 prohibited the following practices by landlords; 1) Refusal to sell or rent to a member of the protected class, with or without a Broker. 2) Discrimination in advertising for a vacant rental apartment, 3) Claiming to a member of the protected class that an apartment is not available, when it is available, 4) Landlords may not refuse to show a vacant apartment to a member of the protected class, 5) Landlords cannot refuse to rent a vacant apartment to a handicap person, 6) If the handicap tenant needs modifications completed in the apartment, then the modifications can be done at the tenants expense, the landlord cannot refuse request, 6) Landlords cannot threaten or retaliate against a member of the protected class who has brought a complaint a violation of the Civil Rights Act of 1968.

What are the penalties that a Landlord could face; 1) 1st Offense; is a financial penalty of $10,000, plus attorney fees and court cost. 2) 2nd Offense;a financial penalty of $25,000, plus attorney fees and court cost, A criminal penalty of up to 5 years in jail, 3) 3rd Offense; a financial penalty of $50,000, plus attorney fees and court cost, and up to a 7 years in jail if found guilty of a violation of the Civil Rights Act of 1968. As a landlord can you afford these penalties and would you want to be a guest of the federal prison system?

The following is typically the top three complaints that are filed by a member of the protected class against landlords;

1) Landlords who refuse to rent a vacant apartment to a tenant who have children under the age of 8 years old.

2) Tenants that have a disability issue.

3) Tenants who are receiving a Section 8 subsidized housing voucher.

The following is the process for a member of the protected class who will file a complaint against a landlord. The protected member will typically file their complaint with (HUD) the Department of Urban Development. The tenant has up to one year from the date of the violation occurrence to file that complaint with (HUD). An administrative judge (ALJ) will be appointed to review the case and make a decision and rule of the case. The protected member can also file a civil action in the US District court against the landlord.

A professional landlord should also contact their local state government and review and follow the state fair housing laws. The author has been a landlord since 1997 to present. We owned and operated a 5 family rental unit. We sold that unit and did a 1031 exchange for a 2nd vacation condo in Naples, Florida, where we are currently renting to seasonal tenants.

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