Understanding complex and subtle rules are more accessible with consistent systems from proptech companies that vet applicants.
The most egregious Fair Housing violators are easy to spot.
The Las Vegas landlord who wrote explicit terms for sexual favors into the leases of his female tenants. Or the New York couple whose available apartments on Zillow and other platforms would suddenly evaporate when Black renters showed up at their door.
Those examples, though disgusting, are apparent.|
Yet, the gray areas of Fair Housing keep property managers up at night. Indeed, property staff may commit potential violations without even knowing it.
Take the well-intentioned leasing agent who shows a young couple and their child an apartment, telling them, “it’s a great place for young families.” That comment could be construed as either steering -- an effort to streamline the “right” kind of homebuyers or renters to a building -- or discrimination toward older adults without kids.
Expensive, real-time consequencesCivil penalties for Fair Housing violations can be as high as $100,000.
The bottom line is that Fair Housing law can be complex, and even unintentional violations can be costly. Commercial real estate is the most essential asset class in the world— why not be extra careful to ensure you aren’t making a financial life-altering mistake?
What is Fair Housing law?At the federal level, the Fair Housing Act makes it illegal to discriminate in housing based on the following:
- National origin
- Sex (including gender identity and sexual orientation)
- Familial status
- Physical or mental disability
- Source of income (including rental assistance programs, such as Section 8 housing vouchers)
- Criminal history
Criminal background checks
Take, for example, criminal history. In an age of electronic background checks, asking for a criminal record is standard practice in the industry. But statistics show people of color are arrested at a rate disproportionate to their share of the population in the U.S. Applying blanket prohibitions against applicants with any criminal history could lead to a discrimination claim.
Better is to screen for violent crimes, serious felonies reflecting financial fraud, illicit drug manufacturing, burglary, and arson, or sex offenders
Occupancy limits and families
Occupancy limits can also be problematic. Except for properties designated explicitly for seniors, it’s illegal to deny housing to families based on the number of children they have. At the same time, specific ratios of co-living persons per bedroom or square footage can be applied in certain situations to maintain health and safety compliance.
Persons with disabilities
Most Fair Housing violations fall in the area of landlords not making reasonable accommodations for people with physical or mental disabilities. A cardinal rule in this area is not to ignore a request for reasonable accommodation.
A reasonable accommodation could include providing a ramp for someone in a wheelchair, or permitting their service animal, covered under the Americans with Disability Act, to live at a property that doesn’t allow pets. Real estate tech that prevents this from happening could be the difference between a thriving ecosystem between tenants and landlords... and a trainwreck.
Emotional support animals
But service animals are different than emotional support animals, another perpetual Fair Housing gray area for property managers.
While ESAs are allowed as a reasonable accommodation under the law, they’re also an area where renters often try to get an unjustified accommodation for an otherwise traditional pet.
Landlords shouldn’t ask about the condition the pet helps address, but they can request legitimate documentation from a third party certifying a need.
Real Estate Market Retaliation
Landlords and Real estate companies also open themselves to liability for retaliation against a tenant who makes a Fair Housing claim, extending to areas not generally associated with discrimination. For example, withholding service or repairs to a resident who’s filed a complaint could be considered harassment, even if it was simply a case of a maintenance request that fell through the cracks. Proptech startups like Snappt have addressed this issue by covering all the bases.
How real estate technology helps
Property Technology is one of the best ways to ensure that all applicants are treated consistently, especially in the Fair Housing problem areas highlighted above.
Bots: The increased use of automated chatbots to answer incoming questions at the beginning of a housing search ensures all queries are addressed consistently.
Self-tours: Enabled when a community’s intelligent locks are tied back into a property management system, self-tours and virtual tours can reduce Fair Housing gaffes between prospects and well-intentioned but undertrained staff.
Tenant screening applications: fintech (another name for this new technology) can also set up criminal background criteria to only flag serious crimes, ensuring a blanket prohibition doesn’t unintentionally refuse housing to a protected person.
Application vetting and fraud prevention: Snappt’s Artificial Intelligence-powered proptech treats each application the same as fake flag paystubs and bank statements. When it does, it automatically gives real estate agents a nonconfrontational out because they can say “the system” did a valuation and flagged the applicant’s documents instead of the property owners.
Automation for maintenance requests: Not only does this show equal treatment for everyone, but it also helps track requests for accommodations and routine maintenance tickets to show each is serviced on an as-submitted basis.
While Fair Housing law is anything but straightforward, training staff (even well-versed real estate professionals) and using technology can ensure property managers comply without expensive trigging liability when leasing agents inadvertently get it wrong.
Questions about pricing or how to get started with Snappt? Contact us now.