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Fair Housing Insurance

One of the most likely risks you will encounter as a landlord or property manager is not fire, tornado, hurricane, or personal injury. It is a Fair Housing complaint being made against you. It might be legitimate, because you were not aware of some of the rules. It might be bogus and merely used as leverage by an unhappy tenant or prospect. If fake, you are looking at a minimum of $15,000 in legal fees and lost rent just to get it thrown out. If real, legal fees and damages can be very large.

Sadly, most landlords are not aware that their insurance policy does not cover them for this. One person suggested their umbrella policy would, but that is not accurate. Umbrella policies don’t add extra risks. They just add more dollars to the limits of your other policies.

In the industry, what you want to obtain is called Tenant Discrimination Insurance. Property managers should check to make sure their Errors & Omissions (malpractice, basically) insurance includes this. If not, it is relatively easy to get it added as a rider. For landlords, though, the solution is not so easy.

Although you probably have landlord’s insurance for your rental properties, that is usually just for physical losses, plus liabilities related to things that happen on the premises. Most of those policies do not have any riders that can add Tenant Discrimination Insurance.

I have found five ways to obtain this. I know of four companies who write separate policies for Tenant Discrimination. They are

If you contact one of the named insurance companies above, they can either take your application online, or refer you to a local agent. You don’t have to move all of your insurance. You can buy just the tenant discrimination from them, and keep all other insurance with your favorite agent or company.

Fair Housing issues can be tricky. For classes and video on this topic, click HERE.

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Fair Housing Exemptions

Requests for emotional support animals cause the most Fair Housing anxiety among landlords. If the person has a letter saying they have a disability and need an ESA to assist with the disability, then Fair Housing says we must allow it. There are many legitimate claims and needs, but there are also a lot of con artists gaming the system. Some landlords will (incorrectly) say, “I am exempt from the Fair Housing laws. No animals allowed. Period. End Of Discussion.” Which would be good for them, if only they were really exempt!

Watch our YouTube video for an explanation for the exemptions. Yes, there is one for landlords of single family residences. BUT, it is extremely limited and can be lost. Learn the exemptions, and learn how to protect yourself so you don’t accidentally lose them. Click HERE for video.

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Fair Housing and “Limited English Proficiency”

The latest Fair Housing rumor sweeping the Internet relates to something called “Limited English Proficiency” or “LEP” for short. If you believe the emails and social media posts, a landlord who does not have all forms translated, at least into Spanish, can be hit with a Fair Housing complaint and an easy $16,000 PER VIOLATION penalty. Fearmongers offer to translate all of your documents, for a fee, of course!

Nonsense. Con artists are at work!!!!

Here is the truth.

  • You cannot blatantly discriminate, such as advertising “must speak English.”
  • Because the landlord/tenant relationship is relatively simple, and largely rests on written documents with very little on-going communication, landlords who routinely fail to return phone calls or even attempt communication with people who are not fluent will fall under HUD suspicion for unfair practices. In other words, you can’t use “I’m sorry I don’t understand you” as a blanket excuse to anyone who is not fluent in English. At a minimum, learn how to say the following:
    • English: “I am sorry. I do not understand. I need a translator.”
    • Spanish: “Lo siento. No entiendo. Necesito un traductor.”
    • will tell you how it is pronounced.
  • Requiring someone fluent in English to co-sign or guaranty the lease is a Fair Housing violation if the tenant otherwise meets credit and background requirements.
  • You do not have to translate documents, but if you have already done so, they must be made available to people who speak that language.
  • Allowing an interpreter of the tenant’s choice to be present or conferenced-in to phone calls is reasonable and should be allowed if requested.
  • Allowing a prospect the opportunity to take documents home for translation is a reasonable request and should be allowed.
  • If the market place for your properties has a high percentage of people who speak only one language that is not English, your failure to translate documents COULD be a violation if, statistically, it results in a higher number of rental denials than for people who do speak English. This is highly unlikely to be the case in Alabama.

Would you like more information about Fair Housing, the exemptions, the REAL traps, and debunking the fake problems such as Limited English Proficiency? Sign up for one of our upcoming Fair Housing classes at the link below. The live class earns 3 hours of Alabama Real Estate CE, but is also open to the public.

Fair Housing Classes or Videos