Posted on 1 Comment

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.

Posted on Leave a comment

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.

Posted on

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.”
    • http://www.translate.google.com 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
Posted on

Sex Offenders

You can deny housing to sex offenders on the Registry, and not violate the Fair Housing laws, as long as you turn down ALL sex offenders on the Registry. If you are using the Registry as an excuse to turn down somebody who is Hispanic, for example, but White offenders are allowed housing, then you will be in trouble. My authority for this statement comes from the United States Department of Justice information page regarding Fair Housing Act at https://www.justice.gov/crt/fair-housing-act-1

You can also deny housing to anyone who has a criminal conviction for manufacture or distribution of illegal drugs, no matter when the conviction occurred. Same thing as the sex offenders–it can’t be an excuse to turn down some people and rent to others with the same history. My authority for this statement comes from 42 U.S.C. §3607(b)(4); See, also Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Activities, April 4, 2016, at pg 8.

Aside from that, you are not allowed to have a blanket prohibition against people with convictions within a certain time frame. HUD says you must take into account the type of crime, the age of the person at the time it was committed, how much time has passed, and rehabilitation evidence in the meantime. Wish I could be less vague, but HUD hasn’t provided any more guidance than that. My advice-continue to turn down people convicted of violent crimes or arson, or multiple property crimes such as theft, and don’t worry about drug use offenses more than a year old.

Posted on

Smells, Noise, Allergies

Landlords of multi-family properties have an obligation to ensure that all tenants have the quiet enjoyment of their premises.  This includes the right to be free from strong odors, allergens and noise.  We all understand the part about noise, and have for years enforced rules about tenants and excessive noise from parties, music and arguments. 

Why are we afraid to enforce rules about cooking odors and pet noise/odors/allergens?  Because someone always hits us back with some explanation that contains the words “Fair Housing.”

There is no need to be afraid of this, though.  Tenants are not allowed to interfere with the quiet enjoyment of other tenants. This includes the intrusion of offensive or dangerous sounds or substances into the space of the innocent tenant, or into the common areas. In other words, tenants are not allowed to “over-share.” 

Not only CAN the landlord do something about over-sharing, he SHOULD do something about it. That is because of two legal principles called “quiet enjoyment” and “constructive eviction.”  If the innocent tenant claims his quiet enjoyment rights have been violated, and the landlord did not remedy the situation, the innocent tenant can claim a “constructive eviction,” cancel its lease, and sue the landlord for damages.

Do not let the offending tenant frame the issue. It is not one of national origin discrimination. The issue is not about disabilities and Fair Housing. The issue is one of the quiet enjoyment rights of other tenants.

Which one trumps the other? Quiet enjoyment trumps Fair Housing.

The Fair Housing rule that requires you to accept an emotional support animal, or a service animal, is called a Reasonable Accommodation Request. It is a reasonable request to modify the rules in order to accommodate a tenant with a disability.  We all seem to forget the “reasonable” part of that phrase.  While it might be reasonable to allow the animal, that does not include the unlimited right to do whatever the tenant wants in connection with the animal. The tenant cannot be cruel to the animal, it cannot allow the animal to damage the rental unit, it is liable if the animal injures someone else, and its animal is not allowed to intrude into other people’s living spaces either with its physical presence or its noise, odors or allergens.

The Fair Housing rule that prevents discrimination on the basis of national origin means you cannot refuse to rent to Hispanics or persons from the Middle East, as examples. You do not have to allow culturally important activities that create excessive noise. You are allowed to put occupancy limits related to the number of bedrooms, even though some cultures might routinely allow 5 or 6 people to occupy each bedroom.  And, you are allowed to prohibit over-sharing of cooking odors that other tenants find objectionable.

The landlord’s response in these situations should be, “I am not restricting your right to cook the foods of your heritage.[Or, I am not restricting your right to have an emotional support or service animal.]  I am restricting your over-sharing. You rented Unit 123. You are allowed to use Unit 123. You are not allowed to use other units. You are not allowed to invade other units with odors, noise, or allergens that adversely affect tenants in other units. You are not allowed to invade the common areas with odors, noise or allergens, to such a degree that the common areas cannot be peaceably enjoyed by all tenants.  You must take steps to control these things, or you will be subject to eviction and suit for damages.”

Of course, this all depends on having the right lease language to allow landlord enforcement. If you are not sure, you might want to have your attorney review your lease documents. To learn more, check out some of our classes listed below.

Posted on

Fair Housing Exemptions

Many landlords incorrectly believe they are exempt from the Fair Housing laws.  It comes up most often when a tenant wants to have an emotional support animal and the landlord says, “No pets allowed, and I’m exempt from the Fair Housing laws.”

I’ve been told that landlords of single family residences are exempt. That is not true.  Believing this urban legend can get you in trouble.

Exemption #1 is for landlords of dwellings with four or fewer units, and the landlord lives in one of them. It has to be their only rental property. It must be owned in the landlord’s personal name, and not a corporation or LLC.

Exemption #2 is for landlords who own three or fewer single family residences as their only rental properties, and all titled in their own personal name.

You can lose your exemption if you use a licensed real estate person to assist with the properties OR if you use someone “in the business of real estate.”  Someone is in the business of real estate if they have more than two transactions in a year.