When you decide to become a landlord, what you do with your property isn't entirely all up to you -- there are laws that apply to your actions, including the Fair Housing Act.
A lot of small investors who rent out homes that they once lived in or inherited from a relative aren't familiar with the rules -- and that causes them to run afoul of the law. Here are some of the top mistakes landlords tend to make:
- They don't read up on the Fair Housing Act. It's smart to have a passing understanding of the law that makes it illegal to discriminate against someone based on one of seven protected classes, including national origin, race, color, religion, familial status, disability and sex.
- Not following their own rules. You need to have clearly defined (and clearly legal) rules regarding your tenants. You also have to follow them. In other words, if you have a credit score requirement for your tenants, you can't bend the rules for that one nice lady with the kids who just went through a divorce -- unless you want to be sued by the next hard-luck case that comes along.
- Asking questions about their family. If you're the sort of person who will ask about someone's marital status and kids when you meet them in the grocery store line, this rule is tough to remember.
- Using "code" in your rental ads. This confused landlords a lot because it can be hard to tell if "near the church" is a way to discourage non-Christians or just a selling point.
- Not making exceptions for disabled tenants. Even if you think it's a bad idea for a tenant with a limp to rent your apartment, it's not your call. You also make reasonable accommodations (like allowing a tenant to remodel the shower for ease of access at his or her own cost). You also need to permit service animals, even if you have a no-pet policy.
When you're a landlord, there are numerous reasons that it's wise to consult with an attorney about your Fair Housing questions. Don't wait until you have a problem. Remember: It's usually a lot easier (and cheaper) to prevent a lawsuit than fight one.