5 Fair Housing Laws & Occupancy Standards Property Managers Should Know
Fair housing laws and occupancy standards are notoriously tricky. So, it’s no surprise that even well-meaning property managers may inadvertently violate the Fair Housing Act. To protect yourself and ensure compliance, make sure you are well versed on these five common standards.
But before we dive in, there’s a general rule that applies to every policy decision in property management:
- Why you approved or denied an applicant based on screening criteria, making sure that non-discriminatory reasons are clear should you be challenged or sued
- Written policies and implementation processes
- Evidence that policies are distributed evenly and fairly
Now let’s look at the fair housing laws property managers need to know.
1. Laws around emotional support animals
If you’re interested in this topic, check out our article, Emotional Support Animals: What You Need To Know. It’s our most popular read to date!
Emotional support animals have become one of the most talked-about topics in property management. Landlords, leasing agents and owners all need to be aware of residents’ rights to assistance animals. It’s important that property managers say the right thing whenever the issue comes up.
According to the Fair Housing Act, housing providers are required to make “reasonable accommodations in rules, policies, practices or services, when such accommodations may be necessary to afford [a person with a disability] equal opportunity to use and enjoy a dwelling.”
In simpler language, property managers are required to help disabled residents through reasonable policy changes.
WHAT COUNTS AS A “REASONABLE” CHANGE IN POLICY?
A reasonable accommodation is a change or an exception that helps someone with a disability enjoy their space. For instance, an emotional support animal (ESA) is a reasonable accommodation in a building with a no-pet policy.
If there’s going to be a disagreement between your office and a prospect/resident, it’s probably going to happen if each party has a different idea of what is reasonable. They might think a baby goat is a reasonable ESA. You (backed by city/state ordinance) will probably disagree.
ASSISTANCE ANIMALS ARE NOT “PETS”
Assistance animals may be a service animal or an ESA. Generally speaking, property management businesses don’t run into many issues with service animals. These assistance animals tend to be dogs and can legally go anywhere their owner does, with few or no restrictions.
On the other hand, ESAs can be any animal (within reason) and are generally restricted to the dwelling.
HOW DOES SOMEONE REQUEST AN ASSISTANCE ANIMAL?
Requests for an animal can come in writing or verbally. So, if a resident stops by your office and says, “I need an emotional support animal,” that counts as them informing you.
The first thing you should do is document that the person stopped by your office and requested the animal. Include the date, time, animal type and any other important details about the request. If you use property management software, make sure to log it there.
THE NEXUS: EVERY ANIMAL MUST BE TIED TO A DISABILITY
It is important for the resident to provide what is sometimes referred to as the nexus. This is the disability-related need for an assistance animal, and there is no legal claim to an assistance animal without it.
If your building has a no-pet policy, the resident cannot simply say, “I want an emotional support animal.” They need to provide proof that the animal is tied to a disability.
The property manager can ask for a healthcare professional’s note tying the animal to a disability. However, you can only do this if the applicant’s or resident’s disability is not apparent. The note can come from someone in the healthcare field: a therapist, nurse, doctor, etc.
The practitioner’s note is unlikely to specify the nature of the resident’s disability, and the resident may not want to go into details either.
WHAT NOT TO DO
There are two things that can get you into big trouble. It can be easy to slip up without meaning any harm, so pay attention to the following:
- Never ask what the resident’s specific disability is or why they need the animal
- If it’s not obvious, ask for the note (see above section on the “nexus”)
- Never refer to an assistance animal as a pet, even if the resident does
RIGHTS OF A PROPERTY MANAGER/OWNER
For most emotional support animals, the person’s need is not apparent, so you can probably ask why they need the animal. Nonetheless, you may want to consult an attorney about specific cases, especially if you’re worried about restricting animal access in certain areas (e.g., pool area, fitness center, communal kitchens).
Property managers and owners may not:
- Apply breed or weight restrictions on service or support animals (but you can deny an animal based on its behavior)
- Put ownership conditions, barriers or restrictions (e.g., requiring pet insurance)
- Add fees or ask for a deposit
Property managers and owners may:
- Deny a request if it fundamentally alters the nature of your services
- Claim an undo financial and administrative burden (be specific)
- Provide evidence that the animal would cause extreme damage to the property
- Put up signs in common/office areas that say, “All assistance animals are welcome”
For more information on ESAs, check out he NAA Toolkit on Emotional Support Animals.
2. Laws that protect families with children
Families with children sometimes experience discrimination from property managers who do not want children in their units. Such intentional discrimination is called disparate treatment. For instance, it’s often illegal to target your advertising toward single people or couples without children.
We’re actually going to focus on something called disparate impact. Unlike disparate treatment, these are policies that seem neutral but nonetheless target an age group or protected class of renters.
If you want to dig into this topic, check out what NAA has to say: Disparate Impact and Fair Housing
THE WORDING OF YOUR POLICIES MATTER
Sometimes, you simply need to reword your policy to make it FHA compliant. Let’s say you have a rule intended to prevent trip hazards on balconies. You’ve noticed that children tend to leave their toys scattered around, so you implement a rule: “No toys on balconies.” The problem is that this rule targets children and could be seen as having a disparate impact on families.
You could simply reword the rule and include a non-discriminatory justification: “For safety purposes, keep balconies clear of obstructions.” This is a better approach because the rule applies to everyone. (Obstructions could be toys or anything else.)
WHO’S GOING FOR A SWIM?
As strange as it may sound, even when you have a child’s best interests at heart, a rule can still be discriminatory against them. For instance, no one thinks a three-year-old should be wandering around a swimming area unsupervised. But there is great difficulty in crafting a non-discriminatory rule.
NMHC lists swimming pool rules that courts have said violate fair housing laws. These include:
- Children under the age of 18 are not allowed in the pool or pool area at any time unless accompanied by their parents or legal guardian.
- Children must leave the pool by 6:30 pm and must be supervised by a resident relative at all times when using the pool.
Even changing “parent or legal guardian” to “adult over 18” may not be enough. After all, a 17-year-old trained lifeguard could reasonably supervise a child. In the above examples, courts did not feel there was enough of a safety threat to warrant the stated rule.
That said, you’ve probably seen rules like these (and you may have them yourself). Everything depends on your state and local laws. Your attorney can provide guidance on your specific situation.
GYM & LAUNDRY
If there’s any area of safety where age-related discrimination has held up, it is with regards to gym equipment. According to NMHC, the need for safety precautions in gyms is generally seen as obvious and compelling, but even so, property managers should abide by state and local laws.
On the other hand, restrictive laundry room rules have not always held up. It’s simply harder to make the case for imminent danger in a laundry room than it is in a gym with heavy equipment.
SO WHAT CAN YOU DO?
The pool, gym and laundry examples are meant to demonstrate how difficult it can be to establish non-discriminatory rules, even when a child’s safety may be at stake. In some cases, it is appropriate to call out a specific age group for a rule, but the reason for the restriction must be compelling. As a general rule: Always keep your language broad and inclusive, and state your specific justifications for each policy.
Be aware how you phrase each rule, not just the rule itself. Before making any rule that cold target a specific group — such as families and children — consult state and local laws, as well as your attorney. (We can’t emphasize that enough.)
3. Laws around occupancy standards
In 1991, HUD issued an influential statement known as the Keating Memo. This memo — and later the official 1998 law — sought to resolve an occupancy standard dilemma that property managers have faced since the Fair Housing Act was enacted in 1968.
Even if you haven’t heard of the Keating Memo, you’ve probably heard of the “two people per bedroom” policy. The memo wanted to provide simple guidance to a complex problem: How many people can live in an apartment? The guidance states that two people may occupy an apartment for every bedroom. So, a one-bedroom apartment could reasonably house no more than two residents.
If only it were that simple.
ONE MEMO DOES NOT FIT ALL
The open-endedness of the Keating Memo has proved to be a blessing and a curse. On the positive side, property managers have a clear path to deny residency to families or groups of adults with too many people per bedroom.
Based on the law, it seems like you could just say no to a family of five (two parents with three kids) trying to rent a two-bedroom apartment.
Sometimes this is true, but in reality, the complications are endless. What if…
- A couple moves in and later has a baby?
- The couple signs a lease and has an infant?
- The couple has a toddler? Is that different than a baby? When happens to the occupancy standard when they grow older?
- The unit is big enough to accommodate more than two people per bedroom?
These are not easy questions to answer. We’ll need to turn to the courts for further guidance.
CASE LAW ON THE ISSUE
NMHC notes that in the case of Rhode Island Comm’n for Human Rights v. Graul, “The FHA trumps the Keating Memo when the Memo’s guidance would be unreasonable … because the third occupant was a baby infant.”
This and other similar cases have established a common precedent: the Keating Memo can be used as a policy guide, but it is not enforceable as a liability rule. Courts will take in “a totality of circumstances” to determine whether the property manager’s occupancy rule counts as familial status discrimination.
TAKE THINGS ONE CASE AT A TIME
Every decision you make will have to fall within the limits of fair housing laws. Therefore, in accordance with case law on occupancy standards, you need to be able to review your policies on a case-by-case basis.
As with everything that relates to fair housing laws, document exceptions to your rules. Include full details and reasons for your actions.
START WITH GENERAL POLICIES & “SOFTEN” THEM AS NEEDED
Rigid occupancy restrictions should be avoided, especially if the size of each unit varies within a housing complex. Consider:
- Size and configuration of the units
- Age of the additional occupants
- State and local laws
- Any unique circumstance of the residents
4. Laws around criminal record screening
You should have a written and thoughtfully developed criminal screening policy. Tailor it to reflect legitimate concerns over convictions.
A legitimate concern is one that relates to the interests of a housing provider.
Related article: How to Prevent Fraud At Your Properties
Conducting criminal background screenings might seem safe enough, but a policy of not renting to those with past criminal records could unfairly target minorities. Criminal records-based barriers to housing are more likely to affect minority apartment seekers. Every criminal record needs to be taken into context.
Remember, a blanket policy that denies tenancy to people simply because of a prior conviction could violate fair housing laws. (Yet another example of disparate impact.)
HOW TO APPROACH CRIMINAL RECORD SCREENING
Here are some best practices for the resident screening process:
- Write down justifications for your policy
- Give greater weight to convictions that reflect specific housing concerns
- Allow an individual the opportunity to provide evidence of rehabilitation if they are declined for residency
- Provide detailed training to staff to consistently apply the screening policy and understand justifications for it
5. Laws around eviction screening
Approach eviction screening as you would criminal record screening, as minorities are statistically more likely to be evicted. You want every denial to be for a specific, legitimate reason(s).
Denial should not be related to prior discrimination based on race, religion, etc. Doing so, even unintentionally, could violate fair housing laws.
If you see an eviction in your applicant’s screening results, follow up with the landlord who evicted them.
Property management is as much art as it is science. You’ll have to navigate complex fair housing laws. These laws are often political in nature, and they change frequently. Play it safe and think about your long-term interests. Here are some tips from NAA on how to do just that:
- Have clear, written policies so your entire team can follow them
- Determine legitimate interests
- No automatic conviction exclusions
- Ignore arrests that did not lead to conviction
- Apply policies equally and consistently
- Narrowly tailor inquiries
- Train staff on your policy as well as updates to fair housing laws
Property management software can help
Yardi Breeze and Yardi Breeze Premier include several tools to help you keep accurate records. The texting and email features will permanently store communications in the cloud, making them easy to access at all times.
Breeze and Breeze Premier offer a unique notetaking tool, the Activity Feed, for special circumstances or events that don’t fit into other, predefined categories. You can use it to:
- Set reminders for recurring tasks
- Track tenants and transactions
- Add payments to your calendar from the Activity Feed
- Locate old notes quickly
- Monitor requests related to natural disasters, economic downturns or other unexpected situations
Please note that this article does not constitute or replace legal advice. We hope this information is helpful, and we encourage you to do more research. Consult an attorney for help on specific cases related to fair housing laws.