222 Week 3 F /For WIZARD KIM

Chapter 7

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G E T T H E S C O O P O N … Types of discrimination ■ Advertising mistakes

that can lead to a fair-housing complaint ■ Companion and service animals ■ Sexual harass- ment ■ Housing rights of tenants with disabili- ties ■ Avoiding common fair-housing complaints

■ Setting standards and selecting tenants the fair-housing way

Avoiding Fair-Housing Complaints

T his is an extremely important chapter and oneyou may want to read more than once. You mustcompletely understand fair housing before ever renting and managing your own investment proper- ties. This chapter helps keep you out of trouble within the day-to-day operations of your new business. You need to truly understand all forms of discrimination and avoid them.

It is crucial when renting a property that you avoid discrimination at all costs. There are many pit- falls, so it requires good policies, procedures, and practices, as well as a very good understanding of the fair housing laws on all levels. You want to under- stand and know your local, state, and federal fair housing laws to prevent unwanted fair housing com- plaints. In addition to your procedures, be sure to document everything you say and do, especially when you decline an applicant for good cause.

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110 PART IV ■ RENTING OUT YOUR PROPERTY

Understanding the law Since 1968, the Fair Housing Act has made it illegal to discrim- inate against a would-be tenant or homeowner. Now, federal agencies and housing advocates have stepped up enforcement. Since 1990, $180 million has been paid out in fair-housing com- plaints. This chapter gives you, your staff, or anyone who may work for you all the information needed about fair-housing compliance, so that you can avoid litigation. You need to make sure you never discriminate at any time.

Avoid housing discrimination by knowing and understand- ing the laws. According to the 1988 Fair Housing Act, you can- not refuse to rent to someone because of:

■ Race

■ Religion

■ Color

■ National origin or ancestry

■ Sex

■ Familial status (including children under the age of 18 liv- ing with parents or legal guardians, pregnant women, and anyone with custody of children under 18. There is an exemption to this law for housing for older persons)

■ A mental or physical disability

In addition, most state and local laws prohibit discrimina- tion based on a person’s age, marital status, sexual orientation, source of income, military status, and so on.

On the other hand, landlords are allowed to select tenants based on criteria that are valid business reasons. These include a required minimum income and positive references from previ- ous landlords, as long as these standards are applied equally to all applicants and tenants.

The Fair Housing Act covers most housing. In some circum- stances, the act exempts owner-occupied buildings with no more than four units, single-family housing sold or rented without the

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111CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

use of a broker, and housing operated by organizations and pri- vate clubs that limit occupancy to members. To find out more information, go to www.hud.gov and click on Fair Housing. There, you find publications you can download and forums to join. The site also contains links to every state so that you can locate an office in your area and look at highlights of what the Department of Housing and Urban Development (HUD) is doing in your state. To locate additional fair-housing informa- tion for the state in which your property is located, search the Web under “fair housing,” plus the name of your state.

Discriminating on the basis of any of the just-mentioned pro- tected classes is illegal. This is a federal law, which applies to everyone in the country. Keep in mind many states and local governments have passed their own legislation that may also apply to your rental property. Discrimination is a major issue and has serious legal consequences for the owner who is uninformed and discriminates, even if it is unintentional. Complainants don’t have to prove intent, so ignorance of the law is no excuse.

The Fair Housing Act and amendments prohibit landlords from taking any of the following actions based on race, religion, or any other protected category:

■ Advertising or making any statement that indicates a pref- erence based on group characteristics, such as skin color

■ Falsely denying that a rental unit is available

■ Setting more restrictive standards, such as higher income, for certain tenants

■ Refusing to accommodate the needs of disabled tenants, such as allowing a guide dog, a hearing dog, or service dog

■ Setting different terms for some tenants, such as adopting an inconsistent policy of responding to late rent payments

■ Not responding to maintenance requests for certain tenants

■ Terminating tenancy for a discriminatory reason

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112 PART IV ■ RENTING OUT YOUR PROPERTY

For additional examples, see the “Fair housing, then and now” section. You can be discriminating and not even realize it, just by being too nice. For example, you can be discriminating if you make an exception to your standards because a person is down and out and you feel sorry for him or her. You really want to help this person, so you make an exception to your normal policy for qualifying a tenant and allow them to move in without going through your normal qualification procedures like you always do for anyone else. Yes, discrimination comes in all forms, even when you are trying to help someone.

In a recent ten-year period, fair-housing discrimination cases investigated by HUD alone resulted in awards over $42 million. People always think, “It won’t happen to me!” That is simply not true. If you know the laws, have your policies and procedures in writing, and document everything, you should be able to prove you have not discriminated. But you must have good records and know what you can and cannot do. Know how to avoid a com- plaint against you, your on-site manager, an employee, or even an independent contractor you have hired to work on your building (see Chapter 6). You, the owner, are ultimately respon- sible for the actions of anyone working for you. Discrimination has serious legal consequences for the uninformed.

Fair housing, then and now Fair housing actually began in the United States in 1776, with the Declaration of Independence, which states, “all men are cre- ated equal.” Unfortunately, despite this solid foundation, dis- crimination persisted. Subsequently, it led to the enactment of

Watch Out!

The consequences of ignoring the laws and discriminating against tenants (or potential tenants), even if you do this unintentionally, are severe. Claiming ignorance is never an option, so read up on the laws, take classes, and so on. The penalties are large if you’re found guilty of discrimination. Many award settlements can exceed $100,000.

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113CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

many federal laws that directly affect rental housing. Some of these are the Civil Rights Act of 1866, the Civil Rights Act of 1964, Fair Housing Act of 1988, and the 1990 Americans with Disabilities Act.

Based on race, color, national origin, religion, sex, familial status, or handicap, a landlord cannot:

■ Refuse to rent

■ Refuse to negotiate for housing

■ Make housing unavailable

■ Falsely deny a dwelling is available

■ Set different terms, conditions, or privileges in the rental dwelling

■ Refuse to rent to disabled persons

■ Refuse to rent to disabled persons with assistance animals

■ Tell prospective tenants that because they have children, they can only rent a downstairs unit

It is also illegal to:

■ Threaten, coerce, intimidate, or interfere with anyone exercising a fair-housing right or assisting others who exer- cise such rights

■ Advertise, or make any statement indicating a limitation, or preference, based on race, color, national origin, reli- gion, sex, familial status, or handicap

■ For profit, persuade owners to sell or rent because of the presence of a person or persons of color or foreign nationality in the neighborhood (which is referred to as blockbusting)

The Fair Housing Act also specifically makes it unlawful to refuse to permit, at the expense of the handicapped person, reasonable modifications to existing premises occupied or to be occupied by such a person if such modifications are necessary to afford such person full enjoyment of the premises. With respect

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114 PART IV ■ RENTING OUT YOUR PROPERTY

to rental housing, the Fair Housing Act provides that a landlord may, where reasonable, give permission for a modification on the renter’s agreeing to restore the interior of the premises to the condition that existed before the modification, reasonable wear and tear excepted. The act also makes it unlawful to refuse to make reasonable accommodations in rules, policies, prac- tices, or services to afford a handicapped person equal oppor- tunity to use and enjoy a dwelling.

Keep in mind that there are private, non-profit organizations nationwide whose mission is to ensure equal housing opportu- nity. These organizations counsel and investigate claims of hous- ing discrimination and assist clients through the enforcement process. One of their primary investigative techniques is “test- ing.” Using paired, trained “testers,” one of whom represents the complaining party and the other a control tester, fair hous- ing groups can determine whether all applicants are being treated equally. Testers are often hard to detect, but if you’re doing your job correctly, you won’t show evidence of differential treatment. My suggestion is that you get to know the local fair- housing organization in your area. They often have helpful lit- erature on fair housing do’s and don’ts and can offer helpful advice on creating non-discriminatory policies. Be encouraged to call them whenever you have a fair-housing question.

Additionally, there are some state and local fair-housing laws. For example, the Unruh and Rumford Acts in California prohibit discrimination based on a person’s marital status, age, or sexual orientation.

It may first appear that property managers and owners must rent to anyone, but the law doesn’t convey this meaning. Landlords can select tenants using criteria based on valid busi- ness reasons, such a requiring good credit, minimum income, and good rental references from previous property managers and owners. The key is that these standards must apply equally to all applicants and tenants.

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115CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

Fair housing guidelines for advertising You already know your advertising must not contain anything indicating a limitation or preference based on a protected class as defined under both federal and state fair-housing laws. However, there seems to remain a bit of confusion in the industry as to whether you can use certain words or phrasing to describe resi- dences in your portfolio.

A 1995 internal HUD memorandum addresses this issue. The secretary’s report is still relied upon today by investigators and enforcement personnel, and is a good guideline for hous- ing providers. It doesn’t allow discrimination in advertising for a rental unit on the following basis:

■ Race, color, national origin Real estate advertisements should state no discriminatory preference or limitation on account of race, color, or national origin; advertisements that are racially neutral will not create liability. Thus, use of phrases such as “master bedroom,” “rare find,” or “desirable neighborhood” should be okay.

■ Religion Advertisements that use the legal name of an entity that contains a religious reference (for example, Rose Lawn Catholic Home), or those which contain a religious symbol (such as a cross), standing alone, may indicate a religious preference. However, if such an advertisement includes a disclaimer (such as the statement “This home doesn’t discriminate on the basis of race, color, religion, national origin, sex, handicap, or familial status”) it will not violate the act.

Bright Idea

The general rule is, “Describe the property, not the prospective residents.” If you aren’t sure whether your ad is in violation, have it reviewed by your attor- ney or call your local fair-housing office. Or, for the latest fair-housing news, go to www.hud.gov.

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116 PART IV ■ RENTING OUT YOUR PROPERTY

■ Sex Advertising for a single-family dwelling or separate unit in a multi-family dwelling should contain no explicit preference, limitation, or discrimination based on sex. Use of the term “master bedroom” doesn’t constitute a violation of either the sex or race discrimination provisions. Terms such has “mother-in-law suite” and “bachelor apartment” are commonly used as physical descriptions of housing units and don’t violate the act.

■ Handicap Real estate advertisements should not contain explicit exclusions, limitations, or other indications of dis- crimination based on handicap (for example, “no wheel- chairs”). Advertisements containing descriptions of properties (great view, fourth-floor walk-up, walk-in clos- ets), services or facilities (jogging trails), or accessibility features (wheelchair ramp) are lawful.

■ Familial status Advertisements may not state an explicit preference, limitation, or discrimination based on familial status. Advertisements may not contain limitations on the number or ages of children or state a preference for adults, couple or singles.

Fair-housing guidelines during interviews Often, landlords or property managers ask, “How can I be sure I’m treating all rental prospects equally?” The initial interview with prospective residents sets the stage for the rental relation- ship. Your responses and behavior at this critical stage of the relationship are the first indication the prospect has of your professionalism, and will either make or break the rental trans- action. Many fair-housing complaints are filed at this stage of the relationship. Why does this happen?

One of the errors most often made by landlords or property managers is to assume they know the potential tenant’s needs. For example, a person in a wheelchair enters your office. You may immediately assume that the prospect is not interested in renting anything but a single-level home. This is not necessarily

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117CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

the case and could be a dangerous assumption. Another exam- ple would be to assume someone of a particular ethnic back- ground would prefer renting in a neighborhood where there is a high concentration of that particular ethnicity.

The surest way to avoid these errors is to have a predeter- mined list of questions you ask each and every prospect prior to showing a property. The benefits of this approach are two-fold. First, you avoid the possibility of making inaccurate assumptions that could result in a claim of discrimination. Second, you save valuable time for both yourself and your prospect. After con- ducting a standard interview, you are well-equipped to deter- mine whether any properties in your inventory will suite the prospect’s needs.

You will find that during this interview process, the prospect will provide you with a great deal of information, expanding on the answers to the questions you ask, as follows:

My name is Melissa. What is your name?

May I have your telephone numbers?

How soon are you planning to move?

Do you have pets?

How many bedrooms and bathrooms do you need?

Do you require a garage?

What area of town are you interested in?

How many people will be occupying the property?

What is your rental price range?

Are you employed locally?

Watch Out!

Keep all of your notes from the very first contact through all of the process. If you ever have a fair-housing claim filed against you, you will be required to produce your notes on that applicant and maybe even some others. Remember to record the date and time on all documentation.

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118 PART IV ■ RENTING OUT YOUR PROPERTY

Do you need a fenced yard?

What other requirements in a rental property do you have?

Pay attention, listen, and take notes. At this early stage of the process, you will often be able to determine whether or not the prospect is able to qualify financially to rent from you. It is an efficient and fair way to handle all rental prospects. It also elim- inates the “no shows” for scheduled rental viewings, which can be not only frustrating but also a complete waste of your time.

Fair housing guidelines when showing your property and taking applications Property showings must be available to all interested parties. I answer questions when prospective tenants call regarding my vacancies, and these answers sometimes discourage them from wanting to see the property. However, the answers derive from the business requirements previously listed: the size of the prop- erty, the location, the list of amenities, or other non-discrimina- tory issues. The caller makes the determination and decision on whether to go see the property, based on individual needs.

Offering different terms and conditions to different parties is one of the major offenses many landlords commit. My com- pany communicates the same terms and conditions for renting the property to all perspective applicants. If the terms change, everyone receives the same information.

The rental application supports fair housing, and I issue the same documents and requirements to all perspective tenants. Upon receipt of each application, the processing procedure is the same for everyone. Acceptance or denial is always the result of valid business requirements.

It is not always an easy task to avoid discrimination. The majority of today’s tenants are aware of the fair housing laws and the procedures to file complaints. There are many organizations available to assist them. However, I work diligently to avoid unfair practices and to prevent unwanted lawsuits or claims.

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119CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

Determining occupancy restrictions Many property managers restrict the number of people who can live in a home. The justifications for occupancy standards are numerous, and on the surface the policy may appear to be fair. However, numerous fair-housing complaints have been filed as a result of occupancy restrictions, which had the effect of dis- criminating against families with children.

Different states have different laws covering occupancy stan- dards, which is known as the state or local uniform housing codes. The California guideline (not law) is two people per bed- room plus one. Common sense and reason have to be used. If you have a 1,250 sq. ft. 4-bedroom home, nine people sounds excessive. However, five people in a 1,250 sq ft. 2-bedroom 2-bath home with a den may be reasonable.

The Federal Fair Housing Act doesn’t prohibit state and local entities from adopting restrictions on the number of peo- ple who occupy a dwelling. The act allows “reasonable” govern- ment restrictions on occupancy, as long as they apply to all occupants and don’t discriminate on the basis of race, color, religion, national origin, sex, familial status, or handicap. HUD, the federal agency charged with administering the Fair Housing Act, has never adopted occupancy standards, and there is noth- ing in the act that indicates intent to develop such standards. This has been a source of concern for housing providers for many years. Many of us have urged HUD to develop guidelines, which would, in the absence of state and local regulations, dic- tate a maximum occupancy level.

Bright Idea

When drafting any rule for your property, consider its purpose. Is the rule intended to preserve, protect, and enhance your property value? Does it apply to all renters? Does it address a specific problem, providing a specific solu- tion that’s rational and fair? Above all, does it employ common sense?

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120 PART IV ■ RENTING OUT YOUR PROPERTY

Some property managers use the standard of two people per bedroom, plus one extra person per household. The National Association of Residential Property Managers (NARPM) wrote a position paper adopting this standard as a fair and reasonable occupancy standard. Keep in mind, however, if the dwelling is exceptionally large or would easily accommodate additional persons, this policy could easily be challenged if a complaint of child discrimination were filed and investigated.

Avoiding steering Steering is a form of discrimination. Steering is when you attempt to guide an applicant toward living where you think he or she should or may want to live, based on group identity. Steering is illegal and absolutely not allowed.

A common thing that owners do is to try to direct, suggest, or steer a prospective tenant who has a family to a particular loca- tion. Although you may think you’re doing the right thing, this is illegal and a common complaint received by fair housing.

Steering can be subtle, accidental, or very direct. You must be careful not to make suggestions or comments that someone may misinterpret. Always show all units available and let prospects decide where they would like to be.

Avoiding linguistic profiling You may have recently heard the term “linguistic profiling” as it relates to housing discrimination. It is making news across the country, and there is new research to substantiate its existence.

Do you draw conclusions about someone’s race, sex, age, sexual orientation, or other traits by the sound of his or her

Watch Out!

If you decide to adopt an occupancy standard, make sure that it is reasonable and is evenly enforced with all renters. Never specify how many adults and how many children are allowed. Always refer to the total number of people.

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121CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

voice? New research points to the fact that, by an overwhelming majority, people do exactly that.

What does this mean to the world of rental property? It demonstrates even further the necessity to establish and abide by consistent and fair practices when handling rental inquiries. Not only do you need to be sure you return all calls promptly, but you should be sure you’re treating all callers in the same manner. Many people use a script or needs-assessment form when discussing available rentals with potential tenants. Use of these standardized forms and methods provides assurance that all callers receive the same information in the same way.

But perhaps the three most valuable procedures are these:

■ Return every voice message call. No matter what! There should be no excuse not to return a call from someone who was interested enough in your property that they called you. Not only is failing to return calls rude and bad business, it is now potentially dangerous. Instruct your staff that every message will be responded to promptly and pleasantly, and that they should make a record of it.

■ Always conclude with an invitation. Be sure that at the end of any conversation that an invitation is extended to the prospect. Again, no matter what! The conversation could be misconstrued as discriminatory is some way, through no fault of the leasing agent, and the fastest way to correct that misrepresentation is to invite the prospect to visit. “Even though we don’t have any two bedroom apartments now, you are still welcome to visit us . . . may I set up an appointment?” or “Would you still like to visit us even though we don’t have tennis courts? If so, let’s make an appointment. . . .” Something like this can be an insurance policy for you as the landlord. If the prospect declines the invitation, this should be noted accordingly.

■ If you have staff or an on-site manager, test that person. From time to time, check to be sure that your employees

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122 PART IV ■ RENTING OUT YOUR PROPERTY

are following the just-mentioned procedure. Have differ- ent people leave messages, asking to be called back. Have them call and ask about an amenity you don’t have and see how your on-site manager handles this. If calls are returned and invitations are issued, reward your manager. If you find a problem, work with your manager or find someone who will not put you at risk. Bottom line: Treat everyone equally.

Avoiding unintentional discriminatory practices When drafting policies and procedures, it is important to recog- nize how others may perceive your policies. Does a policy appear to discourage occupancy by one or more protected classes under the Fair Housing Act? The majority of discrimination claims filed today are the result of unintentional discriminatory practices and/or statements. Discrimination is no longer strictly a case of blatant expression of racial bigotry. More often than not, the accused is not even aware that their actions were perceived as discriminatory. You, your property manager, any on-site man- ager, or other employee are all at risk for a fair-housing claim.

I urge you to take a good, hard look at rental policies and procedures, which should be in writing and be updated often. Put your policies to the test. Play devil’s advocate for a moment and examine your policies under the following criteria:

■ Could the policy be perceived as discriminating against a protected class under the Fair Housing Act?

■ If so, is there a clear business justification for the policy?

■ Is there no less-discriminatory alternative?

■ Are you being fair to all parties involved?

Use of the pool A rule I often see in multi-family properties (apartments and condominiums) concerns the use of the common swimming

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123CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

pool. There are many variations of the rule, but it serves to limit the use of the pool by children during certain hours of the day. Example: “Adults only between 8:00 p.m. and 10:00 p.m.” What is the purpose of this rule? Property managers have explained that the rule allows peaceful enjoyment of the pool by those who want to swim, rather than play. Dedicated swimmers know that they can work out between those hours without the inter- ruption of pool toys and roughhousing. Those who wish to play in the pool have many hours to do so each day. This rule seems to have a clear business justification, doesn’t it? After all, every- one residing in the community has a right to enjoy the facilities. Is there a problem with this rule?

Let’s examine the rule under the criteria just mentioned. Could the rule be perceived to discriminate against a protected class? The answer is yes! It appears to discriminate against fami- lies with children. I’ve already established the business justifica- tion for the rule — allowing peaceful enjoyment of the facilities for all residents. Is there a less-discriminatory alternative? Yes! Rather than saying “adults only” between 8:00 p.m. and 10:00 p.m., you could say, “Lap swimming only” between those hours. This simple change in language removes the discriminatory nature of the rule and accomplishes the business goal of allow- ing peaceful enjoyment of the pool that is fair to all people.

Renting to roommates Some owners or property mangers have a policy whereby married couples need only submit a joint application to rent while unmar- ried persons must each apply separately. Is there anything wrong with this policy? You apply the criteria again: Does the policy

Watch Out!

Be sure to always offer an application to each and every person who comes to view your available unit. Take care when you start ask questions, as it is really easy to ask a discriminatory question when you’re just trying to be friendly.

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124 PART IV ■ RENTING OUT YOUR PROPERTY

appear to discriminate against any protected class? Unless your state lists “marital status” as a protected class, the answer is prob- ably not. However, is it possible that a same-sex couple could per- ceive this policy as limiting housing opportunities to them because of their relationship? Is there a clear business justifica- tion for an application policy favoring married people? Very ques- tionable. Is there a less discriminatory alternative? Yes. You can require a separate application from potential residents over 18 years of age, regardless of their marital status.

With this simple change in policy, you accomplish a great deal. Not only do you treat all applicants the same, regardless of their marital status, but also you gain additional background information of your adult residents. When it comes time to enforce the terms of the rental agreement, the more informa- tion, the better!

Laws that protect tenants with disabilities The federal Fair Housing Act prohibits discrimination against people who:

■ Have a physical or mental disability that substantially limits one or more major life activities (could be hearing, eye- sight, physical disease, mental illness, mental retardation, and so on)

■ Have a history or record of a disability

■ Are regarded by others as though they have such a disability

Discriminatory questions and actions Landlords aren’t allowed to ask whether or not the applicant or tenant has a disability or illness, or ask to see medical records. Even if the disability is obvious (for example, the applicant uses a wheelchair or wears a hearing aid), it is nevertheless illegal to inquire about the severity of the disability. In short, you cannot

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125CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

treat a tenant with a disability differently than you treat other tenants.

For example, if there are two units for rent — one on the ground floor and one three stories up — you must show both units to the applicant who uses a wheelchair, however reason- able you think it would be for the person to consider only the ground-floor unit. That is not your choice or decision to make for the applicant.

Modifications Landlords must allow disabled tenants to make reasonable mod- ifications to their living unit or common areas at the tenant’s expense, if needed for the person to comfortably and safely live in the unit. Disabled tenants have the right to modify their liv- ing space to the extent necessary to make the space safe and comfortable, as long as the modifications will not make the unit unacceptable to the next tenant (e.g., widening an entrance) and if they agree to undo the modification when they move out. A tenant cannot be required to undo modifications to common areas. However something like raising the cabinets to the origi- nal level upon move out would be a reasonable requirement.

Examples of modifications undertaken by a disabled tenant include:

■ Installing a ramp to allow wheelchair access

■ Installing special handles and rails in the bathrooms and inside the tub and shower enclosures

■ Lowering countertops for a tenant using a wheelchair

■ Modifying locks so that someone in a wheelchair can either remotely open and close the doors or the locks are placed in a lower part of the door.

■ Installing or modifying special appliances to accommodate a blind tenant

■ Installing special faucets or door handles for persons with limited hand use

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126 PART IV ■ RENTING OUT YOUR PROPERTY

All modifications must be reasonable and require prior approval before your tenant may make any changes. You are allowed to require the tenant to obtain the proper permits and pay an additional deposit as a guarantee that the unit will be restored to the condition in which it was found.

You can require proof of a disablility, which would be a cer- tification letter from the disabled tenant’s doctor, but this proof doesn’t need to specify or explain the disability.

When a pet isn’t a pet Ordinarily, property owners have the right to refuse animals. However, there is a specific circumstance when an animal can- not be denied and is not considered a “pet.” When a disabled person with an assistance animal applies to rent a property, a landlord cannot refuse to rent to the prospective tenant because of the animal.

Under federal, state, and local fair-housing laws, individuals with disabilities may ask their housing provider to make reason- able accommodations in the “no pets” policy to allow for their use of a companion/assistance animal.

What defines a service animal? A service animal is one individually trained to do work or per- form tasks for the benefit of a person with a disability. A service animal can be any breed or size. It may wear specialized equip- ment such as a backpack, harness, special collar, or leash, but this is not a legal requirement.

How do you determine whether it truly is a service animal? Housing providers may ask an applicant or tenant to provide doc- umentation from a qualified professional that the individual has a disability and requires a service animal as an accommodation.

Housing providers may not ask an applicant or tenant to provide:

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127CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

■ Any details about the applicant’s/tenant’s disability

■ Medical records

■ Proof of training (such as a training certificate)

Service animals are normally trained to assist the disabled person with individual needs relative to that person’s disability. While some animals receive certification papers, others don’t. It is legitimate for a person with a disability to train his/her own service animal. There is currently no national standard with which to evaluate the training or performance of any type of ser- vice animal, including guide dogs. You may not require the dis- abled tenant to provide proof of the service animal’s training.

What about additional deposits for the service animal? A service animal is not a pet and you cannot lawfully require any additional deposits. What can be done if there is damage by the service animal? The tenant is responsible for the actions of his/her animal and can be held accountable for any damage to your property. Additionally, the tenant must comply with any of your established policies such as cleanliness and maintenance of the unit as well as leash requirements and noise guidelines. In most cases, however, assistance animals are usually well-behaved.

You cannot refuse to rent to disabled tenants and their ser- vice animals, but as the property manager, you require them to process through your usual screening practices.

Remember, a property owner doesn’t have to rent to a poorly qualified tenant, disabled or not.

Bright Idea

Fair-housing classes are provided by HUD, local apartment associations, and private fair-housing organizations. There are also publications that you can subscribe to, such as the Fair Housing Advocate (at www.fairhousing. com). Stay up to date as laws change.

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128 PART IV ■ RENTING OUT YOUR PROPERTY

Fair housing and sexual harassment Fair housing and sexual harassment? Do they really have any- thing to do with one another? Absolutely, and the courts con- tinue to expand on the connection.

Housing law recognizes two types of sexual harassment claims:

■ A conditioned tenancy or quid pro quo claim, which in non-legalese means making a sexual demand on a resident in order for that resident to get needed maintenance on the apartment, to get a rent concession, or to avoid an eviction.

■ A hostile environment claim, which can give rise to claims concerning the psychological well-being of a resident who can demonstrate such a situation.

Furthermore, fair-housing law has been broadly applied to define sexual harassment as a violation of the Fair Housing Act prohibition against sex discrimination and, of course, the FHA provides for significant financial punishment and penalties for violations. So in theory, sexual harassment within the context of the landlord/tenant relationship can be financially costly to you.

Some fair-housing lawyers have worked to charge landlords with criminal battery, as well as for violations of the sexual preda- tor laws. In fact, one landlord was successfully convicted of the latter.

Don’t ever abuse the power you have over residents. Sexual harassment doesn’t stop with the owner, but in fact

extends to anyone the owner hires, including anyone perform- ing maintenance on the rental property. You need to have a clear, written policy with all of your contractors about sexual harassment.

Also consider a policy encouraging and allowing employees or maintenance professionals the opportunity to leave a unit at any time they believe the situation is inappropriate. If a resident

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129CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

is making comments or gestures, or touches an employee, or if the environment itself is threatening (a hardcore pornography video being played, as a real-life example), no one should have to remain and deal with that.

■ In return, the maintenance employee should be required to immediately notify management of the scenario and advise management that he or she has left the unit and why.

■ Respond to the input from your maintenance profession- als that they are uncomfortable with a particular resident, and either send someone else to complete work orders or send someone to accompany your employees.

■ Insist that no maintenance professional will ever be in an occupied unit unless there is a written work order (emer- gencies excepted — fire and flood!). If a resident entices your employee into the unit and the employee doesn’t respond as hoped for, that resident is likely to contact management and accuse the employee of wrongdoing. Without a written work order, your employee could be in a dangerous situation.

■ Make it clear to residents and maintenance professionals alike that unless there is an emergency (fire or flood), no maintenance professional will be alone in the unit with someone’s minor child. To require otherwise offers the potential to have your employee’s professional and per- sonal life ruined.

Watch Out!

If the fear of losing vast sums of money is not a motivating factor to avoid sexual harassment, what about jail time? One current idea is to charge land- lords under laws related to prostitution. How? With the argument that requir- ing sex for rent or other benefits is in effect coercion into prostitution.

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130 PART IV ■ RENTING OUT YOUR PROPERTY

A wise landlord will consider these ideas and develop a writ- ten policy to incorporate them. Why? Well, actually, there are three reasons. First, it is the right thing to do. Second, if the first reason doesn’t motivate you, then how about this: Your failure to protect your employees from sexual harassment (or worse, to expect them to take it) can result in your being sued by your own employees! And finally, industry surveys consistently show that your number-one resident retention tool is your profes- sional maintenance staff. And isn’t it just good business to pro- tect your assets?

Conducting your rental business with good, fair-housing policies is a must. Take the time to know the laws, have written policies and procedures, and always treat everyone fairly and equally.

What to do if a discrimination complaint is filed against you If a discrimination complaint is ever filed against you, be sure to do the following:

■ Respond immediately.

■ Gather together the pertinent paperwork and present your case.

■ Consider agreeing to helpful suggested remedies, such as fair-housing training for all staff.

■ Insist on neutrality on the part of the enforcement representative.

Bright Idea

Consider having your application and policy and procedures done in other lan- guages that are dominant in your area. In California, having an application and letting the applicants know what is expected in Spanish really helps. In other areas, other languages may make sense.

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131CHAPTER 7 ■ AVOIDING FAIR-HOUSING COMPLAINTS

Just the facts ■ Fair housing violations are extremely serious and can be

costly.

■ There are many different forms of discrimination: Local, state, and federal laws vary.

■ There are specific fair-housing requirements for advertising — avoid discriminatory wording.

■ Be careful when setting occupancy standards.

■ Steering a tenant to a particular apartment or neighbor- hood is illegal.

■ Tenants with disabilities have the right to make the unit accessible and useable with your prior approval and are required to return the property to the same condition it was in prior to move-in.

■ You must allow a tenant to have a service or companion pet.

■ You may not ask a tenant or applicant the nature of the disability.

■ Many landlords discriminate unintentionally, which is not protection from the law.

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