The $100,000 Mistake Many Landlords Unintentionally Make
- Christian Bryant
- Apr 8
- 3 min read
FHA Violations – Unfortunately, even good landlords commit them
As I travel across the country conducting educational sessions for landlords, I frequently encounter alarming stories about landlords who inadvertently violate the Fair Housing Act (FHA). These incidents resonate deeply with me because, had these landlords participated in my FHA training, they could have easily avoided such errors. However, it's important to note that not all FHA violations are unintentional. Unfortunately, a small fraction of landlords engages in practices that tarnish the reputation of the entire industry.
Earlier this year, the FHEO Annual Report on Fair Housing was released, summarizing HUD/FHA-related data for the fiscal year spanning July 2015 to June 2016. The report revealed 8,385 FHA violation complaints, with about 800 landlords found in violation, resulting in $25,297,453 in civil penalties and fines. This translates to an average fine of nearly $30,000 per violator. It's crucial to note that HUD civil penalties have maximum limits ranging from $19,787 to $98,935 per violation, depending on the specifics of each case. Additionally, these figures do not encompass the plaintiffs' actual damages, legal fees, or punitive damages, which can escalate from $10,000 to millions in severe cases.
When considering the legal costs incurred by defendants in defending against such allegations, the total financial burden can quickly exceed $100,000. Many landlords manage fewer than five units, and an expense of this magnitude can lead to bankruptcy and foreclosure. For those who engage in intentional discrimination, I have no sympathy. However, it is disheartening that even well-meaning landlords can face penalties for seemingly innocuous actions, such as advertising a property as ideal for families with children due to its proximity to a reputable school.
Over 75% of complaints filed were related to some form of discrimination, affecting terms, conditions, privileges, facilities, advertising, and/or statements. This indicates that most violations occur even before a tenant submits an application. To thoroughly understand FHA and discrimination laws, attending a continuing education class is essential. This article only scratches the surface of the knowledge you need.
I can provide you with a general guideline to help you avoid the most frequent unintentional FHA violations. A landlord's responsibility is to present factual information that allows tenants to make informed decisions. Landlords should refrain from influencing those decisions. When crafting your property advertisement or responding to inquiries, it's vital to adhere to this principle. Did you focus on the facts, allowing the tenant to determine what is suitable for them? Often, this hinges on your choice of words. A common error I observe is when landlords promote a unit located near a school.
Incorrect: “Fantastic rental unit across the street from Lincoln Elementary, perfect for families with young children.”
Correct: “Fantastic rental unit across the street from Lincoln Elementary School.”
The first example may lead potential tenants without children to feel excluded, while the second example sticks to the facts, allowing all prospective tenants to draw their own conclusions. By simply adjusting your wording, you can promote the positive aspects of your unit without inadvertently violating FHA regulations. This approach empowers tenants to decide if your property meets their needs without any bias.
I fully support the FHA and discrimination laws and am not advocating for their modification. These regulations exist to protect vulnerable individuals. My aim is to highlight the risks landlords face and the necessity of regular attendance at continuing education classes. Simple measures can safeguard you, but it's essential to recognize that you may not be aware of what you don’t know.
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Christian Bryant
President of NWRPM / Property Management and R.P.M. Education
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