- The Washington Times - Wednesday, January 21, 2004

So you got the foreclosure at a good price and fixed it up under budget and on time, and now you just need to get a good renter to start raking in the cash. Before you start eliminating applicants from your pool of tenants, make sure you are eliminating for all the right — and legal — reasons.

Federal fair-housing laws prohibit you from discriminating against potential renters in seven categories: race, color, national origin, religion, sex, familial status and handicap.

Local and state laws might include other fair-housing categories, such as sexual orientation, age, education, political affiliation, appearance, source of income and others.

Research your local fair-housing laws before accepting your first application.

The Fair Housing Act covers most housing, according to the U.S. Department of Housing and Urban Development (www.hud.gov). In some circumstances, various types of properties are exempt from the act, including owner-occupied buildings with no more than four units, single-family housing sold or rented without a broker, and housing operated by organizations and private clubs that limit occupancy to members.

Outside of these special circumstances, you cannot do the following based on the protected classes:

• Refuse to rent or sell housing.

• Refuse to negotiate for housing.

• Make housing unavailable.

• Deny a dwelling.

• Set different terms, conditions or privileges for sale or rental of a dwelling.

• Provide different housing services or facilities.

• Falsely deny that housing is available for inspection, sale or rental.

• For profit, persuade owners to sell or rent (blockbusting).

• Deny anyone access to or membership in a facility or service (such as a multiple-listings service) related to the sale or rental of housing.

The Fair Housing Act was written to protect people in the enjoyment of their housing, as well; thus, it’s also illegal for anyone to:

• Threaten, coerce, intimidate or interfere with anyone exercising a fair-housing right or assisting others who exercise that right. This means a person cannot harass a neighbor because of his or her color or familial status or the other protected classes.

• Advertise or make any statement that indicates a limitation or preference based on these classes. For instance, advertising your property as “great for single adults,” may violate the Fair Housing Act.

If you violate the Fair Housing Act, you could find yourself up against some very stiff consequences, including payment of fines, retribution payments to the claimant and even the attorney expenses.

The Fair Housing Act also allows fair-housing groups who sue on behalf of victims to sue for legal expenses. So if you discriminate, you’re not facing a possible lawsuit from just the victim, but the government and nonprofits, as well.

The bottom line is to treat everyone the same. Don’t enforce rules for one group to follow and bend them for another. As you qualify potential tenants, RentGrow.com, a background-checking organization that processes rental applications, suggests following these criteria:

• Check the credit history.

• Consider the extent of credit established. It’s not good enough to just have credit.

• Consider income. Is there any? How deep in debt is the applicant?

• Check length of housing history. Is it stable and long-term; did they pay rent on time?

• Verify rental experience. The screener should call past rentals. Is the rent current? Were they asked to leave? Would the applicant be welcome back?

• Determine length of employment history. Have they demonstrated a stable work habit? Will they continue their employment so rent can be paid?

• Verify employment. The property manager wants to know if the salary statements, including length of time on the job or in the position, are accurate.

• Search criminal records.

• Search eviction records. This checks for judgments filed at the courthouse and any evictions from the past.

• Determine co-applicant status. Not only do you want to feel comfortable with the roommate, but also, can this person help or hurt the primary applicant in qualifying for renting that next penthouse condo?

As you can see, none of these questions was based on the seven fair-housing classes. Following these processes can save you a lot of trouble and give you a worry-free investment experience.

M. Anthony Carr has covered real estate for more than 15 years. Reach him by e-mail (anthonycarrerols.com).

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