Practicing More Property Management? Take Another Look at Fair Housing Law

If you find your real estate practice expanding into the management and marketing of rental properties and the securing of tenants for your owner clients, you should make it a point to refresh your knowledge of Fair Housing law.

Tenant rights and leasing and rental agreements are key areas of federal and state Fair Housing laws and an understanding of how the law treats them will enable you to provide your clients with appropriate counsel and to steer clear of possible legal issues.

The original Fair Housing Act (Title VIII of the Civil Rights Act of 1968) and the Federal Fair Housing Amendments Act of 1988, together, prohibit discrimination in the sale, rental or advertising of a dwelling on the basis of race, color, religion, sex, national origin, familial status (such as the presence of children under 18 years old and pregnant women), or handicapping conditions. The North Carolina Legislature enacted the State Fair Housing Act, found in Chapter 41A of the General Statutes, which conforms to federal law. It empowers the North Carolina Human Relations Commission to enforce the laws.

Take note that under these laws, whether you are involved with a sale or a rental, it is unlawful to take any action which results in discrimination or to allow others to act in such a manner. Examples include:

Refusing to rent or sell housing;

Refusing to receive or transmit a bona fide offer to engage in a real estate transaction;

Making housing unavailable;

Denying  a dwelling;

Setting different terms, conditions or privileges for the sale or rental of a dwelling;

Providing different housing services or facilities;

Falsely denying that housing is available for inspection, sale, or rental;

For profit, persuading owners to sell or rent (blockbusting); or

Denying anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.

If you discover that the property owner, tenant, seller, or buyer that you represent intends to discriminate based on any of the protected classes, you must immediately consider terminating your agency agreement with that party or risk violating the law and losing your license. Intent has no impact on whether the broker is subject to penalty under the Fair Housing Act; the Human Relations Commission has sought civil damages and penalties against individuals whose conduct or statements merely implied or tended to suggest discriminatory intent.

Managing rental properties involves the accommodation of needs resulting from physical or mental disabilities.  People with hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, and mental retardation, disabilities that limit one or more major life activities, are protected under both state and federal statutes. Thus, it may be necessary for the property owner to modify a dwelling at the disabled person’s expense or allow a disabled tenant to do so.

Modifications to accommodate tenant disabilities within a dwelling may require the tenant to restore the unit to the original condition if the modifications interfere with the landlord’s or future tenants’ use of the premises. External changes, however, such as a wheelchair ramp leading up to an entrance, are precluded from restoration when the lease or rental terminates.

It is unlawful to refuse to make reasonable accommodations in rules, policies, practices or services if necessary for the disabled person to use the housing.  Below are a few important examples of necessary accommodations you may need to tell a landlord:

A building with a no-pet policy must allow a visually impaired tenant to keep a guide dog. A therapy animal must be allowed to reside with a tenant who produces evidence of a prescription or note from their doctor or therapist regarding their need for the animal.

An apartment complex that offers tenants ample, unassigned parking must honor a request from a mobility-impaired tenant for a reserved space near the tenant’s apartment, if necessary, to ensure access.

Familial status is another protected class under the housing laws. Unless a community qualifies as housing for older persons, it may not discriminate based on familial status. This means you cannot discriminate against families in which one or more children under the age of 18 live with:

A parent;

A person who has legal custody of the child or children; or

The designee of the parent or legal custodian, with the parent or custodian’s written permission.

Familial status protection also applies to pregnant women and anyone securing legal custody of a child under 18.  An apartment complex violates the law if it attempts to segregate families with children to a certain building or area in the complex.

Foreclosures and Tenant Termination Rights

The law in North Carolina allows tenants residing in a property, containing less than 15 rental units and being sold in a foreclosure proceeding, to terminate the lease and move out without penalty or breach of the lease. The only requirement under this law, found in N.C.G.S. §42-45.2, is that the tenant must set the termination date at least 10 days or more after the date the notice of sale is filed with the Clerk of Superior Court.

With foreclosures, tenants may not want to move out immediately after a foreclosure sale.  Given the volume of foreclosures in recent years, a federal law known as the Protecting Tenants at Foreclosure Act of 2009 was enacted, which allows some residential leases to survive a foreclosure. Thus, tenants have the option to remain in their home until the end of their current lease and month-to-month tenants are entitled to a 90-day notice before having to move out.  However, in cases where the buyer of the foreclosed property intends to live in the property instead of buying it as an investment or rental property, the law allows the buyer to terminate any remaining lease term, but still affords the tenant a 90-day notice to vacate the home.

Without a doubt, one or more of the laws discussed above will govern many of the real estate transactions every broker encounters. Having knowledge of these laws and ensuring that others understand their rights and obligations under these statutes will help protect consumers and make you a better real estate broker. Should you have any questions or concerns about a real estate transaction that concerns fair housing laws, the North Carolina Human Relations Commission may be reached at (919) 807-4420 or toll free at 1-866-324-7474.

This article came from the May 2012-Vol43-1 edition of the bulletin.