6 Keys to Avoiding Complaints in Fair Housing
Let’s say you have a biker gang who wants to rent several units in your apartment complex. Are you allowed to say no? What if you like biker gangs and want more of them—can you exclude everyone else?
We recently worked with a property owner who ran into exactly this situation. In their case, they wanted to say no.
Situations like this need to be evaluated carefully, because if any of the applicants are part of a protected class, saying no for the wrong reason can invite real trouble. You need a good, defensible reason for turning someone away—especially when a protected class is anywhere in the picture.
Recent enforcement trends make one thing clear: fair housing risk is not theoretical, and it does get enforced. Before you’re the one being investigated, make sure you’re compliant.
1. The Foundation: What Fair Housing Actually Requires
A common misconception is that fair housing means treating everyone identically. It doesn’t—fair housing is about equal opportunity, not identical treatment. In some situations, it actually requires treating people differently, such as when you’re providing a reasonable accommodation for a disability.
Under federal law, protected classes include:
- Race
- Color
- National origin
- Religion
- Sex
- Familial status
- Disability
HUD also treats sexual orientation and gender identity discrimination as a form of sex discrimination. Pennsylvania law adds age (40+) as a protected class, and many municipalities go further still, adding categories like marital status, veteran status, domestic violence victim status, and—importantly for investors—source of income.
2. Source of Income: Not Federally Protected, But Watch Local Law
At the federal level, source of income is not currently a protected class under the Fair Housing Act. That means federal law does not require landlords to accept Housing Choice Vouchers (Section 8) or other rental assistance purely as a matter of protected status. Our earlier piece on the myths and truths of the Section 8 housing voucher program covers how these programs actually work.
Some Pennsylvania municipalities do treat source of income as a protected class, though. In those jurisdictions, refusing to rent to a qualified applicant because they use a voucher or rental assistance can trigger liability.
Philadelphia is currently the largest jurisdiction where source of income is protected, and other municipalities—notably in the Pittsburgh region—have worked on similar rules. However, the Pennsylvania Supreme Court has found that local ordinances on source of income impose requirements not allowed under the state’s home-rule laws, which preempts local source-of-income protections and leaves investors in an uncertain spot in some locations.
This is exactly where investors get into trouble: a blanket “no Section 8” policy may be lawful in one township and illegal two miles away. Your screening criteria need to match the jurisdiction where the property actually sits.
Takeaway: verify local municipal ordinances before implementing or advertising a voucher policy, avoid applying income-verification standards inconsistently, and if you ask for income documentation, require the same categories of documentation from every applicant.
3. Disparate Impact: The Quiet Risk
Sometimes a well-intentioned policy still lands unevenly. For instance, research has shown that Black and Latino men are incarcerated at higher rates than other groups, so a heavy-handed criminal background check policy can end up affecting these groups more than others—regardless of intent.
There’s an important distinction in how this plays out:
- Disparate treatment — intentional discrimination (“I won’t rent to you because…”)
- Disparate impact — a neutral policy that disproportionately affects a protected class
A few examples: a criminal background policy that disproportionately excludes one racial group, an occupancy policy that indirectly excludes families with children, or a credit requirement that screens out voucher holders at a higher rate than other applicants.
Even a facially neutral policy can be challenged if it creates a discriminatory effect and isn’t necessary to serve a substantial, legitimate, nondiscriminatory business interest.
Federal enforcement priorities around disparate impact have shifted before between administrations, and that pattern is likely to continue. A lighter enforcement posture at the federal level doesn’t mean the doctrine disappears—courts still recognize it, and state agencies and private fair housing organizations keep bringing claims regardless of who holds federal enforcement authority. Investors shouldn’t treat political cycles as a risk management strategy.
Best practice: make sure policies are narrowly tailored, document the business justification behind your screening standards, and conduct periodic internal reviews of your approval and denial patterns. If you can’t articulate the legitimate business purpose behind a policy, revise it.
4. Sexual Harassment and Liability
Sexual harassment continues to generate some of the largest landlord verdicts and settlements in fair housing. HUD receives more than 30,000 complaints annually, with thousands more filed through state and local agencies, and landlords routinely face six-figure settlements. Recent large losses have included awards exceeding $600,000, with sexual harassment and disability discrimination among the top categories.
Landlords are automatically liable for their employees’ conduct (vicarious liability), and can also be liable for tenant-on-tenant harassment if they knew about it and failed to act. A complaint process alone isn’t enough—prevention, training, and a swift response are what actually limits exposure.
For multifamily owners, that means a written anti-harassment policy, a clear reporting structure, mandatory staff training, and a documented investigation process. Working closely with your property manager on these policies is one of the most effective ways to keep them consistently enforced.
5. Disabilities, Accommodations, and Assistance Animals
Disability claims remain the largest single category of fair housing complaints nationwide. A disability includes any physical or mental impairment that substantially limits a major life activity.
A few key points: reasonable accommodations, meaning policy changes, are paid for by the landlord, while reasonable modifications, meaning physical changes, are typically paid for by the tenant unless the property is public housing. Assistance animals are not pets—they’re defined as animals trained to perform a task related to a disability, and you cannot charge pet rent or a pet deposit for one.
You are allowed to ask for documentation of a disability rather than accepting a blanket claim of “emotional support animal.” To qualify as an assistance animal, the person must have a diagnosis from a medical practitioner confirming a disability, and the animal must be trained to perform a task tied to that disability.
The interactive process for accommodation requests is critical—never deny a request without exploring alternatives. For example, if a tenant with a disability says the rental office isn’t accessible for their monthly payment visit, what does the landlord need to do? Often a simple, low-cost fix—like installing a doorbell outside the steps so a receptionist can step out and meet the tenant—solves the problem. Stay solution-focused rather than defaulting to the worst-case scenario.
6. Advertising and “Perception Is Reality”
The Fair Housing Act prohibits advertisements that indicate a preference or limitation—even an unintentional one. If you advertise your pool as “perfect for family days,” are you implicitly excluding singles?
Language to avoid includes phrases like “perfect for singles,” “ideal for young professionals,” “safe for kids,” or anything else that implies a preference. Include equal housing opportunity language in your marketing materials as a matter of course.
Putting It Together: The Investor’s Risk Management Framework
From an investment standpoint, fair housing compliance is asset protection. Make sure you—or your property management company—has careful policies in place to ensure compliance. To reduce your exposure:
- Know the protected classes at your municipal, state, and federal levels.
- Audit written policies annually.
- Train all employees immediately upon hire.
- Document every accommodation request and screening decision.
- Apply standards uniformly.
- Avoid retaliatory actions after complaints.
Remember: complaints can arise from actions, inaction, statements, or even perceptions.
Final Thought
Multifamily real estate is a people business governed by federal, state, and local law. Enforcement intensity may shift with political administrations, but private litigation and state agencies remain active regardless of federal posture.
The investors who treat fair housing as a compliance system built into their properties—not an afterthought—are the ones who protect long-term value.
Many of the clients we work with are focused on quality investments and long-term viability, which we believe is the best path to building lasting wealth. Contact us to schedule a consultation call and start enhancing your portfolio’s compliance posture today.
