This week's tip is taken from a new article that explains three

areas of the federal Fair Housing Act (FHA) that are critical for

condo and HOA boards to understand. Here we'll cover just one

area: protected classes.

The FHA prohibits all forms of discrimination based on protected

classes. With more associations foreclosing on delinquent owners

and then renting out the units, you must understand the act's

prohibition on rental discrimination. Under the act,

discrimination on the basis of protected classes—race, color,

national origin, religion, sex, disability, familial status, and

age—is barred.

Bob Tankel, principal at Robert L. Tankel PA in Dunedin, Fla., a

law firm that advises associations, recommends basing as much of

your rental decisions as possible on factors that can be

documented on paper, such as financial scores. "Make sure

whatever criteria you're using to determine who's going to rent

or occupy property the association is renting out is in

compliance with state and federal fair housing laws and the U.S.

Constitution," he says.

He adds, "You can find out just about everything you need to

know on paper. The less physical interaction your association

has with the potential occupants, the better. Here in Florida,

testers are routinely sent out to properties being rented, and

they'll see if there's discriminatory steering going on. This

isn't an abstract idea. It goes on."

The issue of discrimination on the basis of protected classes

also arises in associations that screen residents. "Most

associations in Florida have a screening process where a new

purchaser has to complete an application and can be approved or

denied by the board," says James Donnelly, president and CEO of

Castle Group, a property management company in Plantation, Fla.,

that manages 55,000 association units. "That's where you have to

be incredibly careful. Our advice is that you don't refuse any

application unless you've received legal advice."

Bob Tankel goes even further. "Most communities have no authority

to physically interview someone," he explains. "I've asked many

board members, 'Show me the rule where it says you have that

authority,' and they have no answer. More communities have gotten

in trouble with screening people than have been well served by it."

Finally, remember that each state has passed its own version of

a fair housing or civil rights act that prohibits certain types

of discrimination. Some states add such factors as age or sexual

orientation to protected classes. Be sure to check with an

attorney in your state to know the specific rules.

For more information about the FHA and what you should know,

see our new article. Go there now »

Best regards,

Matt Humphrey

President