Conducting Fair-Housing-Friendly Tours

This month, we're going to review the rules on how to avoid fair housing problems when showing units to prospects.

As a basic element of a leasing consultant's job, conducting tours appears to be a straightforward process: A prospect says he wants a particular type of unit, at a particular price, and at a particular time—and the leasing agent takes him to see what's available. It may seem like a mundane task to seasoned leasing staff who may have conducted tours with countless prospects over the years. And since it seems like such a simple process, newly hired consultants may be conducting tours with little oversight or training.

Therein lies the problem, at least from a fair housing perspective. Because it's such an everyday part of a leasing consultant's job, it's easy to overlook the need for written policies and procedures for showing units to prospects. Without safeguards to ensure consistency, communities are vulnerable to fair housing claims based on the appearance of discriminatory motives, if, for example, prospects of different races are treated differently—though unintentionally—by different leasing consultants.

This month, we'll explain how to avoid these and other pitfalls when showing available units to prospects. Then, we'll give you nine rules for ensuring you conduct fair-housing-friendly tours of your community. Finally, you can take the COACH's Quiz to see how much you've learned.

What Does the Law Say?

The Fair Housing Act (FHA) outlaws housing discrimination based on race, color, religion, sex, national origin, familial status, or disability. In addition, state and local laws ban discrimination based on other characteristics, such as marital status, sexual orientation, and source of income.

During the process of interacting with prospects who inquire about vacancies and touring the property, communities may face a fair housing claim if they engage in discriminatory rental practices based on a protected characteristic. Examples include:

• Refusing to rent or negotiate for housing;

• Making housing unavailable;

• Falsely denying that housing is available for inspection or rental;

• Using different qualification requirements, including screening criteria and application procedures;

• Setting different terms, conditions, or privileges, including rental charges and other lease terms; and

• Making or advertising any statement that indicates a preference, limitation, or discrimination.

Moreover, HUD has interpreted the generic phrase “making housing unavailable” to include “unlawful steering—that is, guiding, restricting, or otherwise attempting to influence a prospect's housing choices based on a protected characteristic. HUD regulations cite four common examples of unlawful steering practices:

• Discouraging someone from seeing or renting a certain unit based on the prospect's race, religion, sex, or other protected characteristic, or because of the race, religion, sex, or other protected characteristic of your residents;

• Discouraging someone from renting a certain unit because of a protected characteristic by exaggerating the drawbacks or not telling the person about desirable features of the unit or the community;

• Assigning someone to a particular section or floor of your community because of a protected characteristic; or

• Telling a prospect that she wouldn't be comfortable or compatible with the residents of your community or the neighborhood because of her race, religion, sex, or other protected characteristic.

Furthermore, leasing consultants may act out of good intentions yet unwittingly violate the steering provisions—for example, by assuming that a prospect who has newly arrived from a foreign country would be more comfortable living near current residents who share the same cultural background. Unless the prospect says that's where he wants to live, anything you do or say to limit his housing choices—by showing him only those vacancies or discouraging him from similar units located elsewhere in your community—amounts to unlawful steering.

9 Rules for Conducting a Fair-Housing-Friendly Tour

Rule #1: Set Policy for Showing Units

One of the best ways to avoid fair housing problems related to showing units is to have a written policy explaining the details about when and how tours are conducted at your community, according to fair housing expert Nadeen Green. The purpose is twofold: to ward off discrimination claims by ensuring that prospects are treated consistently, and to help in your defense in case a claim is filed against your community.

The law doesn't require you to have a policy—written or otherwise—so it doesn't address what must be in the policy, except of course that it must be nondiscriminatory. The policy should include details about when your community will conduct tours. For safety reasons, the policy should describe weather conditions applicable to your area—including temperature extremes, thunderstorms, blizzards, hurricanes, or tornado watches or warnings—when tours will not be conducted. Safety considerations will also dictate the timing for starting a tour. To avoid conducting tours in the dark, for example, the policy may state that tours must begin before a particular time—or to take account of changing daylight, within a certain period before sundown.

Although consistency is the key to avoiding a fair housing complaint, there may be circumstances when the community determines that safety concerns outweigh the need for consistency in conducting tours. For example, the policy should address people whom Green refers to as “scary prospects—someone who appears to be intoxicated, makes suggestive comments, or acts in an aggressive manner. When confronted with scary prospects, the policy may give leasing consultants discretion to conduct the tour, ask to reschedule, or get a coworker to join them. Whatever the policy, the important thing from a fair housing perspective to is to document the reasons for the leasing consultant's actions—you may need it if the prospect claims he was denied a tour because of his race or other protected characteristic.

COACH'S TIP: Post your policies on limits or preconditions to showing vacant units. The policy, displayed in a conspicuous place in your leasing office, will let everyone know that your policy doesn't provide for starting tours too close to nightfall or during bad weather.

Rule #2: Set Policy on Photo IDs

For safety reasons, many communities require prospects to produce some form of photo identification before leasing consultants will take them on a tour of available units. Whatever your policy on photo IDs, it should address the details, such as who must provide IDs, what types are acceptable, whether to photocopy them or hold the originals during the tour, and whether to retain any copies after the tour is completed.

This is an area in which communities have a lot of leeway—but there are potential fair housing problems lurking in the details. For example, communities may choose not to require anyone to show an ID before a tour, but fair housing expert Doug Chasick doesn't recommend it. Requiring prospects to leave a photo ID in the office during a tour is a legitimate security measure aimed at preventing assaults and aiding in the apprehension of assailants who commit crimes against leasing consultants.

Although some communities require an ID from only one person on a tour, many call for IDs from everyone going on the tour who is 18 or older, although the age requirement could be as young as 16 or 17, depending on state law. Whatever your policy, fair housing problems may arise unless you apply it consistently. Ignoring the requirement for white prospects, but insisting on it for black prospects would amount to discrimination based on race.

Another detail that could trigger a fair housing complaint is the type of ID your community requires, says Chasick. If, for example, a community accepts only a U.S. or state-issued form of identification, it could be accused of discrimination based on national origin by foreign-born prospects. And though it's commonly offered as a form of identification, Chasick warns against requiring prospects to produce a driver's license because a prospect may not have a driver's license due to a disability. Instead, Chasick advises communities to accept any valid—that is, unexpired—government-issued photo ID, whether issued by North Dakota or a country in northern Africa.

There is a great deal of debate among fair housing experts over whether to photocopy IDs and, if so, what to do with the copies afterward. Many communities take photocopies of photo IDs to avoid objections from prospects who are loathe to turn over what may be their only form of identification, not to mention problems associated with securely storing original IDs and making sure that they're returned when the tour is over. Those communities, and some fair housing experts, reason that that if the community uniformly photocopies IDs of all adult prospects taking a tour of available units, then the community may not be liable for discrimination.

The real problem seems to stem from what happens to the photocopy once the tour is over. Some experts, including Atlanta-based fair housing attorney Robin Hein, believe there's no problem with keeping the copies with the prospect's application as long as the pictures are not used to make decisions about who may live in the community. Nevertheless, Hein and other experts acknowledge that it may not be a good idea to retain copies of photo IDs with rejected applications.

Others say it's okay to take copies before the tour, but to give them back or destroy them after the tour is over. That's not enough, according to some fair housing experts, including Chasick, who advise against making copies of photo IDs before touring vacant units (although they agree there is nothing wrong with retaining photos after the application is approved). For one thing, it's often ineffective—unless the community has invested in a good photocopier—because it can be nearly impossible to get a clear image of a photo ID, he says. But more important, Chasick and others say it eliminates the potential that the photo could be used against you to support a prospect's claim that his application was denied based on information gleaned from the picture about the prospect's race, national origin, sex, or other protected characteristic.

Rule #3: Maintain Unit Availability Log

Develop standard policies and procedures to keep track of when units become available for showings. Some communities have moved to computerized systems, while others maintain a paper system, and still others use a combination of both.

Regardless of whether it's on paper or computer, the fair housing goals are the same: to ensure that two prospects with identical housing needs, who come to your community at the same time and speak with different leasing consultants, are shown all units relevant to their needs and requests. The system also helps provide proof that all prospects received accurate availability information and explains why a particular unit wasn't shown to a particular prospect.

One key aspect of the policy is to establish when a unit is available for showing. It's important to set a standard on when your community is willing to show a unit—ranging anywhere from when you learn that a current resident is leaving to after it has been vacated, cleaned, and declared market-ready. You can weigh the pros and cons of showing a unit that's still occupied, or whether to wait until a supervisor has approved it as market-ready. The point is to keep everyone on the same page. If your policy is to show only units that have been declared market-ready, you could be accused of a fair housing violation if a leasing consultant tells one prospect that nothing is available at the same time as another consultant is showing units before they've been declared market-ready.

Whatever your policy, maintain an updated log of all available units, including details such as the time and date the unit became available and any changes in its status—for example, if a unit was pulled from the list because of a maintenance problem detected during a showing. The log not only allows all leasing consultants to know what's available at a particular time, but also explains any apparent inconsistencies in what prospects are told within a short period of time. For example, if a family with children is told that nothing is available during an early morning phone call, but a childless couple is shown a unit that subsequently became available late that afternoon, the availability log would quickly show that the reason that they were treated differently was simply based on the timing—not on discriminatory motives.

COACH'S TIP: Make sure your availability log reflects any units subject to a “special—that is, an incentive, such as rent discounts, for particularly hard-to-lease units or a surplus of a particular type of unit. Chasick warns that specials can be a source of fair housing problems unless communities take steps to ensure consistency, so that specials are offered to all prospects who qualify for the offer. To do that, Chasick says that the details of any specials should be spelled out in writing and clearly explained to your leasing staff. And make sure that your staff understands that they should not limit a prospect's housing choices by showing prospects only units subject to specials if other, more desirable units are available that meet that prospect's needs. The leasing consultant's zeal to rent a long-vacant unit—or desire to save the prospect money—could be misconstrued as unlawful discrimination.

Rule #4: Keep Track of Prospect Contacts

Develop policies and procedures to keep track of everyone who contacts your community from whatever source—telephone, email, Web inquiry, or walk-in—and for whatever reason. It may seem to be going overboard to keep track of everyone who contacts your community, but fair housing experts emphasize that having good records often makes the difference between winning and losing a fair housing case. If any of those contacts results in a fair housing complaint against you, you'll find that the administrative burden of detailed record keeping was well worth the effort to avoid time and money spent to defend what may be a simple misunderstanding without the evidence you need to defend yourself.

Keep a log with details about any phone calls, emails, and Web inquiries from prospects, applicants, or residents. The substance of the inquiry could be about any subject; it doesn't have to be a leasing inquiry. The log should include the date and time of the contact; the name and telephone number of the person initiating the contact; the name of the person who took the inquiry; the subject of the inquiry; and a summary of what was said. If the contact is a leasing inquiry, include information about whether the prospect made an appointment, and if so, the time and date of the appointment.

Keep a record of everyone who visits the rental office, even of those who don't go out on a tour or fill out an application. The most common way of doing this is to fill out a guest card, including the following information:

• Prospect's name, address, telephone number, and email address;

• Date and time of visit;

• Type of unit requested, and stated budget;

• Any preferences indicated by the prospect (first floor, near the playground, etc.);

• Prospect's proposed move-in date;

• Which units you showed the prospect;

• Prospect's response to units seen;

• Outcome of showing and explanation; and

• Verification that the prospect has reviewed information on the card for accuracy, including the prospect's signature.

You should also have a section for any other relevant information. For example, if you were unable to offer the prospect a tour due to extreme weather conditions at the time of the visit, you can note that on the guest card.

COACH'S TIP: Don't be afraid to make notes on the guest card about what happens while showing units to prospective residents, says Chasick. Some leasing agents are skittish about making notes on guest cards because of lawsuits in which communities used symbols or other cryptic codes to track—and exclude—prospects based on race or other protected characteristics. In fact, HUD regulations bar the use of codes or other devices to segregate or reject applicants, so you should not use the guest cards to record information about a prospect's race, religion, disability, or other protected characteristic. On the other hand, it's appropriate—and in fact wise—to make notes on guest cards about what happens during a tour—for example, if a prospect in a wheelchair declines to see amenities, such as a swimming pool, that are on your standard tour route.

Rule #5: Focus on Training Staff

Formulating fair-housing-friendly policies and procedures for showing vacancies is only half the battle. The policies are of little value unless you take the time to ensure that all staff members—from the seasoned to the newly hired—fully understand and apply the policies in a consistent manner.

New hires pose a particular risk to your fair housing efforts, says Chasick, usually because of well-intentioned, but unlawful, remarks, questions, or conduct. If, for example, a leasing agent knows that children have been injured playing too close to a pond on the property, he may decide not to tell a young family about a vacant unit in that area and show them units only in other buildings. Although he's motivated by safety concerns, the leasing consultant may be unaware that he has just engaged in unlawful steering.

All staff should receive periodic training to reinforce the importance of consistently applying your policies and procedures. Include people skills, such as the importance of a consistent demeanor when dealing with prospects. Treating everyone with professional courtesy will avoid the impression that leasing agents are behaving differently with some people than they are with others based on a protected characteristic.

Chasick also recommends educating your staff on cultural differences, particularly the customs and etiquette of the demographic groups in your area. For example, hand gestures can mean vastly different things—some of which seem innocuous in this country—but are quite offensive in different countries and cultures around the world.

Rule #6: Offer to Show Prospects All Available Units That Meet Their Needs

To comply with fair housing law, offer to show a prospect all available units that meet her stated needs, regardless of her race or any other characteristic protected under federal, state, or local law. It's unlawful to turn anyone away, misrepresent the availability of units, or refuse to show available units to a prospect based on a protected characteristic.

Example: A Chicago-area rental property owner recently agreed to pay $35,000 to settle allegations that he refused to rent a single-family home to an African-American family and made repeated statements to fair housing testers expressing a preference not to rent the home to African Americans. Allegedly, he said he would rent the house to a white tester for $100 less than the advertised rate, and further stated, “You're not black; that's the reason you're getting that” [U.S. v. Flanagan, January 2011].

Don't make exceptions based upon what you believe to be the preferences of the neighboring residents. For example, let's say you have five vacant two-bedroom units when a family with young children asks about available two-bedroom units. Three of the units are near those occupied by elderly long-term residents in a quiet area of your community. If you don't mention those units, but show the family only the other two, you're steering and violating the FHA's ban on discrimination based on familial status.

Rule #7: Don't “Steer”

When showing units to prospects, be guided by their stated requirements, not by your own preconceived notions about where they would prefer to live in your community. Limiting a prospect's housing choices based on a protected characteristic is a fair housing violation, commonly known as “steering.” In general, steering means guiding, directing, or encouraging prospects to live in—or not live in—certain sections of your community based on any characteristic protected under federal, state, or local law.

When a prospect expresses an interest in seeing units of a certain size within a certain price range, you should explain what's available and offer to show any units that meet his criteria. For instance, if a prospect wants to see two-bedroom units within a certain price range, explain what you have available and offer to show any that meet his requirements. You can take into account any stated preferences about location, such as a particular floor, particular building, or proximity to amenities. But it's unlawful to limit prospects' choices within your community based on your beliefs about what they would prefer or what would be best for them. Common examples of unlawful steering include:

1. Showing families with children units located only on the ground floor or away from potentially dangerous amenities like swimming pools;

2. Showing prospects of a particular race, religion, or national origin units only in areas of the community where others of the same race, religion, or national origin live; or

3. Not showing prospects with disabilities units on upper floors or located far from amenities such as the fitness center or swimming pool.

Example: The owners and operators of a 268-unit rental community in Renton, Wash., recently agreed to pay $110,000 in damages and penalties to settle allegations of discrimination against African Americans, Hispanic Americans, Indian Americans, and families with children in violation of the Fair Housing Act, according to a recent announcement by the U.S. Department of Justice. Among other things, the complaint alleged that the defendants steered Indian tenants away from one of the five buildings at the community, treated tenants from India less favorably than other tenants, and discouraged African Americans, Hispanics, and families with children from living there [U.S. v. Summerhill Place, LLC, March 2011].

Be careful about what you say when talking to prospects about available units. It's unlawful to make comments to either encourage or discourage them about living in a particular unit or area within your community based on race, disability, familial status, or other protected characteristic. Consequently, avoid expressing personal opinions about whether a unit or building is or isn't well suited for a particular prospect for reasons related to a protected characteristic.

COACH'S TIP: If a prospect says she's interested in seeing units only in a particular section of your community, you're under no obligation to show her units in other sections. But you should note on the guest card that the reason that she wasn't shown all available units was her choice—not yours.

Rule #8: Take Consistent Route During Tour

Take a standard route when conducting tours of your community. That way, you can ensure that all prospects have the opportunity to see the community in the same light, without regard to the prospect's race, color, or other protected characteristic. For marketing purposes, the standard route is likely to include attractive features and amenities, such as the fitness center or pool. Deviating from the standard route—for example, by taking the long way to a particular building—or going out of your way to go by unattractive features—such as the trash collection area—when touring with some prospects, but not others, could be perceived as an attempt to discourage them from living in the community. If it's based on a protected characteristic, such conduct could be interpreted as a form of unlawful steering.

During the tour, make sure to show your amenities on an equal basis, says Chasick. Don't assume, for example, that a prospect with a disability isn't interested in looking at your fitness center or pool. Nevertheless, be guided by the prospect's preferences. If the prospect doesn't want to see the fitness center, you certainly don't have to force him to do so—though you should make a note on the guest card that you skipped the fitness center at the prospect's request.

Rule #9: Don't Ask or Answer Inappropriate Questions

When dealing with prospects, you can get into fair housing trouble for either asking or answering inappropriate questions.

Asking questions related to a protected characteristic is inappropriate, even if motivated by harmless curiosity. When meeting people from foreign countries or different cultures, for example, don't ask questions about their accent or clothing, even if you are genuinely interested in knowing more about where they come from, says Green. Though your intentions are good, the prospect may suspect that you have discriminatory reasons for asking questions related to her national origin. Because of the risk that your questions could be misinterpreted, don't ask these types of questions, even if she asks you first because your accent or clothing suggests that you share the same cultural background, says Green.

By the same token, disability-related questions—even when well intentioned—can trigger a discrimination complaint. With only limited exceptions, it's unlawful to ask prospects questions about whether they or anyone associated with them has a disability, or the nature or severity of a disability. Consequently, you could be accused of a fair housing violation if, in an effort to be helpful, you ask a prospect in a wheelchair questions about her ability to walk or need for an accommodation. The law allows disability-related inquiries when necessary to respond to a reasonable accommodation request, but you must wait to be asked. You shouldn't offer an accommodation if the prospect hasn't asked for one.

Meanwhile, answering questions from prospects can also trigger a fair housing complaint if the response involves the race, ethnicity, or other protected characteristic of other residents in your community. It doesn't matter whether the prospect asking the question is herself a member of the same protected class. If a prospect asks you a risky question, you can get into as much fair housing trouble by giving an inappropriate answer as you would if you volunteered the information yourself, warn fair housing experts. Be polite but firm when faced with inappropriate questions, and offer a standard response—for example, by saying that your community policy and fair housing law don't permit you to answer the question.

Fair Housing Act: 42 USC §3601 et seq.

Sidebar

COACH Sources

Doug Chasick, CPM®, CAPS, CAS, Adv. RAM, CLP, SLE, CDEI: Senior VP, Multifamily Professional Services, CallSource, (888) 222-1214; dchasick@callsource.com.

Nadeen W. Green, Esq.: Senior counsel, For Rent Magazine, 294 Interstate N. Pkwy., Ste. 100, Atlanta, GA 30339; (770) 801-2406; nadeen.green@forrent.com.

Robin Hein, Esq.: Attorney at Law, Fowler, Hein, Cheatwood and Williams, P.A., 2970 Clairmont Rd., Ste. 220, Atlanta, GA 30329; (404) 633-5114; RobinHein@ApartmentLaw.com.

Carl York: Vice President, Sentinel Real Estate Corp., 8495 Scenic View Dr., Ste. 106, Fishers, IN 46038; (317) 570-6724; York@sentinelcorp.com.