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Does the Fair Housing Act apply to condos, co-ops and townhouses?

7/21/2015 | Real Estate Blog

The multifamily housing market is doing well in Philadelphia. New apartment buildings are in the works or on the market all over the city, and new condominiums are also underway. Investors may have competition, but they also have options.

New investors especially should understand that that a certain amount of responsibility and a good deal of liability come with being a landlord. Investors may not think of themselves as landlords; they may be far removed from the day-to-day operation of a rental property. The truth is, though, that they should understand housing laws before writing any checks. Violations could be costly, and litigation could be even costlier.

It is critical, for example, that investors understand the laws against discrimination in housing. The federal Fair Housing Act prohibits discrimination in renting, purchasing or securing financing for any type of housing. If the transaction has to do with housing, no business, individual or lender may discriminate against anyone based on race, color, national origin, religion, sex, disability and the presence of children.

While sexual orientation and gender identity are not addressed specifically, the Act may still apply. Properties that participate in certain Department of Housing and Urban Development programs — including mortgages backed by the Federal Housing Administration — are barred from discriminating against LGBT residents or applicants.

The Act covers all types of housing, including apartments, condos, single-family homes, co-ops and townhomes. Homeowners associations must comply as well. Even exclusive, gated communities must comply.

What exactly does discrimination look like, though? The most obvious example is a refusal to rent or to sell to a member of a protected class, but not all violations are so obvious.

We’ll discuss a few more subtle tactics prohibited by the Act in our next post.