Federal Laws Affecting Your Real Estate Lease
Although most of the laws regulating the leasing of real property are state statutes and cases, there are also federal laws that govern many types of rentals. These are mostly anti-discrimination laws. The penalties for violation of these laws are quite severe so you should be careful to avoid even the appearance of a violation. Even if you win a case filed against you, it could cost you thousands of dollars in attorney's fees.
One area of federal law applicable to residential leases that does not concern discrimination is environmental law. Owners of property have been fined hundreds of thousands or even millions of dollars for the cleanup of toxic substances. Landlords should be careful that in renting their property they do not allow a tenant to cause any environmental damage to the property.
Lead-Based Paint Notice Law
In 1996, the Environmental Protection Agency and the Department of Housing and Urban Development issued regulations requiring notices to be given to tenants of rental housing built before 1978. These notices state that there may be lead-based paint present and that it could pose a health hazard to children. This applies to all housing except housing for the elderly or zero-bedroom units (efficiencies, studio apartments, etc.). It also requires that a pamphlet titled Protect Your Family from Lead in Your Home, be given to prospective tenants.
The Civil Rights Act of 1968 makes it illegal to discriminate on the basis of race, sex, religion, or nationality in the rental of real property. Even policies that do not clearly discriminate but have the effect of discriminating are illegal under this law.
A victim of discrimination under this section can file a civil suit, a HUD complaint, or request the U.S. Attorney General to prosecute. Damages can include actual losses and punitive damages
This law does not apply to owners of three or fewer single family homes if there is no more than one sale in twenty-four months, if the owner does not own any interest in more than three at one time, and if no real estate agent or discriminatory advertisement is used. It also does not apply to property that the owner lives in if it has four or less units.
Where coercion or intimidation is used to bring about discrimination there is no limit to when the action can be brought or the amount of damages.
Civil Rights Act
The Civil Rights Act Section 1982 is a law similar to the above statute. This law applies only where it can be proved that the person had the intent to discriminate.
Civil Rights and Children
In 1988 the Act was amended to ban discrimination against the disabled and families with children. Penalties for this type of discrimination increase with each offense and unlimited punitive damages can be sought.
This law does not apply to single family homes if the owner owns three or fewer, if there is no more than one sale within twenty-four months, and no real estate agent or discriminatory advertisement is used.
Additionally, there are exemptions for dwellings in state and federal programs for the elderly, for complexes that are solely used by persons sixty-two or older, for complexes used solely by persons fifty-five or over if there are substantial facilities designed for the elderly, for religious housing, and for private clubs.
Civil Rights and Disability
In 1992, the Americans with Disabilities Act took effect. This law requires that reasonable accommodations be made to provide access to commercial premises for the disabled and it forbids discrimination against them. This means that the disabled must be able to get to, enter, and use the facilities in commercial premises. It requires that if access is "readily achievable" without undue burden or undue hardship (not so costly that it puts someone out of business) then changes must be made to the property to make it accessible.
What is reasonable will usually depend upon the size of the business. Small businesses will not have to make major alterations to their premises if the expense would be an undue hardship. Even large businesses do not, for example, have to make all shelving low enough for people in wheelchairs to reach as long as there is an employee to help the person. In addition there are tax credits for certain businesses.
Some of the changes that must be made to property to make it more accessible to the disabled are:
- installing ramps
- widening doorways
- making curb cuts in sidewalks
- repositioning shelves
- repositioning telephones
- removing high pile, low density carpeting
- installing a full-length bathroom mirror.
Both the landlord and the tenant can be liable if the changes are not made to the premises. Most likely the landlord would be liable for common areas and the tenant for the area under his control. Private clubs and religious organizations are exempt from this law.