Concessions Are Tricky, But Not Necessarily Illegal

Concessions to applicants should be provided carefully because they can raise fair housing issues

Some housing providers use negotiated rent concessions as a lease closing or to spark an overall decrease in vacancy rate. The Fair Housing Act does not make rent concessions illegal, but it does prohibit leasing to people on different terms or conditions based on their race, color, sex, religion, national origin, disability, or familial status. Using rent concessions on an individual basis raises the probability that two people could view the same apartment home on the same day, yet be quoted two different rental rates. Anytime a policy results in two similarly situated people being treated differently, it raises Fair Housing Act implications. We generally advise housing providers not to engage in the practice of using negotiated rent concessions on an individual basis, because of the risk that different treatment will be perceived to be based on membership in a protected class.

On the other hand, we recognize that there are legitimate business reasons to offer rent concessions. Assuming there is in fact no intent to discriminate, and that the income generated by rent concessions exceeds the potential risk that someone will file a fair housing complaint, offering rent concessions may be a sound business judgment. Here is our advice on how to reduce the risk of fair housing problems associated with the practice of individually negotiated rent concessions:

* The rent concession policy, as well as its purpose and the circumstances of its application, should be in writing. Include a statement that rent concessions will not be applied in any way that will discriminate against people on the basis of their race, color, religion, sex, national origin, familial status, disability, or any other characteristic protected by law. Have all employees responsible for granting rent concessions read the policy and sign a statement that they have read, understood, and agreed to abide by it.

* Recognize that as human beings, we all have biases, which may lead to differences in treatment identifiable in patterns by race, gender, disability, or even the presence of children. Rent concessions provide one more opportunity for an enforcement agency or disgruntled resident to uncover any such patterns. Employees should be specifically and personally (meaning, not just in writing) informed of the need to be aware of this possibility, and reminded of the importance of not judging prospective residents with their persona] biases.

* Keep detailed notes on each prospective resident, noting in particular any special requests, and any reasons why the prospective resident was or was not quoted a specific rate.

* Consider conducting periodic audits of the application of the rent concessions policy, to check for any indication of a negative impact on a particular protected class.