Fair Housing Laws for Maryland Property Managers

Fair Housing Laws for Maryland Property Managers

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Managing residential properties in Maryland involves navigating a complex and demanding legal landscape. For property managers, the responsibilities extend far beyond collecting rent and coordinating maintenance. You are on the front lines of tenant interaction, which places you at the center of one of the most heavily regulated areas of property law: fair housing. A simple mistake in phrasing an advertisement, a seemingly harmless question on an application, or an inconsistent policy for tenant screening can lead to significant legal and financial consequences.

What Are the Core Fair Housing Laws?

At its foundation, fair housing law is a collection of federal, state, and local rules designed to prevent discrimination in housing-related transactions. This includes renting, selling, lending, and insuring properties.

  • The Federal Fair Housing Act (FHA): This is the national baseline, a landmark civil rights law passed in 1968. It prohibits discrimination based on seven specific “protected classes.” It is enforced by the U.S. Department of Housing and Urban Development (HUD).
  • The Maryland Fair Housing Act: This state law incorporates all the federal protections and adds several of its own. This is a key point for all Maryland property managers: you must follow a stricter set of rules than what is required by federal law alone. The Maryland Commission on Civil Rights (MCCR) is the primary state-level enforcement agency.
  • Local Ordinances: To add another layer, many counties and cities in Maryland have their own fair housing ordinances that provide even more protections. Areas like Montgomery County, Prince George’s County, and Baltimore City are known for having some of the most comprehensive local housing laws in the nation.

The Federal Protected Classes: The National Standard

The federal FHA makes it illegal to discriminate in housing based on the following seven protected classes. As a property manager, you cannot make any decision regarding a tenant or applicant based on their:

  • Race
  • Color
  • Religion
  • National Origin
  • Sex
  • Disability (formerly “handicap”)
  • Familial Status (the presence of children under 18)

A discriminatory action could be as overt as refusing to rent to someone because of their race or as subtle as setting different terms or conditions for tenants of a different national origin.

Maryland’s Additional Protected Classes: Where Compliance Gets Tricky

This is where many Maryland property managers get into trouble. Maryland law adds the following protections, which are not covered by the federal FHA:

  • Marital Status: You cannot refuse to rent to a couple because they are unmarried, nor can you have different policies for married versus single tenants.
  • Sexual Orientation: This protection bars discrimination based on a person’s romantic or physical attraction to others (e.g., gay, lesbian, bisexual).
  • Gender Identity: This protects individuals who are transgender or non-binary. You cannot deny housing or harass a tenant based on their gender expression or identity.
  • Source of Income (SoI): This is one of the most significant and litigated protections in Maryland.

“Source of Income”: A Critical Hurdle for Maryland Landlords

In Maryland, it is illegal to discriminate against a tenant based on their “source of income.” This means you cannot refuse to rent to an otherwise qualified applicant simply because they pay their rent using lawful funds that are not employment-based wages.

This protection explicitly includes:

  • Housing Choice Vouchers (formerly Section 8)
  • Social Security Disability (SSD) or Supplemental Security Income (SSI)
  • Child support or alimony
  • Veterans’ benefits
  • Any other form of legal government assistance or subsidy

You cannot have a policy that says, “We do not accept vouchers” or “Applicants must be employed.” Your screening criteria, such as credit scores and rent-to-income ratios, must be applied in a way that does not automatically disqualify anyone using a housing subsidy. For example, if a voucher covers 70% of the rent, you can only apply your income-to-rent ratio requirement to the 30% portion the tenant is responsible for.

Local Laws: When County Rules Add Another Layer

It is essential to know the rules in your specific jurisdiction. Many Maryland counties add their own protected classes. For example, Montgomery County’s laws are famously robust and include protections for:

  • Age
  • Ancestry
  • Creed (in addition to religion)
  • Family Responsibilities
  • Occupation
  • Personal Appearance
  • Political Opinion

A property manager in Silver Spring or Gaithersburg must follow federal, state, and Montgomery County laws. Failure to know these local rules is not a defense against a discrimination claim.

Fair Housing in Practice: From Marketing to Move-Out

Fair housing laws apply to nearly every action a property manager takes.

  • Marketing and Advertising: Your listings cannot state a preference for or against a protected class.
  • Tenant Applications: Your application form should not ask questions that reveal protected information (e.g., “Are you married?” “What is your country of origin?”).
  • Screening Policies: You must have written, objective screening criteria (e.g., credit score, income, rental history) and apply them consistently to every single applicant.
  • Showings: You must offer the same viewing opportunities to all interested parties. “Steering”—guiding a prospective tenant toward or away from a certain building or neighborhood based on their race or familial status—is illegal.
  • Repairs and Maintenance: You must respond to maintenance requests in a timely and non-discriminatory manner.
  • Evictions: The reason for an eviction must be legitimate, non-discriminatory, and in accordance with the lease and state law. You cannot evict someone in retaliation for them filing a fair housing complaint.

What Does Discriminatory Advertising Look Like?

Your word choice in property listings matters immensely. The law prohibits any advertisement that “indicates any preference, limitation, or discrimination.”

Examples of problematic advertising phrases include:

  • “No kids” or “perfect for singles” (Familial Status discrimination)
  • “Professionals only” (May discriminate based on Familial Status or Source of Income)
  • “Quiet building” (May be used to discourage families with children)
  • “Christian home” (Religious discrimination)
  • “Must be employed” (Source of Income discrimination)
  • “Not set up for wheelchairs” (Disability discrimination)
  • “Walking distance to [church/synagogue]” (May imply a religious preference)

The best practice is to describe the property, not the ideal tenant. Focus on features like “two-bedroom,” “newly renovated kitchen,” and “convenient to public transit.”

How Do You Handle Tenant Screening and Applications Compliantly?

Consistency is the single most important element of a compliant screening process.

  • Create Written Criteria: Develop a clear, objective, and written policy for all applicants. This should define your minimum requirements for credit, income, and rental/criminal history.
  • Apply Criteria Uniformly: Every applicant must be processed and judged by the exact same standards. If you make an exception for one applicant (e.g., “I’ll accept a lower credit score because I had a good feeling about them”), you must be prepared to make that same exception for everyone.
  • First-Come, First-Served: A policy of processing applications in the order they are received is a strong defense against claims of discrimination.
  • Limit Criminal Background Checks: HUD and many local jurisdictions have cracked down on broad “no felony” policies. Your policy should be specific, non-discriminatory, and consider the nature of the crime and how long ago it occurred.

Navigating Disability: Reasonable Accommodations vs. Reasonable Modifications

Discrimination based on disability is one of the most common sources of FHA complaints. Property managers have two distinct obligations:

What is a Reasonable Accommodation?

This is a request to change a rule, policy, practice, or service so that a person with a disability will have an equal opportunity to use and enjoy a dwelling.

Common Examples:

  • Granting an exception to a “no pets” policy for an assistance animal (this includes support animals, not just “service animals”).
  • Providing a reserved parking space near their unit for a tenant with a mobility impairment.
  • Allowing a tenant to transfer to a ground-floor unit.
  • Sending rent reminders by email to a tenant with a visual impairment.

Property Manager’s Role:

  • You are allowed to request reliable documentation of the disability and the disability-related need for the accommodation if the disability is not obvious.
  • You cannot charge a “pet deposit” or “pet rent” for an assistance animal.
  • You must engage in a good-faith “interactive process” to find a solution.
  • You can only deny a request if it is not reasonable (i.e., it imposes an “undue financial and administrative burden” or fundamentally alters the nature of your operations).

What is a Reasonable Modification?

This is a request to make a physical change to a unit or common area to make it accessible for a person with a disability.

Common Examples:

  • Allowing a tenant to install grab bars in a bathroom.
  • Allowing the installation of a wheelchair ramp.
  • Permitting the installation of a visual fire alarm for a tenant who is deaf.

Property Manager’s Role:

  • In most cases, the tenant is responsible for the cost of the modification.
  • You can require the tenant to use a licensed/insured contractor.
  • You can require the tenant to restore the unit to its original condition upon move-out, if the modification would interfere with the next tenant’s use (e.g., removing grab bars is usually not required, but removing a custom-built ramp might be).

Familial Status: Beyond Just “No Children” Policies

This protection makes it illegal to discriminate against families with one or more children under the age of 18.

This is not just about “no kids” policies. It also includes:

  • Steering: Directing families with children to ground-floor units or specific buildings.
  • Unreasonable Rules: Imposing special rules on children (e.g., “Children cannot play on the lawn”).
  • Occupancy Standards: Your occupancy limits must be reasonable. A policy of “two people per bedroom” is generally considered safe. However, a blanket “two-person limit” for a large two-bedroom apartment could be seen as discriminatory against a family with two children.

What is “Disparate Impact”?

This is a vital legal concept that every property manager must recognize. Disparate impact occurs when you have a policy that is neutral on its face (it applies to everyone) but has a disproportionately negative effect on members of a protected class.

The classic example is an overly restrictive criminal background policy. A blanket ban on anyone with any type of criminal record might seem neutral, but because of well-documented racial disparities in the criminal justice system, this policy could be found to have a disparate impact on certain racial groups.

Another example is a very high minimum income requirement (e.g., “must earn 4x the rent”). This could be shown to disproportionately affect single mothers (familial status) or those on disability (source of income). Your policies must be directly related to a legitimate business need and be the least discriminatory way to achieve that need.

The Complaint Process: What Happens When an Accusation is Made?

If a tenant or applicant believes you have violated their rights, they can file a complaint with HUD or the Maryland Commission on Civil Rights (MCCR).

  • Complaint: The individual files a formal complaint, often for free.
  • Investigation: The agency will notify you of the complaint and begin an investigation. They will request documents, such as your tenant files, screening policies, and correspondence.
  • Conciliation: The agency will typically try to facilitate a settlement (conciliation) between you and the complainant.
  • Determination: If no settlement is reached, the agency will issue a “determination” on whether there is reasonable cause to believe discrimination occurred.
  • Charge and Hearing: If cause is found, a formal charge of discrimination is issued. The case will be heard by an administrative law judge (ALJ) or can be moved to state or federal court.

This process is time-consuming, expensive, and stressful, even if you are ultimately found to be compliant.

What are the Penalties for a Fair Housing Violation?

The penalties for a violation are severe and go far beyond a simple slap on the wrist. A finding of discrimination can result in:

  • Compensatory Damages: Money paid to the victim for their actual damages (e.g., higher rent paid elsewhere, moving expenses) and for emotional distress.
  • Punitive Damages: These are damages designed to punish the property manager/owner and deter future violations.
  • Civil Penalties: HUD and the MCCR can levy significant fines. These can be tens of thousands of dollars for a first offense and much higher for repeat violators.
  • Attorney’s Fees: You will likely be ordered to pay the complainant’s legal fees, which can often exceed all other damages.
  • Mandatory Training: You and your staff may be required to attend fair housing training at your own expense.

Proactive Compliance: How Property Managers Can Mitigate Risk

The best defense is a proactive offense. A property manager should not wait for a complaint to take fair housing seriously.

  • Get Educated: You must know the federal, state, and local laws for every property you manage.
  • Create Clear, Written Policies: Your tenant selection criteria, accommodation request process, and maintenance procedures should all be in writing.
  • Be Consistent: This is the golden rule. Apply every policy to every person, every time.
  • Train Your Staff: Everyone on your team, from leasing agents to maintenance staff, must be trained on fair housing. A discriminatory statement by an employee is a liability for you and the property owner.
  • Document Everything: Keep detailed records of all applicant and tenant interactions. Document why you denied an applicant. Keep records of maintenance requests and your response. Put all accommodation request discussions in writing.
  • Review Your Insurance: Ensure your professional liability or E&O insurance adequately covers fair housing claims.