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How the Office of Fair Housing and Equal Opportunity Affects Your Multifamily Investment
Protect your multifamily investment by learning how HUD's fair housing office (FHEO) can affect how you run your property.
The HUD Office of Fair Housing and Equal Opportunity (FHEO) can make or break your investment. While it might seem like just another government agency, its impact on your bottom line can be significant.
Understanding Your Risk Exposure
Your risk level depends largely on your property type. If you own HUD-backed market-rate or affordable housing, you'll face more oversight. But here's what surprises many investors: market-rate properties aren't immune. Any resident or applicant can file a complaint, triggering an investigation that could cost thousands in legal fees and fines.
The most expensive mistakes involve discriminating (often unintentionally) based on race, color, national origin, religion, sex, family status, sexual orientation, or disability. Even a single poorly trained leasing agent can create massive liability for your property.
Protecting Your Investment
The best defense is a strong offense. You need clear, written policies for handling applications, maintenance requests, and accommodation requests. But having policies isn't enough. You and any staff you employ must follow them consistently.
The three areas where investors most often face problems:
- Inconsistent application screening
- Poor documentation of decisions
- Slow response to reasonable accommodation requests
- Why you approved or denied each application
- How you handled every maintenance request
- Your response to accommodation requests
- Any resident complaints and resolutions
The Real Cost of Violations
An FHEO violation can cost up to $16,000 for a first offense and $65,000 for repeat violations. But that's just the beginning. You'll also face legal fees, potential settlements, and lost income during investigations. Small violations (and perceived violations) can balloon into six-figure problems, easily — make sure you have quality insurance in place.
Smart Management Practices
Training your staff is cheaper than defending against complaints. Make sure everyone - from maintenance to management - understands fair housing basics. Document everything, including:
What to Do If You Get a Complaint
If you receive an FHEO complaint, don't panic - but act fast. Contact your attorney immediately. Gather your documentation. Respond promptly to FHEO requests. If you're offered mediation, consider it seriously - it's often cheaper than fighting.
Looking Ahead
Fair housing compliance isn't just about avoiding fines — it's about protecting your investment. Build good practices into your operations from day one. Stay current with changes in fair housing law. Most importantly, remember that treating all residents fairly isn't just legally required — it's good business.
Need more specific guidance? Talk with a local fair housing attorney or check HUD's online resources. Your local apartment association might also offer training and updates on fair housing requirements.