A landlord in Nebraska got hit with a $45,000 settlement last year because of a Facebook Marketplace ad.

The ad said: "Perfect for a young professional couple." That's it. No slurs. No malice. Just a well-intentioned description that the landlord thought would attract good tenants.

It violated the Fair Housing Act. "Young" indicates an age preference. "Couple" indicates a familial status preference. The complaint was filed, HUD investigated, and the landlord settled because the language was indefensible under the statute.

Forty-five thousand dollars. For nine words in a rental listing.

Fair housing isn't theoretical. It isn't something that only applies to big apartment complexes or corporate landlords. It applies to every landlord, every property, every interaction with every prospective or current tenant. And the penalties for violations are severe enough to wipe out years of rental income.

The Federal Protected Classes

The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, amended in 1988) prohibits discrimination in housing based on seven protected classes:

Race

Color

National origin

Religion

Sex (includes gender identity and sexual orientation as of recent enforcement guidance)

Familial status (families with children under 18, pregnant women, people in the process of adopting)

Disability

Nebraska adds additional protections at the state level, including marital status and ancestry.

Discrimination doesn't require intent. You don't have to mean to discriminate. If your actions or policies have a discriminatory effect, you're liable. This is called disparate impact, and it's the legal doctrine that catches most well-intentioned landlords off guard.

The Five Mistakes We See Most Often

Mistake 1: Discriminatory Language in Listings

This is the most common and most preventable violation. Words matter. Phrases that seem harmless can constitute a fair housing violation.

Phrases that will get you in trouble:

"Great for young professionals" (age, familial status)

"Perfect for single occupant" (familial status)

"Near churches and synagogues" (religion)

"English-speaking preferred" (national origin)

"No kids" or "adults only" (familial status, unless it's qualified senior housing)

"Walk-in shower, no steps" marketed specifically to disabled persons (can imply you're steering)

What to say instead:

Describe the property. Not the ideal tenant. "Two-bedroom, one-bathroom apartment with hardwood floors, updated kitchen, and off-street parking." That's it. Let the property speak for itself.

If your unit has accessibility features, you can list them as features of the unit. "Ground-floor unit with step-free entry and grab bars in the bathroom." That's describing the property, not targeting a specific group.

Mistake 2: Inconsistent Screening Criteria

This is where self-managing landlords get into the most dangerous territory.

You can have screening criteria. You should have screening criteria. But those criteria must be:

Written down before you start reviewing applications

Applied uniformly to every applicant, without exception

Based on legitimate business reasons (creditworthiness, rental history, income verification, criminal background within legal limits)

The moment you approve Applicant A with a 580 credit score because "they seemed responsible" and deny Applicant B with a 590 credit score because "something felt off," you've created a disparate treatment situation. If Applicant A and Applicant B are members of different protected classes, you have a problem.

Our screening criteria are documented, published, and applied identically to every applicant. The criteria include minimum credit score thresholds, income-to-rent ratios (3x monthly rent minimum), landlord reference requirements, and background check parameters. If an applicant meets the criteria, they're approved. If they don't, they're denied. There's no "gut feeling" step in the process.

Mistake 3: Occupancy Standards That Target Families

You can set reasonable occupancy limits. HUD's general guideline is two persons per bedroom, though local codes and the specific layout of the unit can justify different standards.

What you can't do is use occupancy limits as a tool to exclude families with children. If you have a two-bedroom unit and your occupancy limit is "2 persons maximum," that effectively excludes a family with one child. That's a familial status violation.

We follow HUD's two-per-bedroom guideline as a baseline and adjust based on the actual square footage and layout of each unit. A large two-bedroom with a den might reasonably accommodate 5 people. A small one-bedroom might genuinely be limited to 2. The standard needs to be based on the physical characteristics of the unit, not on a desire to avoid families.

Mistake 4: Disability Accommodation Refusals

Under the Fair Housing Act, landlords must make reasonable accommodations for tenants with disabilities. This includes:

Allowing service animals and emotional support animals in no-pet properties (you cannot charge a pet deposit or pet rent for a service or support animal)

Allowing tenants to make reasonable modifications to the unit at their expense (grab bars, ramp installation, lever door handles)

Making exceptions to policies when necessary to give a disabled person equal opportunity to use and enjoy the housing (reserved parking for a mobility-impaired tenant, for example)

The key word is "reasonable." You don't have to approve every request. But you do have to engage in an interactive process. That means when a tenant requests an accommodation, you can't just say no. You discuss it. You consider it. If you deny it, you explain why it isn't reasonable and explore alternatives.

We've had tenants request emotional support animals in no-pet buildings. We require documentation from a medical provider (not a website that sells ESA letters for $49). If the documentation is legitimate, the animal is approved. No pet deposit. No pet rent. That's the law.

The landlords who refuse these requests outright are the ones writing checks to attorneys later.

Mistake 5: Steering

Steering is the practice of directing prospective tenants toward or away from specific units or properties based on their protected class membership. It's subtle, and it's illegal.

Examples:

Showing a Hispanic family units only in the building with other Hispanic tenants

Telling a family with kids "you'd probably prefer the ground-floor unit" (even if you think you're being helpful)

Recommending a specific neighborhood to a prospective tenant based on their race or national origin

Telling a disabled applicant "this building probably isn't a good fit for you" because it lacks an elevator

The fix is simple: show every available unit to every qualified prospect. Let them choose. Don't choose for them, even with good intentions.

The Compliance System That Protects You

Fair housing compliance isn't about memorizing a list of rules. It's about building systems that make discrimination structurally impossible.

System 1: Standardized advertising templates

We use pre-approved listing templates that describe physical features of the unit only. Every listing goes through a compliance check before it's published. No ad hoc descriptions. No creative writing about the ideal tenant.

System 2: Documented screening criteria

Written, published, applied to everyone. No discretion. No exceptions. If the criteria need updating, they're updated before the next application cycle, not in the middle of reviewing a specific applicant.

System 3: Application log

We log every application received, every screening result, and every decision (approved, denied, waitlisted) with the reason. If a complaint is filed two years later, we can pull the log and show exactly why each decision was made.

System 4: Annual training

Everyone on our team who interacts with tenants or prospective tenants completes fair housing training annually. Not a 10-minute video. A substantive training that covers current case law, common violation patterns, and scenario-based decision-making.

System 5: Reasonable accommodation process

We have a written process for handling accommodation requests. Request comes in, we acknowledge receipt within 48 hours, we request supporting documentation if needed, and we respond with a decision within 10 business days. Everything is documented.

The Cost of Getting This Wrong

Fair housing violations carry serious penalties:

First violation: Up to $21,663 in civil penalties (as of 2026 adjustments)

Second violation within 5 years: Up to $54,157

Third violation within 7 years: Up to $108,315

Private lawsuits can result in actual damages, punitive damages, and attorney's fees with no statutory cap

Beyond the financial penalties, a fair housing complaint creates legal costs ($5,000-$15,000 even if you win), reputational damage, and enormous stress. Most complaints take 12-18 months to resolve through HUD. That's a year and a half of uncertainty hanging over your business.

And here's the part nobody talks about: your insurance may not cover it. Many landlord policies exclude or limit coverage for discrimination claims. Check your policy before you assume you're protected.

The Bottom Line

Fair housing law isn't complicated. It's just unforgiving. The standard is clear: treat everyone the same. Apply the same criteria. Use the same language. Follow the same process.

The landlords who get in trouble aren't usually hateful people. They're people who made casual decisions without a system to keep them consistent. They used language they didn't realize was loaded. They applied "judgment" where they should have applied criteria. They said "no" to an accommodation request because it felt inconvenient.

Build the system. Follow the system. Every time. The cost of compliance is a few hours of setup and training. The cost of non-compliance is five or six figures and a legal headache you'll remember for the rest of your career.

If your properties aren't performing the way they should, let's talk. Reach out at Tanner@TopTierInvestmentFirm.com or visit toptierinvestmentfirm.com.

Tanner Sherman is the Principal and Managing Broker of Top Tier Investment Firm in Omaha, Nebraska. He co-hosts the Freedom Fighter Podcast with Ryan of Avara Investments.

The Fair Housing Mistakes That Could Cost You Everything