5 Ways a Property Management Company Can Benefit Your Portfolio

Your rental portfolio is growing, and managing resident requests is getting more difficult. Maintenance at some of your properties needs extra attention, and renewals are just around the corner. There just doesn’t seem to be enough hours in the day for you. Just keeping up is leaving opportunities on the table.
It may be time to enlist the help of a property management company to handle the details.

The obvious upside to owning rental property is passive income. With owning investment properties comes negotiating obstacles that require time and extra money if not managed efficiently. Failing to efficiently navigate the difficult issues inherent to property management can stall growth opportunities and ultimately stall the portfolio’s growth.

“Property management is a problem-based business,” says Amelia Christensen, Director of Property Management for Homespot Property Management LLC . “If we don’t have problems, we really don’t have a job.”

Relationships are everything in property management

Christensen, who has been a property manager since 2011 at the family-based business in Portales, N.M., says even the smallest of single-family owners can benefit from letting someone handle the details. Property managers can be a buffer between owners and the resident and help find common ground with issues that concern both parties. In addition, companies like Homespot Property Management, LLC, can help with the entire scope of asset management so owners can improve their portfolios.

The key, Christensen says, is to work with a property manager that focuses on relationship-based management. Forging mutually beneficial relationships is how Homespot Property Management, LLC, has organically grown from managing 35 single-family properties in 2011 to more than 350. A couple of owners have about 30 properties, but smaller portfolios compose the rest the company’s business.

“Working with a property management company is a relationship based thing,” she said. “You need to have a good relationship. There are going to be mistakes made, there are going to be problems and you want to be working with someone who you’re comfortable working through problems with.”

A strong working relationship also helps create a greater bond with residents. With a property management company, the owner can let someone else help with unpleasant issues while improving relationships with residents.

“I have owners who talk to tenants and they’ll always say, ‘Go talk to Homespot for the details’,” Christensen said. “They don’t want to be the bad buy, they want to be the happy, good guy.”

It’s also a good idea to clearly understand the fees for the property management company’s services.

“You want to know what they are going to charge, how they charge it,” Christensen said. “Do they charge whether the property is rented or not, are there flat fees involved, or is it a percentage based off of rent, are there associated fees for handling maintenance repairs, that kind of thing.”

5 Benefits of working with a Property Management Company

Here are five benefits of working with a property management company, according to Christensen:

1. Keeping an eye on the details

A property management company keeps an eye on the little things entailed in day-to-day property management. Managing leases and renewals are key functions, as well as handling maintenance issues. Also, PMCs help plan for bigger maintenance issues like tree trimming, painting, repairs and owner improvements.

2. Charting a path

Determine what you want your rental portfolio to look like and enlist the help of a property management company to help plan for the future. A PMC can help the property owner take a look at the bigger picture and ultimately determine how the asset will be used toward achieving an end goal.

3. Asset and financial planning

In addition to handling the books through a property management system like Propertyware, PMCs can help owners know what to ask of their accountant for tax planning.

4. Handling the dirty work

Christensen says owners can empower experienced PMCs to do the background checks, collect money and manage the tough issues that go along with rental properties. She said often unknowing owners can duped by residents who want to take advantage of the system. “Most owners want to be the hero, you want to help someone out, but sadly there are people who take advantage of kindness.”

5. Provide that special touch

Christensen says good property management revolves around great relationships with owners. When the PMC and owner work in harmony, good things are accomplished. A PMC should be able to work with you to provide a level of service everyone is comfortable with.

“You have to have someone you can work with during the good times and even in the bad times,” Christensen said. “You have to be able to celebrate wins but be able to trudge through the losses. It’s part of owning rentals.”

Original article here

Positive 2017 Forecast for Rental Property Investors

According to Real Property Management’s economic report for landlords, which analyzes market conditions expected to contribute to the health of the rental industry. It predicts 2017 to be a bright year for single-family property investors, with key factors being rental and vacancy rates.

“Rental rate increases will outpace inflation in the coming year, while vacancy rates will remain stable,” said Bob Pifke, CMO of Property Management Business Solutions, LLC. “The market conditions that have made single-family home investments attractive in the past will continue in 2017, though it may be more challenging than before to find new rental properties. Foreclosure rates, housing price changes and mortgage rates will be important for those planning to buy or sell rental units.”
The following are predictions for investors in rental and single-family residences in the coming year:

  • Rental rates will increase faster than inflation. The current $1,459 rental rate for a three-bedroom single-family residence will exceed $1,500 in 2017. The supply of single family rentals is unlikely to increase enough to offset new household formation and population growth. Meanwhile, the consumer price index was 1.6 percent for the twelve months ending October 2016. Moving forward, inflation is likely to exceed 2 percent, but will still lag the year-over-year 4.8 percent rental increase at the end of the third quarter of 2016.
  • Vacancy rates will remain in the low 5 percent range. Vacancy rates for three-bedroom single-family residences through the third quarter of 2016 was 5.2 percent, down slightly from the 5.3 percent rate at the end of 2015. We expect vacancy rates to remain at this level, because rental increases will stabilize demand.
  • Mortgage rates will increase. In December, the Federal Reserve announced its second Fed Funds rate increase in ten years. It is extremely likely that additional increases will be made during 2017. That means mortgage rates in the 3% range will disappear. We expect rates to be in the 4% range for 2017.
  • Foreclosures will remain at a low level. Per CoreLogic, the seriously delinquent rate for foreclosures is currently 2.6 percent – the lowest level since August 2007. Barring a shock to the economy, Real Property Management expects foreclosures to remain low in 2017. This will make it more challenging for investors to find deals.
  • House prices will increase faster than inflation. According to S&P CoreLogic Case-Shiller, the national home price increased 5.39 percent through September 2016, and is now $274,000. However, housing prices have not yet returned to their 2007 peak. With an improving economy, it is likely housing prices will continue to grow. As mortgage rates increase, many homeowners who previously refinanced will find a replacement home more expensive. This will dampen their willingness to sell their existing house and limit the supply of existing homes for sale. Builders did not increase new home construction in 2016 compared to 2015.

Call Rental Management One to assist you with your Michigan investment properties! 

View source version on businesswire.com: http://www.businesswire.com/news/home/20170105005077/en/

Copyright Business Wire 2017


Michigan Landlords Can Say No To Marijuana

LANSING, Mich. — Michigan Gov. Rick Snyder has signed legislation that lets landlords prohibit medical marijuana patients from growing or smoking the drug on leased residential property.

The law enacted Tuesday adds another exception to a 2008 voter-approved law that legalized the use of marijuana for medical purposes.

That law already does not require insurers to reimburse people for medical marijuana, nor does it mandate that employers accommodate employees’ use of the drug for medical purposes.

The bill’s sponsor, Republican Sen. Rick Jones of Grand Ledge, says two rental homes in his district were destroyed after they were “turned into greenhouses to grow marijuana without permission.” He says growing marijuana for medical purposes “doesn’t trump safety or private property rights.”

Jones says the law codifies a 2011 state attorney general opinion.

Original Article: http://www.newsbug.info/business/snyder-signs-bill-to-let-landlords-bar-marijuana-in-rentals/article_5ada3752-cce4-5ec7-b9db-b9aa7a1208d8.html

10 Great Reasons to Have A Property Manager

When you hire a professional property management company, you save time, money, and lots of hassles. They can handle all aspects of your properties daily operations, legal aspects, and transactions, ensuring efficient management. There are many things you should know about such a service.

1. They screen the tenants
Every property owner wants to ensure that they have the best-possible tenants who pay their rent on time. Timely rent is the key to generating regular income. You want to find the kind of tenants who are careful about how they use the place and not cause any damages. Thus, you will not have a tenant who doesn’t pay on time or causes damage to your property.

2. They manage all the repairs & maintenance

Another good thing about a good property management company is that they manage all the repairs and maintenance for your property. Whether it’s the plumbing, electrical systems, equipments or building, the manager will arrange for the job work. They will also monitor the work to ensure quality compliance.

3. They Fill Up Vacancies & Ensure Optimal Retention

This is something that you cannot do on your own like a professional. No one wants properties to remain vacant. You will not have to spend all your time marketing your property. An experienced manager will shorten vacancy time by getting the right tenants. Besides, they will also work to ensure longer average retention.

4. They Deal with Legal Issues

An experienced property management service can handle one of the biggest challenges as an owner – legal issues. They know about the latest tenancy laws and can take the right action to prevent or alleviate legal tussles.

5. They handle all Documentation

Property management is not just about handling the day to day operations, it also involves a lot of essential paperwork. When you hire a professional service, you will not have to spend all your time dealing with potential-tenants’ credit reports, drawing the lease agreements, doing background checks, and dealing with the billing, and notices.

6. They already have Lists of Contractors

When you hire a property management service, they already have lists of contractors in the area. Whether it is fixing the plumbing, cleaning, or removing the snow, they will already know the right people to call for the job. They can also help you save more by getting special rates due to their well-established relationships.

A property manager will ensure that everything keeps running smoothly and efficiently. They will negotiate and secure contracts for clean-up, landscaping, trash removal, mowing, and other services.

7. They Deal with the Tenants

Your property manager acts as the contact with the tenants. A property manager will address all problems at all hours so that you will not have to drive over to the place. This means a lot of convenience and a hassle-free owner experience.

8. They Ensure Timely Payments

Another good thing about hiring the services of property management companies is that they take care of rental collection and bill payments. They will also enforce the lease policies if your tenants fail consistently to pay rents.

9. Get Tax Deduction

Property owners can also claim a tax deduction for the professional services of a property management company. Thus, hiring a property management service can help save money in several ways.

10. They Keep Everything Well Organized

One of the best things about hiring a property management service is that they keep everything organized for the owners. It can be almost impossible for you to keep track of all the details on your own.

Call Rental Management One for your free property evaluation and management quote today!

Tax Deductions Available for Rental Property Owners

Owning property is a huge part of the American dream, and at times it seems the IRS is trying to reward such behavior. In this article, I review the best federal tax deductions available to rental property owners in the United States.

What Qualifies as an Expense?

There are two types of expenses: Current Expenses and Capital Expenses.

Current Expenses

These are generally one-off items that help keep the property in good working condition and habitable, or help you operate your rental business.

The entire expense can be deducted from your taxes in the same year that it was incurred – hence “current” expenses. Repairs are generally expected to restore an item to its previous working condition.

To qualify as a current expense, it must be considered:

  1. Ordinary and Necessary
    Ordinary expenses are those that are common and generally accepted in the business. Necessary expenses are those that are deemed appropriate, such as interest, taxes, advertising, maintenance, utilities and insurance.
  2. Current
    Must have more short-term value than long-term value. Fixing a hot water heater has short-term value. Replacing the appliance has long-term value.
  3. Directly Related to your Rental Activity
    The expense must be business related.
  4. Reasonable in Amount
    If you claim to have paid $500 for a toilet seat, you will get audited.

Capital Expenses

Anything that increases the value of the property or extends its life is categorized as a “capital expense” or “improvement” and must be capitalized and depreciated over multiple years.

My general rule of thumb is any item that costs hundreds of dollars (or more) to replace should probably be deducted as a capital expense.

For a more detailed explanation and specific examples of each, read the article: Repairs vs. Improvements – What Can I Deduct from my Taxes?

Top 12 Tax Deductions for Landlords

Before claiming any of these deductions, be sure to have detailed and thorough records to back them up. Rental Management One provides all these records and documents for you to supply to the IRS. The IRS scrutinizes these deductions (some more than others), and you need to be prepared should you get audited. If you fail to have proper receipts and cannot validate the business necessity of each expense, you will have to pay the amount due, with interest, if you get audited.

1. Loan Interest/Points

If there is a mortgage on the property, the loan interest will probably be your single largest deductible expense.

In 2013, I paid $19,000 in interest on one of my mortgages. Further, if you paid buy-down points on the property purchase or mortgage refinance, you’ll be able to deduct those as well.

  • Mortgage Interest (primary & secondary)
  • HELOC Interest for loans used to repair or improve the property
  • Credit card interest on items used for the property
  • Mortgage Points to purchase or refinance a rental property

Keep in mind, you can only deduct interest on money that was actually spent on your rental business. Therefore, you wouldn’t be able to deduct the interest of a withdrawn line of credit that is sitting in your bank account.

2. Depreciation of Assets

There are, in general, three types of costs you need to capitalize and depreciate:

  • The value of the structure, not the land
  • The value of improvements – such as appliances, carpet, windows, countertops, etc.
  • Equipment/Computers/Laptops

These expenses cannot be deducted in a single year, but rather must be spread out (depreciated) over multiple years.

Otherwise, people would abuse the system by claiming $100K in repairs in a single year to remove all tax liability, and then sell the property the next year to recoup their renovation ROI.

3. Taxes

Often the real estate taxes are paid through the mortgage company, and therefore show up on the Form 1098 that is sent from the bank.

If the property is free and clear of any mortgage, CONGRATULATIONS!, but you’ll have to look up your tax records online if you didn’t keep receipts of those payments. Other business-related wage taxes, permit fees, or personal property taxes are considered allowable deductions as well:

  • State, County and City Taxes
  • Social Security Taxes for Employees
  • Medicare and Unemployment Taxes for Employees
  • Personal Property Tax/Vehicle Tax
  • Permit Fees/Inspection Fees

4. Repairs

Repairs are defined as any effort to maintain the current condition of a property or asset.

  • Painting/Spot Patching
  • Plumbing Repairs
  • Air Conditioning Repair
  • Fixture Repairs
  • Labor Costs/Contractors
  • Incidentals related to a repair
  • Rental Fees for Tools/Equipment

5. Maintenance

Maintenance costs are often confused with repairs, however with maintenance, you’re not necessarily fixing anything. For example, the lawn will always need to be cut but it is never really “broken.”

You can also hire a pest company to treat the property every few months to prevent further infestations, even if the original pests are long gone.

  • Landscaping and Tree Trimming
  • Homeowner Association Fees
  • Pool Cleaning, Chemicals and Maintenance
  • Pest Control and Treatment
  • Tune-ups on Lawn Mowers, Chain Saws, Leaf Blowers, etc.
  • Light Bulbs
  • Smoke Detector Batteries
  • HVAC Filters
  • Janitorial Items

6. Insurance Premiums

All business-related insurance premiums are tax-deductible. When trying decide if the insurance is business related, I ask myself, “Would I buy this insurance if I didn’t own a rental?”

I have an Umbrella Policy which covers my personal assets and legal liability above and beyond the coverage on my rental properties. Because of the added risk involved with one of my less-polished properties, I decided to purchase this additional coverage.

I would not have purchased this policy otherwise, and therefore I can classify it, in good conscience, as a business expense.

  • Homeowners Insurance
  • Mortgage Insurance Premiums
  • Fire/Damage/Liability Insurance
  • Flood Insurance Riders
  • Theft Insurance
  • Workers’ Compensation Insurance
  • General Liability Insurance
  • Personal Umbrella Insurance

7. Utilities

You can deduct the cost of any rental property utilities that you pay for. You are still allowed to claim utility expenses even if the tenants reimburse you later, but you also have to claim that reimbursement as income.

  • Electricity
  • Gas
  • Heating Oil
  • Water & Sewer
  • Trash & Recycling

8. Travel Expenses

50% of American Landlords do not live near their properties. Any long distance travel to visit your assets or to conduct rental business can be tax-deductible as a business expense.

  • Airline Fares
  • Car Rentals and Taxis
  • Hotels
  • 50 percent of meal expenses during long-distance travel

9. Vehicles

When expensing business vehicles, the actual asset must be depreciated over multiple years, however the upkeep can be deducted in the year the expense was incurred.

You have the option of deducting actual expenses, or utilizing a standard mileage rate of 56.5 cents per business mile driven (as of 2013).

  • Business Vehicles (depreciable)
  • Mileage or Gas/Maintenance/Usage of Business or Personal Vehicles

10. Management Fees

Even the best landlords need help, if you’ve hired a property manager, like Rental Management One, you are allowed to deduct that expense.

  • Property Management Companies
  • Individual Property Managers
  • On-site Manager
  • Condominium Association Fees
  • Special Assessments

11. Legal and Professional Fees

If you need to hire a pro, be it a lawyer, accountant or tax professional, you can expense the cost. If you ever have to evict a tenant, you can expense all reasonable court and filing fees.

  • Accounting Advice
  • Professional Tax Preparation
  • Tax Preparation Software (like TurboTax)
  • Structural Engineering and Consulting
  • Legal Fees
  • Lease Review and Editing
  • Court Filing Fees

12. Commissions

Occasionally, I will offer a $50 incentive to my current tenants if they find a replacement tenant upon their departure.

  • Commissions to Managers and Salespeople
  • Commissions for Tenant Referrals

A $25K Limit on Losses

According to the IRS, if you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income.

For Example: Lets pretend, you had $60,000 in depreciation and expenses for a given property in a single year, however that property only generated $20,000 in rental income.

This leaves you with a $40,000 loss (ouch!).

You can claim $25,000 of losses that year, but then you are allowed to “recapture” the other $15,000 in losses against your income the next year. If you continue to have losses beyond $25,000 year after year, you can recapture the sum of the unused losses against the gains when you sell the property.

Article written by
Edits in red by Rental Management One
Original Article available here: https://www.landlordology.com/tax-deductions-for-landlords/

Thinking About Becoming a Landlord? Avoid These 6 Rookie Mistakes

Putting your property up for rent can be tricky. Here’s how to sidestep six of the most common blunders.
Ever considered becoming a landlord? There are plenty of reasons you might. For some, it’s the temptation to scoop up a cheap property before the last of the deals vanish. Or maybe you’re like the 39% of homebuyers who told real estate firm Redfin that they’re interested in renting out their old place. Then there’s the lure of steadily escalating rents. The cost of renting the typical single-family home or apartment rose 4.5% in the past year, and spiked by more than 10% in the hottest areas, according to Trulia.
Becoming a landlord can be a profitable move, but learning the ropes requires some effort; it’s easy to take a misstep and end up in the red. “It’s not a passive investment, like putting your money in a mutual fund,” says Robert Cain, founder of landlord resource site Rental Property Reporter. Below, six slip-ups frequently made by newbie landlords, and strategies that will help you avoid making the same mistakes.

No. 1: Underestimating costs

You’ll most likely account for your insurance, taxes, and if you have one, mortgage. But you might miss expenses such as water, garbage, gardening, and regular repair and upkeep tasks. Even riskier, you may fail to put aside a large enough pot for unexpected expenses and big-ticket items. “Mom-and-pop investors tend to skimp on reserve and emergency funds,” says John Yoegel, author of Perfect Phrases for Landlords and Property Managers.
For a realistic estimate, plan for annual costs (not including your mortgage) to run at least 35% to ­ 45% of your yearly rental income, says Leonard Baron, who runs the real estate investor website ­ProfessorBaron.com. When calculating future income, it’s a good rule of thumb to include only 10 or 11 months of payments per year. After all, whenever a tenant moves out, you’ll still be stuck with expenses.

No. 2: Breaking the law

Tenant and landlord laws vary from state to state and even city to city. For example, in some areas, you can require a month-to-month tenant to move out within 15 days, while in others you must give him 60 days’ notice. Yet when real estate site Zillow quizzed landlords on basic rental laws, the average respondent missed at least half the questions. One easy way to avoid getting into legal hot water: Never buy generic lease or other tenant forms, which don’t account for local laws, from a general real estate site or a big-box store, says Cain. To get the skinny on what’s permitted in your town, talk to your local or state landlord or apartment owners association. These groups usually cost at least $50 to join.

You know that federal law prohibits you from denying a rental to someone based on race, religion, or gender. Keep in mind that it also means that you can’t advertise a place as perfect for female roommates or specify no kids. You may, however, include a cap on the total number of occupants or ban pets.

No. 3: Skimping on vetting prospective tenants

When you’re looking for a good renter, it’s not enough to trust your instincts, or even to go on a referral from a friend. “Landlords get in trouble when they are in a hurry to find tenants and when they feel sorry for someone,” says Cain.

Never rent your property without checking the prospective tenant’s credit, confirming the source and amount of income, and checking in with the current and previous landlords, he says. Look for income to run at least 2½ times annual rent. Sites such as E-Renter.com and MySmartMove.com provide credit and background details for around $25.

No. 4: Ignoring renters insurance policies

Landlord policies cover the structure of the home, your appliances, and liability in case of injuries or property damage. Not on this list? The tenant’s stuff. You may think that’s not your problem, but Michael Corbett of Trulia warns that renting to one of the 65% of tenants who lack a policy can cause problems if something goes wrong. “Tenants lash out when they realize they aren’t being compensated,” he says.

In places where it’s legal, such as California, he recommends requiring that renters purchase a policy (go to your local landlord association to check the law in your state). This may shrink your pool of potential tenants, but is likely to increase the odds that you end up with someone responsible. If that’s not an option, be sure to explain to your tenant that you are not covering his things, and suggest he buy his own insurance.

No. 5: Failing to check out the property regularly

Don’t count on your renter to tell you about problems. “A tenant will complain about an inconvenience, such as plumbing issues, but not necessarily something like broken rain gutters that can produce major problems down the road,” says Yoegel. What begins as a dripping pipe or watermark on the ceiling can quickly swell into a multi-­thousand-dollar repair if left unaddressed. “Water damage is a big one,” says Corbett. “It can be outrageously expensive to fix.”
While you must respect your tenant’s privacy and cannot legally enter the residence without advance notice, you should find a way to take a regular look at the property. One solution: Add a clause to the lease specifying that you or your property manager will inspect the home at least every six months. It’s also a good idea to drive by the place once a week or so to look for exterior trouble spots. Finally, swing by anytime work is being done; you can verify that the job goes as you see fit and take a quick glance around for other potential issues.

No. 6: Going DIY at tax time

The tax treatment of rental properties is nothing like that of your home, and keeping it all straight is nearly impossible for novice landlords. The rules of depreciation are a prime example. The IRS requires that you take a deduction for wear and tear on the property each year. However, “the rules say depreciation is ‘allowed’ or ‘allowable,’ so people assume it’s optional,” says Cindy Hockenberry of the National Association of Tax Professionals. If you don’t claim the deduction for depreciation, you’ll miss a yearly tax break. Then, when you sell, the IRS requires you to retroactively depreciate the home, and that’s likely to leave you with a larger-than- expected tax bill. Not tricky enough? Starting this year the government “complicated” the regulations about what types of repairs you can deduct annually, says Hockenberry.

The bottom line? Get a professional’s help—at least for the first year or two until you fully understand the rules. And don’t forget to keep receipts for everything: You can deduct all the costs involved in managing your property, including the mileage for all those drop-bys.
If you are seeking a professional property management company in Michigan to assist you with your rental or investment properties – call Rental Management One today. (248) 208-3882. 

Article written by: http://time.com/author/amanda-gengler-2/
See original article here: http://time.com/money/2800666/thinking-about-becoming-a-landlord-avoid-these-6-rookie-mistakes/

HUD ISSUES NEW GUIDANCE ON FAIR HOUSING PROTECTIONS FOR PEOPLE WITH LIMITED ENGLISH PROFICIENCY

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today issued “Limited English Proficiency” (LEP) guidance that addresses how the Fair Housing Act would apply to claims of housing discrimination brought by people because they do not speak, read, or write English proficiently. More than 25 million people in the United States do not communicate proficiently in English. Read the new limited English proficiency guidance here.

The Fair Housing Act prohibits both intentional housing discrimination and housing practices that have an unjustified discriminatory effect. People with limited English proficiency are not a protected class under the Fair Housing Act. However, the Fair Housing Act prohibits discrimination on seven protected bases, including national origin, which is closely linked to the ability to communicate proficiently in English. 
Housing providers are therefore prohibited from using limited English proficiency selectively or as an excuse for intentional housing discrimination. The law also prohibits landlords from using limited English proficiency in a way that causes an unjustified discriminatory effect.

“Having a limited ability to speak English should never be a reason to be denied a home,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Every family that calls this nation home has the same rights when it comes to renting or buying a home, regardless of where they come from or language they speak.”

Nearly 9 percent of the U.S. population is limited in English proficiency. Approximately 16,350,000 (or 65 percent) of these individuals speak Spanish, while 1,660,000 (7 percent) speak Chinese, 850,000 (3 percent) speak Vietnamese, 620,000 (2 percent) speak Korean and 530,000 (2 percent) speak Tagalog. Housing decisions that are based on limited English proficiency may have a greater impact on these and other groups because of their nationality.
The guidance addresses how various legal approaches, such as discriminatory effects and disparate treatment, apply in Fair Housing Act cases in which a housing-related decision – such as a landlord’s refusal to rent or renew a lease – involves a person’s limited ability to speak, read, write, or understand English.

Discriminatory practices, for example, could include applying a language-related requirement to people of certain races or nationalities; posting advertisements that contain blanket statements, such as “all tenants must speak English;” or immediately turning away applicants who are not fluent in English. Targeting racial or national origin groups for scams related to housing also constitutes intentional discrimination.

A housing provider also violates the Fair Housing Act when the provider’s policies or practices have an unjustified discriminatory effect, even when the provider had not intended to discriminate. Determining whether a practice has a discriminatory effect involves a three-step legal evaluation of the statistical evidence of a discriminatory effect; whether the housing provider’s policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest; and, if so, whether there is a less discriminatory alternative policy or practice.

In addition to the new LEP guidance, which is limited to the Fair Housing Act, HUD published a “Notice of Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons” in 2007.