The Reader’s Digest version of this post, for those who prefer that kind of thing, is “No.” Just no. Only in very rare cases, can you convert an existing rental property from a traditional residential rental (welcoming families with children), to a 55+ property, under the exemptions contained in the Housing for Older Persons Act of 1995 (HOPA).
A property manager recently asked me whether her client could declare the client’s duplex a “55+ Community,” ‘since it’s a multifamily property.’
First, I suggested he talk to his lawyer, or Silver State Fair Housing Council. Then, “A duplex isn’t a ‘multifamily’ property. That term generally applies to 4+ units. Since this property is not part of a larger ‘association’ of similar properties who’ve formed an association… and, since there are no governing documents for your client’s property that address any kind of HOPA exemption, no. No, your client can’t do that.”
The “Mom and Pop” exemption exists, only if a real estate broker isn’t involved in the rental or sale of the property.
Perhaps, if your client were to rent and manage the duplex herself (without your help, or help from any other agent), she could refuse to rent to families with children. But, and this is a big one…she could not advertise that preference. In other words, she couldn’t say “55+,” or “mature tenants wanted,” or anything that may imply children aren’t welcome in the property.
Bottom line is, if she doesn’t want to rent to families, she’s going to have to screen them out without saying so. That may seem silly, but case law tells us that HUD 24 CFR 100.75 applies to everybody. No exemptions exist for advertising statements, whether verbal or written.
It all comes down to this…
Sometimes, our assumptions can get us into trouble. Why would we assume that renting to families with children would be a problem? Noise? I’ve heard a lot more noise from some adults than I have from a family with a few kids. Damage? Well, the renter who cut a huge hole between his apartment and the one next door did a lot more damage than any family I’ve ever rented to. Perceived liability? I’d say that refusing to rent to (or discouraging) families creates a whole lot more liability than anything the family might do while renting your property.
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