A recent housing discrimination case from Texas reminded me that there are still landlords/investors who just don't get it in the arena of fair housing laws. My fellow investors, here are the rules in a nutshell: You must offer your property to anyone that has the financial wherewithal and credit rating who can afford the rental payments despite these seven characteristics: race, color, nationality, sex, religion, familial status or handicap.

Poor Mr. Johnny Brown allegedly doesn't get this law. He is the most recent target of a U.S. Department of Housing and Urban Development lawsuit for discriminating against Bennie Rogers, an African American who wanted to rent a unit at Mr. Brown's building. In short -- the leasing agent told Mr. Rogers that Mr. Brown "doesn't rent to coloreds." Mr. Rogers reported this discrimination to HUD and Mr. Brown is now defending himself against a suit for violating the Fair Housing Act. A subsequent investigation demonstrated that Mr. Brown had only rented to one person of color 10 years earlier and that person was connected to a biracial couple.

Each month, I teach a fair housing class. Periodically, a student will approach the front and try to finagle around this law. "But what if my landlord just doesn't like the way the tenant sounds or looks? Doesn't he need to feel comfortable about who he's renting to?"

Of course the landlord needs to feel comfortable who he's renting to -- so long as his comfort level has nothing to do with race, color, nationality, sex, religion, familial status or handicap. A landlord's investigation of a tenant should include all financial aspects of their background and this can be done by hiring a competent Realtor or property management company.

If you need help understanding who's covered by the Fair Housing Act, visit www.HUD.gov and click 'Fair Housing' on the left side of the page. In the meantime, let's get this straight. Here are the Cliff notes as to what protected classes mean:

• Race: Caucasian, African descent, Hispanic, Asian, etc.

• Color: "Red and yellow, black and white, they are all precious in His sight" -- and that works for landlords, too.

• Nationality: If they've lived in any nation on the planet in the Milky Way at some point, you can't use it against them.

• Sex: Male and female.

• Religion: If they look above to the Creator or worship any of his creations (including Satan) you cannot use it as a means of discrimination. (Unless your property is distinctly a home for retired Baptist ministers, etc.)

• Familial status: If they have one or don't have one, you must offer the property to them if they want it.

• Handicap: You can't look at their physical challenges and decide you can't rent to them. You must, however, allow "reasonable accommodation" (meaning, you provide them a parking space closer to the door, etc.) and allow "reasonable modification" (if they want to widen doors, lower light sockets, etc., they can at their expense).

Depending on where you live, you may have other protected classes as established by your state or local jurisdiction, however, the local statutes cannot violate the federal statutes. Some other protected classes I've seen include:

• Sexual orientation: heterosexual, bisexual, homosexual.

• Age: too young, too old.

• Elderliness: elderly.

• Source of income: you cannot discriminate, for instance, if the person is on welfare or uses a Section 8 housing voucher to pay rent.

• Ancestry: Osama's kid can rent from you if he can afford it.

• Appearance: greasy hair is allowed.

• Political affiliation: Republican, Democrat, Libertarian, Communist, etc.

• Matriculation: students.

This is not an all-inclusive list, so do your homework as a landlord before making non-financial decisions on your tenant applicants.

What I really get a kick out of is when people try to define a protected class and even refer to protected class as "them." "Well, I doubt anyone in a protected class could afford my house, anyway," as one student told me. Get this down pat folks -- look at the above list -- we're all in a protected class, and that's the beauty of it.

Published: December 10, 2004

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Mr. Carr has covered real estate since 1989. He is the author of Real Estate Investing Made Simple. Got a personal real estate issue? Post your questions and comments at Anthony’s blog: commonsenserealestate.blogspot.com.