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The Legal Blog, brought to you by NVAR's Professional Standards department, helps you stay on top of the latest rules and regulations in the industry.

Source of Funds and Property Management: Updates to the Virginia Fair Housing Law

By:
  • Daniel B. Harris Esq.
Sep 8, 2020
THE VIRGINIA FAIR HOUSING LAW (Virginia Code Ann. §§ 36-96.1 et seq. (the “Act”)) recites the policy of the Commonwealth to “provide for fair housing … to all its citizens … and … prohibit discriminatory practices with respect to residential housing…”

The 2020 Session of the Virginia General Assembly yielded several important revisions to the Act. Effective July 1, 2020, “source of funds” became a new protected class under the Act.

Q. What does “source of funds” mean?

A. In general, it is now unlawful to refuse to rent to another on the basis of the applicant’s source of funds. “Source of funds” is defined as “any source that lawfully provides funds to or on behalf of a renter or buyer of housing, including any assistance, benefit, or subsidy program, whether such program is administered by a governmental or nongovernmental entity” (§ 36-96.1:1).

Q. Are there any exemptions?

A. Yes. § 36-96.2 (I) states that “[n]othing in this chapter shall prohibit an owner or an owner’s managing agent from denying or limiting the rental or occupancy of a rental dwelling unit to a person because of such person’s source of funds, provided that such owner does not own more than four rental dwelling units in the Commonwealth at the time of the alleged discriminatory housing practice … [or] whether individually or through a business entity, more than a 10 percent interest in more than four rental dwelling units in the Commonwealth.”

Further, § 36-96.2 (J) states that “it shall not be unlawful under this chapter for an owner or an owner’s managing agent to deny or limit a person’s rental or occupancy of a rental dwelling unit based on the person’s source of funds for that unit if such source is not approved within 15 days of the person’s submission of the request for tenancy approval.”

Q. Do owners forfeit these exemptions if they retain the services of a real estate licensee?

A. The Act does not clearly remove the exemptions for owners, who otherwise are not subject to source of funds discrimination, solely because they use a real estate licensee.

First, §§ 36-96.2 (I) and (J) expressly exempt owners “and managing agents,” provided that the owner does not own more than four (or more than a 10% interest in more than four) dwelling units at the time of the alleged discriminatory housing practice (i.e. usually when the application is denied).

Second, source of funds is conspicuously missing from the statute which addresses unlawful conduct in residential real estate transactions. § 36-96.4 states that “[i]t is unlawful for any person … whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction … because of race, color, religion, national origin, sex, elderliness, familial status, sexual orientation, gender identity, status as a veteran, or disability.” If the Legislature sought to limit the exemption to only unrepresented landlords, it would not make sense to omit “source of funds” from the list of protected classes applicable to residential real estate-related transactions.

Q. If the owner is exempt, can I advertise that the owner will not accept applications from persons otherwise protected under the Act?

No. §§ 36-96.2 (I) and (J) only exempt the owner/managing agent from “denying or limiting” the rental or occupancy; other provisions in the Act would still prohibit advertising in a discriminatory manner.

§ 36-96.3 states that “[i]t shall be an unlawful discriminatory housing practice for any person to … [m]ake, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the … rental of a dwelling that indicates any preference, limitation, or discrimination or an intention to make any such preference, limitation, or discrimination on the basis of ... source of funds ….”
Because the Legislature added source of funds to this statute, licensees should not “[m]ake, print, or publish” any notice or advertisement regarding the owner’s preference as to source of funds.

For additional questions, contact the Legal Hotline at NVAR.com/LegalHotline.



Daniel B. Harris, Esq. is the NVAR staff attorney.
 
Group(s):
  • Real Estate Laws
Categories:
  • Professionalism & the Code of Ethics
  • Realtor® Professionalism