Landlord Beware!

The New Jersey Division on Civil Rights (DCR), which addresses and prevents housing discrimination in New Jersey, has increased its enforcement measures over the past 18 months. The increase in enforcement coincides with a rise in DCR complaints by both current and prospective tenants alleging violations of the New Jersey Law Against Discrimination (the LAD) by their landlords.

With COVID-19 rental relief and other pandemic related subsidies having all but dried up, LAD compliance is something that should be on every landlord’s radar, as tenants look to obtain the most favorable leasing terms.

In April, New Jersey Attorney General Matthew Platkin and the DCR announced a partnership with third-party real estate and rental marketplace company, Zillow Group, Inc., to better address and prevent housing discrimination in the state.

Most landlords are aware of the landmark state law that took effect in January 2021 (the Fair Change in Housing Act) limiting landlords’ ability to consider a rental applicant’s criminal history.

LAD prohibits discrimination and harassment based on actual or perceived race, religion, national origin, gender, sexual orientation, gender identity or expression, disability, and other protected characteristics and applies to housing. The LAD provisions are broad, enabling tenants to make various LAD claims and tying them to discriminatory actions on behalf of a landlord within a single complaint.

Perhaps the best guidance for landlords in hopes of avoiding and defending against LAD claims is to treat every tenant equally, and similarly, looking solely at the financial wherewithal of tenants in its decision to rent, regardless of the source of that income.  Landlords cannot refuse to rent to potential tenants or discourage them from renting because they receive governmental rental assistance. This section of the LAD also encompasses any lease extensions for current tenants.

LAD liability also extends to property managers and brokers who may not even have an ownership interest in the subject property. Landlords should work with their property managers, realtors/brokers, and leasing teams to create a standard leasing application protocol, along with ensuring all employees are aware of what is permissible when onboarding prospective tenants. Owners of single-family homes and those with larger rental properties within New Jersey are all subject to the LAD and can face penalties up to several thousand dollars for each offense, with increased penalty caps for subsequent violations. These penalties are in addition to any legal fees and costs the respondents to a LAD complaint may incur in defending themselves in an LAD action. Since it remains unclear whether the DCR has the authority to award attorney’s fees to a respondent to a frivolously filed complaint, landlords may find themselves paying for the plaintiff’s legal fees.

The DCR, rightfully, has a strong interest in protecting tenants of all income levels (and other protected classes) against housing discrimination. Most landlords understand this and do not knowingly violate the LAD. They may still, however, get tripped up if they treat even one tenant differently or more preferentially than the others.