A Tennessee property management company has a written policy requiring all rental applicants to earn a minimum monthly income of three times the monthly rent. A prospective tenant with a disability whose only income is Social Security Disability Insurance (SSDI) fails to meet this threshold and is denied. The tenant files a complaint with the Tennessee Human Rights Commission alleging disability discrimination. Which of the following best describes the likely outcome of the complaint?
Correct Answer
B) The complaint may succeed if the tenant can show the income policy has a disparate impact on persons with disabilities without a legitimate business justification.
Under the Tennessee Human Rights Act (Tenn. Code Ann. § 4-21-101 et seq.) and the federal Fair Housing Act, a facially neutral policy — such as an income-to-rent ratio requirement — can still constitute illegal discrimination if it has a disparate impact on a protected class and the landlord cannot demonstrate a legitimate, nondiscriminatory business justification. Because persons with disabilities are disproportionately likely to rely on fixed government benefits like SSDI, an inflexible income multiplier policy may have a disparate impact on this protected class. The complaint's success depends on whether the landlord can justify the policy and whether the tenant can demonstrate the disparate impact.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
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