The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)


STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5318

June 21, 1978

CIVIL RIGHTS:

Discrimination in rental of housing based on income

LANDLORD AND TENANT:

Discrimination in rental of housing based on income

A landlord may refuse to rent to a potential tenant on the basis of income if the refusal is based on a good faith business determination that the potential tenant would be unable to meet the financial burden involved and not on the basis of race, color, religion, national origin, age, sex, or marital status.

Honorable Tom Mathieu

State Representative

House of Representatives

State Capitol Building

Lansing, Michigan 48902

You have requested my opinion as to whether a landlord may refuse to rent to a potential tenant solely on the basis of that individual's income.

The Civil Rights Act, 1976 PA 453, MCLA 37.2102 et seq; MSA 3.548(101) et seq, prohibits discrimination in housing based upon religion, race, color, national origin, age, sex, or marital status. 1976 PA 453 Sec. 501 states, in pertinent part:

As used in this article:

'(b) 'Real estate transaction' means the sale, exchange, rental, or lease of real property, or an interest therein.'

1976 PA 453 Sec. 502 defines prohibited acts for persons engaging in real estate transactions and states in part:

'(1) A person engaging in a real estate transaction, or a real estate broker or salesman, shall not on the basis of religion, race, color, national origin, age, sex, or marital status of a person or a person residing with that person:

'(a) refuse to engage in a real estate transaction with a person.

'(b) discriminate against a person in the terms, conditions, or privileges of a real estate transaction or in the furnishing of facilities or services in connection therewith.

(d) refuse to negotiate for a real estate transaction with a person.

'(e) represent to a person that real property is not available for inspection, sale, rental, or lease when in fact it is so available, or knowingly fail to bring a property listing to a person's attention, or refuse to permit a person to inspect real property.'

(Emphasis added)

There is no violation of 1976 PA 453, supra, if a refusal to sell, rent, or lease real estate is based on considerations other than on the reasons for discrimination made unlawful by the statute.

It is noted that, although religious preference, race, color, national origin, age, sex and marital status must not be taken into account in the determination of whether to enter into a real estate transaction, income level does not fall within the scope or coverage of the Act.

In Boyd v Lefrak Organization, 509 F2d 1110, 1112-1114 (CA 2, 1975), a private landlord required that a prospective tenant have a weekly net income equal to 90% of the monthly rental of the apartment. The tenant was refused an apartment because she did not meet the 90% rule. The suit claimed that the 90% provision violated the prohibition against racial discrimination in housing, in that the application of said rule excluded most welfare recipients, the majority of whom were from minority backgrounds, from obtaining housing. The court stated:

'Such an equivalency between race and income has been rejected by the Supreme Court in James v Valtierra 402 US 137, 91 S Ct 1331, 28 L Ed 2d 678 (1971) . . . the rule under consideration here cannot be said to rest on distinctions based on race . . . the reason for this inequality is not in economic level among these groups . . . a businessman's differential treatment of different economic groups is not necessarily racial discrimination and is not made so because minorities are statistically over-represented in the poorer economic groups. In order to utilize this co-relation to establish a violation . . . plaintiffs would have to show that there existed some demonstrable prejudicial treatment of minorities over and above that which is the inevitable result of disparity in income . . .'

The court concluded by saying:

'. . . [W]e will not impose an affirmative duty on the private landlord to accept low income tenants absent evidence that his motivation is racial rather than economic in origin . . . a landlord in the private sector is entitled to choose whom he will accept as tenants as long as he does not discriminate on one of the statutorily condemned bases. Certainly he may seek assurance that prospective tenants will be able to meet their rental responsibilities. 'There is no requirement that welfare recipients, or any other individuals, may secure apartments . . . without regard to their ability to pay' . . .'

See also Male v Crossroads Associates, 469 F2d 616, 622 (CA 2, 1972)

The decision that a landlord may refuse to rent to a member of a protected class due to indications of the applicant's inability to pay has been enunciated in a number of other New York cases. In State Commission for Human Rights v Callan, 293 NYS 2d 249, 252; 57 Misc 504 (1968), the court stated that:

'The manifest purpose and intent of the Law Against Discrimination is to provide equal protection for all people of this state, regardless of race, color, creed, or national origin. Respondents have as much right to that protection as any other segment of our community. There is no law which requires a landlord to rent housing accommodations to persons of questionable financial means . . .'

An owner of property can therefore in good faith base his decision to enter into a real estate transaction on any factor which is not a prohibited basis for discrimination. See also State Commission for Human Rights v Kennelly, 291 NYS 2d 686, 689; 30 AD 2d 310 (1968); State Commission for Human Rights v Harvey Properties, 271 NYS 2d 365, 369; 50 Misc 2d 672 (1966); Madison v Jeffers, 494 F2d 114 (CA 4 1974); Ford v Wisconsin Real Estate Examining Board, 48 Wisc 2d 91; 179 NW 2d 786 (1970).

Therefore it must be concluded that it is legally permissible for a landlord to refuse to rent to a potential tenant solely on the basis of income if the refusal is based on a good faith business determination that the potential tenant would be unable to meet the financial burdens involved and not on the basis of race, color, religion, national origin, age, sex or marital status.

Frank J. Kelley

Attorney General