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How to Prevent a Department of Fair Employment and Housing (DFEH) Complaint

California’s Department of Fair Employment and Housing (DFEH) maintains the authority to investigate complaints of discrimination in the areas of employment, housing, public accommodations and hate violence.

Many persons believe they have been treated unfairly or harassed in employment opportunities, in renting or purchasing a home, or in receiving service in a business establishment. The DFEH can accept cases only based on possible violations of the Fair Employment and Housing Act (FEHA), the Unruh Civil Rights Act, the Ralph Civil Rights Act, or the Disabled Persons Act.

Such claims of discrimination also pertain to a prospective tenant’s use of an approved “service animal”. Under California’s Fair Employment and Housing Act, waiver of pet restriction rules in a written lease between a landlord and a tenant — such as the prohibition of pets, pet deposits and restrictions on the size, weight and breed of a dog or other in-house domesticated animal (such as a cat) — are deemed a reasonable accommodation.  That’s because service and companion animals are deemed under the law as being more than “just pets”. Like the federal law, the tenant in private rentals in California must qualify and obtain a licensed physician’s written confirmation of a recognized “disability” in order to obtain a waiver of a landlord’s “no pets policy.”

The landlord cannot legally increase a tenant’s security deposit, because of a service or companion animal per a treating physician’s order, under federal and state law beyond what the landlord typically has for other tenants in his or her rentals. Companion and service animals are seen under the eyes of the law as “treatment” for a person’s mental or physical condition. Just how a landlord cannot legally charge a tenant “an extra security deposit” who may have to use a wheelchair, the landlord cannot charge a tenant who has a companion or service animal a security deposit that is not similar to his or her other tenants’ or is vastly disproportional than prior tenant security deposits for other rentals that the landlord has.

However, under California law, the tenant is responsible for all damages caused by his or her service or companion animal.

For a real estate licensee in California who is either the listing or selling agent in a buy sell transaction or a property manager, the best way to prevent a DFEH complaint is to first have a carefully drafted listing agreement, buyer broker exclusive or property management agreement.  The agreement should state: “it is illegal in California to discriminate against a person in the areas of employment, housing, public accommodations and hate violence”. This disclosure needs to be dated and signed by all clients and kept in the licensee’s file, preferably with a hard and electronic copy for safe keeping.

Most DFEH claims arise in landlord tenant matters. If you are a property manager, it is very important that in the property management agreement that it is dated and signed by the property owner and landlord, that the property manager is named as an additional insured under the property owner’s and landlord’s insurance policy for the property that is intended to be rented out. Also, the property manager will receive a declarations page to that effect within 15 days or so after the property management agreement is entered into.

The property management agreement should clearly state that the property manager has no say as to who is ultimately selected as a tenant, in that the decision is solely made by the property owner and landlord. Likewise, the tenant application used for a background check by the property owner and landlord should also clearly state in large dark type: “The property owner and landlord makes the decision as to who will be selected as the tenant sought to be leased out. The property manager has no influence or say in such decision.”

Contrary to many mistaken beliefs, the property manager of a rented or leased out building (commercial or residential) is not the landlord. Only one who has ownership interests of record can be a landlord.

Given the fact that California’s real estate rental market often has more applicants for available rentals, there will be many unhappy people who do not get the rental they desired. The best way to help diffuse an applicant who was not accepted by the landlord and property owner is for the landlord/owner to send a letter or email (saved in the licensee’s file) to the applicant:

  • Thanking him or her for the interest
  • Advising there were many other applicants where the one ultimately selected by the landlord was financially stronger than the other applicants
  • The landlord will keep his or her application on file for future reference.

My experience in real estate matters is it pays to be pleasant and nice to a rejected rental applicant where the opportunity to possibly rent in the future is left open.

About the Author

Edward McCutchan

B. Edward McCutchan, Jr.

Sunderland | McCutchan, LLP

Mr. McCutchan’s practice is primarily civil litigation with an emphasis in defending professionals and businesses in real estate, mortgage brokering, construction, banking and agricultural industries and all phases of dispute resolution through trial and appeal. His area of practice is also agricultural law (viticulture and wineries), trusts and estates, probate, real estate transactions, business law and elder abuse. B. Edward McCutchan, Jr. was admitted to the Bar in 1985 and is admitted and qualified to practice in all California courts and the U.S. District Court, Eastern and Northern Districts of California as well as the United States Tax Court.

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