COACH's Pop Quiz!

HUD recently issued guidance warning landlords of their fair housing liability risks when using digital advertising platforms that utilize artificial intelligence (AI). What’s the best strategy for a landlord who deems it highly beneficial to use an AI-based ad platform to manage the potential liability risks involved?

a.         Avoid digital advertising just to be safe

b.         Use due diligence to select an advertising platform that’s likely to comply with fair housing law

c.          Require the ad platform provider to assume all of the liability risks of the ads it places

Answer: b

Reason: By being aware of the liability risks associated with digital advertising, the landlord has already won half the battle. The next step is to manage those risks. While the law remains unsettled, the clear implication of the new HUD guidance is that the agency won’t hold housing providers liable for discriminatory digital advertising as long as they take reasonable measures to ensure that their advertising content is nondiscriminatory. The best way to do that is to follow the five best practices set forth in our June 2024 lesson, HUD to Landlords: Make Sure Your Digital Ads Don’t Discriminate, particularly in selecting an advertising platform that has wired itself to flag and defuse potential FHA issues in housing ads. So, b. is the right answer.

Wrong answers explained:

a. is wrong because nothing in the HUD guidance or related policy pronouncements suggests that landlords shouldn’t use digital media to advertise housing opportunities. Rather, the point is for landlords to beware of the discrimination risks embedded in digital advertising media when applied to housing and take steps to ensure the content and placement of their own digital ads aren’t based on protected characteristics or otherwise discriminatory.

c. is wrong because of the long-established rule that the landlord’s fundamental duty to comply with the federal Fair Housing Act and other fair housing laws cannot be contracted out of or delegated. In essence, landlords remain on the hook for discrimination committed by their agents and vendors.