Fair Housing and Lead-Disclosure Fines Are Frozen for 2026: The Exact Federal Penalty Caps Out-of-State Landlords Face

On September 24, 2026, HUD published a two-page notice with an unusual message: its civil money penalties will not rise for inflation this year. The Justice Department and the FTC had already said the same. For an out-of-state landlord, that means the fines behind the two federal rules most likely to catch a small, remote owner, fair housing and lead-based paint disclosure, stay at their 2025 levels for all of 2026.

What happened (fact)

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires agencies to raise civil penalty caps every year. The raise is based on the change in the October Consumer Price Index (CPI-U). Because of the 2025 government shutdown, the Bureau of Labor Statistics never produced October 2025 CPI data. On April 17, 2026, OMB told agencies in Memorandum M-26-11 that there would be no 2026 adjustment and that they should “continue using the 2025 civil monetary penalty levels.”

The agencies that matter to landlords have now said so in the Federal Register:

• HUD, 91 FR 60637 (September 24, 2026): “all HUD civil money penalties are maintained at their 2025 level.”
• DOJ, 91 FR 43405 (July 15, 2026): no adjustments in 2026, with a “thorough review” planned for 2027.
• FTC, 91 FR 58446 (September 15, 2026): 2025 levels continue through 2026.

The numbers that apply to a rental owner

These are the maximums printed in the Code of Federal Regulations today (eCFR, current through September 22, 2026):

These are penalties paid to the government. They come on top of what a tenant can recover. The lead disclosure statute, 42 U.S.C. 4852d(b)(3), makes a landlord who knowingly violates it liable to the tenant for three times their damages, plus attorney fees. The Fair Housing Act separately allows actual and punitive damages.

The misconception: “I only own a couple of houses, so fair housing law doesn’t apply to me”

The Fair Housing Act does have a small-owner exemption at 42 U.S.C. 3603(b)(1), for a private individual who owns no more than three single-family houses. It is much narrower than most people think, and remote owners usually lose it:

• It applies only if the house is rented without “the sales or rental services of any real estate broker, agent, or salesman” or anyone else in the business of renting dwellings. Hire a property manager or leasing agent, as almost every out-of-state owner does, and the exemption is gone.
• It never covers discriminatory advertising. Section 3604(c) is expressly carved out, so the wording of a listing is covered even when the rest of the transaction is exempt.

Timing matters too. A person can file a complaint with HUD up to one year after the practice occurred or ended, and can sue privately up to two years after.

How the penalty is counted

For HUD fair housing cases, the cap applies per “separate and distinct discriminatory housing practice.” Under 24 CFR 180.671(b), that is a single, continuous transaction. It counts once even if it breaks several provisions or affects several people. However, 180.671(e) lets a judge assess a separate penalty against each respondent, so an owner and the owner’s management company can each be fined.

The lead disclosure rule applies to leases of “target housing” (generally pre-1978). Exceptions under 40 CFR 745.101 include leases of 100 days or less with no renewal possible and units certified lead-based-paint free. A renewal is exempt only if you already made the full disclosure and no new information has come into your possession. A new risk assessment or dust-wipe report counts as new information. Landlords and their agents must keep the signed disclosure for at least three years from the start of the lease (40 CFR 745.113(c)).

What this means for you (interpretation, not fact)

• The freeze is not a discount. Keeping a cap at $26,262 instead of raising it by a few hundred dollars changes nothing about your exposure. It does give you stable numbers for reviewing indemnity clauses and insurance limits.
• 2027 is an open question. Next year’s adjustment normally compares October 2026 CPI with October 2025 CPI, and the October 2025 figure does not exist. DOJ says only that it will review the issue in 2027. Do not assume any particular 2027 figure until the agencies publish one.
• Your agent’s mistakes are your exposure. Both regimes reach the owner as well as the agent. For a remote owner, the practical control point is the management agreement and the listing copy, not the statute.

A five-step check for this quarter

1. Pull every active and recent listing your manager ran for your units and read the wording yourself. Watch for phrases about family status, age, disability, or source of income where state or local law covers it.
2. Confirm that your property management agreement requires fair housing training and compliance, and see who indemnifies whom.
3. For every pre-1978 unit, ask your manager for the signed lead disclosure on each current lease and confirm that copies are kept for three years.
4. If you received any new lead report this year (for example, from an HCV inspection), re-disclose at the next renewal. Do not rely on the renewal exemption.
5. Put the current caps in your files next to your insurance declarations page, and check again when the 2027 figures are announced.

Related reading: how to manage out-of-state real estate by yourself, the DOJ’s rent-pricing software filings, the federal 30-day notice to vacate that is still in force, and whether out-of-state investing is right for you.

This article is for general educational purposes only and is not legal, tax, financial, lending, or investment advice. Penalty amounts are statutory maximums as published at the time of writing; actual penalties depend on the facts of each case. Consult a qualified attorney about your specific situation.