Mercedes Shaffer, Real Estate Broker

In today’s regulatory environment, housing providers are navigating an increasingly narrow path between compliance and liability—where even a single misstep in wording, policy, or process can result in legal exposure. What was once a straightforward business—screening residents, protecting property, and managing risk—has evolved into a highly scrutinized operation shaped by expanding interpretations of rent control and fair housing law.

For many housing providers, the concern is not simply about complying with the law. It is about the growing perception that enforcement mechanisms have shifted toward something that feels closer to legal entrapment than equitable oversight.

The Rise of “Tester” Litigation

A widely discussed example is the case of Sasha “Sade” Wanda in Los Angeles. Acting as a “tester,” she contacted housing providers posing as a prospective renter and asked whether they accepted Section 8 housing vouchers. When providers responded—often casually or without legal awareness—that they did not participate in the program, those statements were used as the basis for legal claims.

From a legal standpoint, this strategy is permissible. Under California law, particularly California Senate Bill 329, refusal to accept Section 8 can constitute discrimination based on “source of income,” which is a protected category.

However, I find the way this is being enforced questionable. It increasingly feels like people are actively out to “catch” providers—creating a sense that operators themselves have become the target.

Many of these interactions:

• Occurred over brief phone calls or initial inquiries
• Did not involve actual tenancy applications
• Relied on informal statements rather than formal policy decisions

Yet they still resulted in legal action.

Reports indicate that many of these cases were resolved through settlements—often in the $5,000 to $35,000 range. For small to mid-sized housing providers, these amounts are not insignificant. They represent real financial pressure, particularly when weighed against the cost of legal defense and the uncertainty of litigation.

The result is a system where providers often choose to settle—not because they believe they acted wrongfully, but because the cost of fighting exceeds the cost of resolution. In that environment, the structure of enforcement begins to incentivize individuals to make a career out of “testing” housing providers. From my perspective, a first-time misstatement shouldn’t trigger a lawsuit—this is the type of situation where a simple warning would be far more appropriate.

Expanding Obligations, Increasing Risk

The Wanda case is not occurring in isolation. It sits within a broader framework of expanding obligations placed on housing providers.

At a certain point, housing providers are carrying more risk, more responsibility, and more compliance exposure—while having less flexibility in how they operate their own properties.

The Core Friction: Policy vs. Practice

At the heart of the issue is a growing disconnect between legal theory and operational reality.

From a policy standpoint, these laws are designed to expand access to housing and prevent discrimination. From a practical standpoint, housing providers are being asked to:

• Assume greater financial and operational risk
• Navigate complex and evolving legal standards
• Avoid even inadvertent misstatements in everyday interactions

The introduction of testers amplifies this tension.

When individuals actively seek out non-compliant statements—often without any intention of renting—it creates an environment where it feels like housing providers are being targeted rather than regulated, bordering on what feels like legalized “entrapment.”

While not entrapment in the criminal law sense, the experience for many housing providers is similar:

• A question is asked
• A candid or uninformed answer is given
• That answer becomes the basis for liability

A Business Owner’s Dilemma

Housing providers are not only participants in a regulatory system—they are business operators responsible for asset preservation, risk management, and financial performance.

When compliance frameworks:

• Limit discretion
• Shift liability onto the provider
• And introduce enforcement tactics that feel adversarial

…it becomes increasingly difficult to operate with confidence.

There comes a point where regulation starts to undermine the ability to run a sustainable business—have we crossed that line?

Mercedes Shaffer is a multifamily real estate broker, serving Orange County and LA County. For questions about buying, selling or 1031 exchanges, contact her team at 714.330.9999, InvestingInTheOC@gmail.com, or you can visit their website at InvestingInTheOC.com BRE 02114448 REAL Brokerage