Fair Housing Laws for Real Estate Professionals

Fair Housing Laws for Real Estate Professionals

Modern Fair Housing laws come directly from the Fair Housing Act, which was passed in 1964. This Act protects people from discrimination when they are buying or renting a home, seeking a mortgage or housing assistance, and engaging in other housing-related activities. For federally assisted housing, there are additional protections above and beyond the scope of these. As a part of the Act, discrimination based on race, color, national origin, religion, sex, family status, or disability is prohibited.

Things You Cannot Do

For real estate professionals, the Fair Housing laws govern some of the interactions that agents may have with potential or current clients. Agents may not take any of the following actions against a member of any of the protected classes.

  • Refuse to sell to or negotiate during a transaction

  • Make housing unavailable

  • Set different terms, conditions, or privileges for the sale of a home

  • Falsely deny housing availability

  • Produce any content that indicates a preference, limitation, or discrimination with regard to the sale of a home

  • Set a different sales price

  • Use different criteria for different clients (such as income standards, credit analyses, and application fees or requirements)

  • Discourage the purchase of a dwelling

  • Persuade homeowners to sell their homes by suggesting that people of a protected characteristic are about to move into the neighborhood

  • Refuse or discriminate regarding the conditions of homeowner insurance

  • Deny access to any multiple listing service or real estate broker’s organization

Understanding the Regulations

While some of these requirements are very straightforward, others can be a bit harder to navigate. For instance, if a purchaser inquires about the neighborhood of a certain home, including data about crime statistics or schools, it can be interpreted as a reference to race and is, therefore, a violation of the Fair Housing Act.

Why Is Compliance Important?

In the event that a violation has occurred, as a realtor, you may be liable for paying damages to the victim, compensating for housing, and may even incur civil penalties in the form of governmental fines. This is true even in the event that you are acting on the instruction of a seller (e.g., they told you they wanted a young family to purchase the home).

Ultimately, as a real estate professional, it is a part of your responsibility to know what a Fair Housing violation looks like. Fortunately, there is much guidance about violations and how you can prevent them from the Department of Housing and Urban Development, including other scenarios in which discrimination may not be obvious.

Seeking More Information?

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