Understanding the Fair Housing Act: Protecting Buyers from Discrimination

This federal law protects renters and buyers from inequitable treatment throughout the process of securing a place to live. It prohibits sellers and landlords from discriminating between potential buyers based on their membership within a protected class. These are the population classes protected from discrimination under Federal and Tennessee law:

• Race
• Color
• Religion
• Sex
• National Origin (includes level of English proficiency)
• Familial Status
• Physical or Mental Disabilities
• Age

Essentially, real estate brokers are not allowed to consider any of these factors when granting access and exposure to their properties.

Any decision made throughout the process of advertising, selling, or renting a home that creates inequitable circumstances for a protected class qualifies as discrimination. Many of these infractions are obvious and blatant. Here are some real estate practices that, when motivated by a home seeker’s protective class, intentionally and clearly violate FHA standards of fairness:

• Specifying disparate conditions or privileges for sale or rental of a home.
• Making housing unavailable to a certain protected class.
• Refusing to rent or sell housing
• Refusing to negotiate for housing
• Denying access to entities, such as the multiple listing service, that facilitate the sale or rental of a dwelling.
• Failing to provide necessary maintenance or repairs to a rental property.
• Setting different standards and/or qualifying requirements for home seeker eligibility.
• Harassment, which includes exhibiting hostility, intimidation, or offensive conduct toward an individual.

The FHA applies similar constraints to the mortgage loan process. Lenders cannot deny a mortgage loan, set different standards for obtaining a loan, or withhold information regarding a loan based on a protected class. Furthermore, the terms and conditions of a loan, as well as the property appraisal process must remain consistent for all qualified clientele.

These flagrant discriminatory practices, however, are not the only prejudicial actions that undermine fairness in the real estate industry. Even when there is no intent to discriminate, actions that subtly privilege particular classes of people still violate the Fair Housing Act’s standards of integrity. These less conspicuous violations often occur in the following contexts:

Advertising

Marketing strategies can alienate specific sections of the population. When advertising materials describe an ideal renter, or suggest that certain demographic groups may or may not be suited for a property, they risk appearing prejudiced. Even seemingly benign marketing approaches can suggest favoritism. Phrases like “Great for Families” or “Perfect for Singles” within advertisements implicitly discourage other protected classes from pursuing housing options.

Steering

Guiding a buyer to specific neighborhoods or units that fit their demographic makeup, otherwise known as steering, violates FHA ethical standards. Real estate agents have a responsibility to expose buyers to a full range of possibilities. Using a customer’s superficial characteristics to make assumptions about their living preferences undermines their right to equal housing access.

Steering is especially prevalent when marketing properties to families. Tailoring a housing search to certain schools, recreational areas, or neighborhoods effectively limits families’ access to a complete array of options. Unless a residential option is exclusively intended for the elderly, and therefore exempt from certain FHA limitations, families deserve to decide for themselves if it’s the right fit.

Accessibility

Many housing units, especially condominiums and apartments, have accessibility requirements designed to accommodate people with disabilities. Some of these properties, however, do not fully abide by these standards. Nearly three out of every five formal housing discrimination complaints filed in 2017 involved issues with disability accommodations. When the need for reasonable modification or accommodation arises, landlords and sellers of these types of properties must provide an accessible environment for their clientele.

Criminal History

Individuals with a criminal history are not currently protected by the FHA. However, the Department of Housing and Urban Development (HUD) recognizes that certain demographic groups, especially Hispanic and African-American men, face disproportionately high rates of arrest and incarceration. Real estate brokers must ensure that their focus on home seekers’ criminal history does not disproportionately affect their overall treatment of a protected class.

• Vet potential buyers and tenants using standard questions that avoid references, both direct and indirect, to their membership within a protective class.
• Let buyers direct your search to the properties or units they want to see.
• Market the property by highlighting its selling points, then let the potential buyer decide if it is a good fit for them.
• When denying a buyer or renter, have a reasonable explanation for your decision.
• As a landlord, avoid making rules that might target particular protected classes.
• Unless you’re selling or renting an unattached single-family home, make reasonable modifications for people with disabilities in a timely manner.

In certain situations, renters and sellers are not subject to FHA regulations. This applies to:

• Single-family homes rented without the use of a real estate agent, provided that the owner does not possess more than three homes.
• Multi-family dwellings of four units or less, in which the owner is an occupant.
• Renting a single room in a home, housing administered by a religious organization, or qualified housing intended for seniors.

The original 1968 FHA legislation created the Department of Housing and Urban Development, or HUD, to investigate formal complaints of housing discrimination. In 2017 the agency handled over 20,000 such complaints. The HUD operates like a court of law in these housing-related cases, with the ability to depose and subpoena witnesses and to compel pertinent documents. While first-time violators face a maximum fine of over $20,000, habitual offenders are subject to penalties as high as $100,000.

Offenders in Tennessee could face further recourse from the Tennessee Human Rights Commission. This independent state agency executes full-scale investigations of discriminatory housing practices and levies penalties against offenders. Tennessee is also home to the Tennessee Fair Housing Council, a private, non-profit organization that receives HUD funding to eradicate unfair housing practices. In its 25-year history, this council has represented thousands of families victimized by discrimination and often proves a formidable adversary for FHA violators within the state. Felix agents respect and understand the regulations of both the FHA and Tennessee state agencies so that we can promote fair housing practices and keep sellers in the good graces of governing authorities.

Maintaining a fair housing market is more than a duty—it’s a calling that we at Felix Homes consistently honor. We offer features, like our very own proprietary search platform, that empower Nashville buyers to make independent home-buying decisions. If you would like to talk with us about how we foster equal housing opportunity or want to find out how we can facilitate your own search for a home, feel free to give us a call at 615-422-4277 or send us an email at contact@felixhomes.com.