What Is The Fair Housing Act And How Does It Protect Home Buyers And Renters?
When you're looking to buy or rent a house, homeowners and perspective landlords can't decline your offer or otherwise discriminate against you based on protected characteristics enshrined in the Fair Housing Act. Learn more about your rights in the home buying or rental process and landlord responsibilities, starting with a baseline understanding of the law.
What Is The Fair Housing Act?
Title VIII of the Civil Rights Act of 1968 is more commonly referred to as the Fair Housing Act. States and municipalities often have their own provisions, so you may also see this referred to as the Federal Fair Housing Act of 1968.
Together with the Fair Housing Amendments Act of 1988, which expanded the existing act to cover more protected classes and strengthen penalties for violation, the Fair Housing Act prohibits discrimination in the sale, rental or financing of housing based on any of the categories mentioned in the law. It covers much of the real estate lending and housing market.
Enforcement of the Fair Housing Act falls under the jurisdiction of the U.S. Department of Housing and Urban Development (HUD). Complaints can be filed with HUD and if the agency finds a reasonable likelihood of success for a claim, the case can either be handled by an Administrative Law Judge who works for HUD or in federal district court.
Penalties for violation vary, but they can include compensatory damages, injunctive relief (making someone stop doing something) and civil fines. In cases of repeated offenses, past behavior may be taken into account.
In instances where states are found to have equivalent laws covering fair housing, complaints may also be referred to state agencies and courts.
Who’s Protected Under The Federal Fair Housing Act?
Under the Fair Housing Act, individuals are protected from discrimination based on any of the following characteristics:
- National origin
- Sex (including gender identity and sexual orientation)
- Familial status (whether someone has children)
Some states or municipalities have adopted laws of their own that cover the same types of – and in many cases extend – protections to groups not covered under the Fair Housing Act or impose additional penalties for violation. Examples of this include prohibiting discrimination based on age or marital status. Always familiarize yourself with all state and local laws that may apply so you understand your rights or the rights of potential buyers or renters.
Who Does The Fair Housing Act Apply To?
In general, the act applies to those involved in most sales transactions, rental, lending and appraisals. There are a few limited exemptions:
- Single-family home owners who sell their home without the assistance of a broker representing either the seller or buyer
- Renters within an owner-occupied home that has no more than 4 units
- Those in private clubs that are members-only
- Religious organizations
It’s important to note that even if someone qualifies for one of the above exemptions, they aren’t allowed to discriminate against you on the basis of race under the Civil Rights Act of 1968.
How Does The Fair Housing Act Prevent Housing Discrimination?
The Fair Housing Act prohibits various types of discrimination on the basis of a protected characteristic in the home selling, rental, lending and appraisal process. These include, but aren’t limited to, the following:
- Refusing to rent, sell or negotiate housing rentals or sales
- Making housing unavailable or lying about its availability
- Denying housing outright
- Changing terms and conditions for members of protected groups
- Providing different, and less appealing, housing or amenities to members of protected groups
- Blockbusting, or panic peddling, which is the act of manipulating homeowners to sell or rent their homes at a lower price by promoting fear and panic that minorities will be moving into the neighborhood and causing values to drop
- Steering potential buyers toward a certain neighborhood on the basis of their protected class or ideas of where the buyer should live, not where they want to live
- Denying participation in housing-related services like the multiple listing service
- Evicting tenants
- Failing to provide or delaying maintenance or repairs
- Denying a mortgage to an otherwise eligible applicant because they’re a member of a protected class
- Redlining, which is the act of denying a loan to an otherwise eligible applicant because they live in a certain neighborhood
- Making it more difficult for certain people to qualify by setting excessively high standards and making the loan process more burdensome
- Setting higher interest rates and more difficult terms and conditions on minority applicants
- Steering applicants away from certain types of loans
- Setting up different standards and procedures for late payments, penalties, foreclosures and other collections
- Not disclosing all information about the loan
- Lowballing, which is the act of making an extremely low property appraisal based on the property’s neighborhood (redlining), owners or potential buyers
- Using racially exclusive images
- Using ads that show an aversion toward members of a protected group
- Indicating a preference for individuals outside of a protected group
- Requesting tenants who speak certain languages
- Advertising that housing is available to a specific type of buyer and not to others
Who Enforces The Fair Housing Act?
HUD has jurisdiction over Fair Housing Act enforcement and has an agency, the Office of Fair Housing and Equal Opportunity (FHEO), dedicated to enforcing the provisions of the law, promoting civil rights in housing and eliminating housing discrimination.
The FHEO enforces these fair housing laws and policies in the following ways:
- Investigating fair housing complaints
- Hiring undercover individuals to apply for housing
- Performing compliance reviews
- Overseeing fair housing grants
As briefly discussed earlier, when HUD finds probable cause for a discrimination case, there is a charge filed with the office of Administrative Law Judges within HUD. The parties have 20 days to determine whether they want a ruling by this judge or to take the case to federal district court. If the case goes to court, the Department of Justice represents the complainant and the government.
What Should I Do If I’ve Been Discriminated Against In The Housing Market?
If you believe you’ve been the victim of housing discrimination, there are steps you can take to seek justice.
File A Complaint
The first step is to file a complaint with HUD. When filing, be sure to include the following information:
- Your name and address
- The name and address of those you’re filing against
- The address of the property involved
- A brief description of the event in which the alleged violation took place
- The date the violation happened
You can also file a civil lawsuit instead of or in addition to filing a complaint with HUD.
Remember, retaliating against any person for filing a complaint or assisting in the investigation is illegal. If you experience retaliation in this manner, you can file a complaint.
Allow HUD To Investigate
Once you file a complaint, HUD will notify you and those you’re filing against that they received the complaint. The alleged violator will be allowed to submit a written response. HUD will also investigate the complaint by:
- Gathering evidence
- Conducting interviews
- Inspecting properties
- Accessing specific documents
Once HUD completes the investigation, the FHEO will send a written report of its findings. From there, the case could be tried before a HUD administrative law judge or a federal judge, depending on what the parties decide.
Research State And Local Laws
Remember, there are state and local fair housing laws that may cover other protected classes that the Fair Housing Act does not. Make sure you also look up fair housing laws in your state and see how to take action if your situation falls under those instead.
Consult An Advocacy Group
For further assistance, you can also search for local fair housing advocacy groups that can advise how best to proceed where you live. These groups can provide advice whether you're just starting to look into your options or navigating the investigation process with HUD.
These groups may also be able to recommend a good attorney in the area of fair housing or provide you with one.
As A Landlord, How Can I Avoid An Accusation Of Discrimination?
If you’re a landlord and want to make sure you’re avoiding any inclination of discrimination, follow these best practices to screen applicants fairly:
- Have a standard, transparent application and screening process that’s the same for all tenants.
- Check your state and local fair housing laws to ensure you are also complying with those in addition to the federal laws.
- Make decisions on who to rent or sell to based strictly on factors that determine an applicant’s ability to pay their rent or mortgage. These factors may include credit score, credit history, referrals and income documentation.
If the idea of having to pick tenants makes you queasy, a property management company may be able to help with many of your landlord responsibilities.
Familiarize Yourself With All Relevant Laws
It’s important to understand not just federal but also state and local laws that may apply in the area you’re looking for tenants. This will protect you from legal trouble not only around accusations of discrimination or bias, but it will also clarify your responsibilities as a landlord. This way, you know what you can and can’t do in the event you need to evict, for example.
It never hurts to consult a good real estate lawyer on your rights and responsibilities. This gives you a resource if you have questions.
Make Your Application And Approval Process As Transparent As Possible
Having a consistent and transparent application process will allow you to make sure all parties are aware of what's required. Equal application across the board will help you avoid claims of bias in the process as well.
Establish A Quantifiable, Algorithmic Method Of Choosing Tenants
The goal should be to take subjectivity out of your application process. As an example, you might evaluate applicants based on credit score and history as well as income. If your decisions in screening tenants are based on objective data, it helps to insulate you from accusations of discrimination based on a protected characteristic.
Maintain Good Records Regarding Applicants
Good record-keeping is essential in being a landlord. Starting with the application process, you’ll be able to show the information you consider when screening tenants. If you need to evict, you’ll be able to show how many missed payments they had with your records and any attempts you made to work with them leading up to that point.
Additionally, the law also applies to things like discrimination in maintenance. Keeping records of any maintenance or improvements made to the property will be helpful in defending yourself. You may also be able to use this to write off certain expenses on your taxes.
Fair Housing Act FAQs
Does the Fair Housing Act protect people with disabilities?
The short answer is yes. Landlords must make reasonable accommodations to make housing accessible to people with disabilities assuming it doesn’t cause an undue business expense. Lenders also can’t discriminate on the basis of an individual’s disability.
While that’s a general explanation, what might be considered a reasonable accommodation or what the Americans With Disabilities Act calls a reasonable modification? It could be things like buttons on doors, making bathrooms accessible or installing a ramp. Moreover, landlords are required to allow assistance animals with proper documentation.
Does the Fair Housing Act protect the LGBTQ+ community?
In Bostock v. Clayton Cty., the Supreme Court ruled that members of the LGBTQ+ community are protected under the sex provisions of Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination. Following that ruling, HUD included sexual orientation and gender identity in its official list of protected classes.
Can a landlord discriminate if they live in the home?
One of the exemptions to the Fair Housing Act noted earlier was for landlords who also occupy a single-family home (one with up to 4 units). However, they still aren’t allowed to take race into account in tenant decisions. Additionally, they may have other restrictions on how they can evaluate potential renters based on state or local law. Consult a local attorney on your rights.
The Bottom Line: Housing Discrimination Is Illegal In The U.S.
The Fair Housing Act prohibits discrimination on the basis of seven protected characteristics including race, familial status and disability. If it’s not specifically contemplated under the federal law, other factors may be prohibited characteristics under state or municipal law. If you feel you’ve been discriminated against, you can start by filing a complaint with local authorities or HUD.
Now that you understand the Fair Housing Act, learn the importance of other regulations in the lending space to protect consumers, including the Truth in Lending Act.