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Fair Housing Act: What You Need To Know

6-Minute Read
Published on September 14, 2020

When you rent or purchase a home, a landlord, seller, real estate agent or lender can require a minimum credit score, verification of income and other proof you’ll be able to pay your rent or mortgage.

What they should never require is that you be a certain “type” of person. Unfortunately, in the past, this type of requirement was common and openly practiced, making it difficult for different minority groups to access housing. Today, this type of discrimination is illegal, thanks to the Fair Housing Act.

What Is The Fair Housing Act?

Signed into law in 1968 by President Lyndon Johnson, the Fair Housing Act of 1968 outlaws discrimination against home buyers and renters on the basis of race, color, disability, religion, sex, familial status or national origin. It authorizes meaningful enforcement and penalties against those who discriminate against a protected class.

Prior to the passage of this law, home sellers and landlords could refuse to sell or rent to people of color for any reason or no reason at all. Notices about houses for sale or rent often freely specified what nationalities, or races, were free to apply and which ones were not.

The federal Fair Housing Act, part of the Civil Rights Act of 1968, was passed to change that, seeking to prevent further discriminatory selling, renting and lending practices.

How Does The Fair Housing Act Seek To Prevent Discrimination?

The Fair Housing Act makes it unlawful to discriminate in any way based on a person’s race, color, religion, sex, national origin, disability or familial status when it comes to home sales or rentals, mortgage transactions or advertising practices.

Home Sales And Rentals

The following acts are prohibited under the Fair Housing Act:

  • 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

  • Evicting tenants

  • Failing to provide or delaying maintenance or repairs

Mortgage Lending

The following discriminatory lending practices toward a loan applicant or person associated with the loan applicant are prohibited under fair housing laws:

  • 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

Keep in mind, this list is not a complete list of illegal practices in mortgage lending, as any discriminatory practice violates the Fair Housing Act and the Equal Credit Opportunity Act.

Discriminatory Communications

Advertising for lenders, real estate agents, landlords and home sellers also falls under the Fair Housing Act, which prohibits the following advertising practices:

  • 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

These prohibitions also apply to sellers and landlords who are exempted from the Fair Housing Act, as listed below.

Other Prohibitions

Under the Fair Housing Act, it’s also illegal to threaten a member of a protected group or interfere with their fair housing rights. It’s also illegal to retaliate against an individual for filing a fair housing complaint.

Are There Any Exemptions From The Fair Housing Act?

Some circumstances exempt sellers and landlords from the provisions of the Fair Housing Act. These include:

  • Single-family homeowners who sell their home without the assistance of a broker representing either the seller or buyer

  • Rentals within an owner-occupied home that has no more than four units

  • Private clubs or organizations that are members-only

While these individuals are exempt from the Fair Housing Act, they cannot discriminate based on race, no matter what. That’s because the Civil Rights Act of 1866 prohibits racial discrimination, so there is never an exemption for this.

What Isn’t Covered By The Fair Housing Act?

Currently, federal law doesn’t prohibit discrimination based on:

  • Marital status

  • Sexual orientation

  • Gender identity

  • Receipt of public assistance

However, many state and local Fair Housing laws do protect those listed above. Curious about fair housing laws in your state? LawAtlas provides a map to identify fair housing laws by each state.

A person who identifies as LGBTQ and faces discrimination may still be able to file a complaint with the U.S. Department of Housing and Urban Development (HUD) if they feel the discrimination also falls under other protected classes.

For example, a landlord is willing to rent to a woman when communicating with her over email. The landlord then meets the potential tenant, who is wearing a dress, in person and finds out she is transgender. The landlord then refuses to rent to the woman.

In this scenario, the transgender woman could file a complaint based on sex discrimination, since the landlord may be discriminating against the tenant for not conforming to gender stereotypes, which the Fair Housing Act prohibits.

Who Enforces The Provisions Of 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 Fair Housing Act, 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

What Should I Do If I Have Been Discriminated Against?

If you believe you’ve been the victim of housing discrimination, start by filing a claim with HUD. When filing the complaint, be sure to include the following information:

  • Your name and address

  • The name and address of those you are 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

Once you file a complaint, HUD will notify you and those you are 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 and 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.

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.

For further assistance, you can also search for local fair housing advocacy groups that can advise how best to proceed where you live. 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.

What Are Best Practices For Landlords And Home Sellers To Avoid Discrimination?

If you’re a home seller or landlord and want to make sure you’re avoiding any inclination of discrimination, follow these best practices:

  • 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.

Summary: Know Your Rights To Fair Housing

Whether you’re renting or buying a home from someone or selling or renting one out to someone, it’s important to know whom the Fair Housing Act protects and what practices it prohibits. As a buyer or tenant, you need to know your rights so you can recognize discrimination and act on it. As a lender, agent, seller or landlord, you need to know the rights of your potential clients, so you can ensure you don’t violate them and wind up with a lawsuit or complaint against you.   

When it comes to home buying or selling, there’s a lot to learn. Check out our Learning Center for more resources on both topics.

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