What You Should Know About Fair Housing

What You Should Know About Fair Housing

Agents have to work to protect people from discriminatory practices and educate other professionals on the laws we have in place. So, here’s what you need to know about discrimination in the industry — plus the fair housing laws that prohibit it

By John Giffen

As published in Inman News on June 14, 2020

Discrimination in housing is as real today as it was in the 1960s and 1970s and can be a serious issue for a real estate agent if they are not adequately educated and informed on the latest federal and state fair housing guidelines.  Unfortunately, fair housing laws are sometimes skimmed over in professional training  and continuing education courses as well as at brokerage sales meetings.  These laws are extremely important and a vital part of what we do every day in the real estate business and they need to be taken seriously.

Violating federal and state fair housing laws has severe consequences. The first offense of a federal fair housing violation carries substantial civil penalties imposed by the U.S. Federal Court system. Additional violations are much more significant and, in some instances, may carry a prison sentence.

Fair housing regulations must be followed by agents and managing brokers in the marketing of a firm’s property listings as well as the interaction with consumers who are considering selling or purchasing a home.  In light of the recent tragedies our country has witnessed in Minnesota, Georgia, and other areas, I want to remind all of us the importance of being in compliance relating to the fair housing rules we must follow.

Fair Housing in Property Marketing

Real estate licensees need to pay close attention to the language used in any advertising and marketing materials. This includes what is written in the “remarks” section of the Multiple Listing Service (MLS), on websites, and on social media platforms. The U.S. Department of Housing and Urban Development (HUD) and the U.S. Justice Department monitor language in real estate advertising to ensure there are no fair housing violations as noted in the Fair Housing Act of 1968 and subsequent amendments added with the passage of the Fair Housing Amendments Act of 1988.

There are words and phrases agents can and cannot use in their MLS listings and property marketing materials. Many REALTOR® associations publish a list of words classified as “RED,” “YELLOW” and “GREEN” – meaning a word or phrase should never be used, may problematic, or are fine to use, respectively. I would encourage you to reach out to your local REALTOR® association to obtain a copy of this list for your reference. Also, HUD has specific guidelines for agent and property advertising and marketing on their website: 

https://www.hud.gov/program_offices/fair_housing_equal_opp/advertising_and_marketing. The bottom line is this: as a general rule, describe the property, not the people who may live in the property.

Fair Housing and Consumer Discrimination

Along with federal rules for fair housing, individual states have laws to protect the public from discrimination in the sale and rental of real estate. Discrimination is a serious matter, and agents need to be well versed in federal and state fair housing regulations. HUD utilizes “testers” regularly to see if real estate agents are saying or doing anything that might be considered discriminatory. HUD testers are trained to disguise themselves as prospective buyer or seller clients. It isn’t easy to distinguish them from an actual buyer or seller.

In my second year of selling real estate, I am pretty sure I had a HUD tester contact me about a property I listed in south Nashville. Some of his questions concerned a large Hispanic population in the area around my listing. I think he was testing me to see if I would steer him away from that area because of the particular ethnic demographic profile. I can’t be certain he was from HUD, but based on the conversation I had with him, I am pretty sure he was one of their testers.

The Fair Housing Act prohibits certain categories of discrimination in housing. This federal law prohibits publishing advertisements indicating “any preference, limitation or discrimination based on” the protected categories “with respect to the sale or rental of a dwelling” [42 U.S.C. § 3604(c)]. The protected categories include:

1. race

2. color

3. religion

4. sex

5. disability or handicap

6. familial status

7. national origin

One area that is not a “officially” protected category is sexual orientation.  However, HUD does offer another option for those in the Lesbian, Gay, Bisexual, and Transgender (LGBT) community.  HUD’s Equal Access Rule, established in 2012, requires equal access to HUD programs without regard to a person’s actual or perceived sexual orientation, gender identity, or marital status. Housing providers that receive funding from HUD or have HUD-insured mortgage loans are subject to the regulations within the Equal Access Rule. A person who identifies as LGBT who has experienced (or is experiencing) discrimination by a HUD-funded or FHA-insured housing provider or lender may report it to HUD by either filing a complaint or by contacting a local Fair Housing Equal Opportunity (FHEO) office.

Housing discrimination is a serious in our country.  As real estate professionals, we must guard against it, and we should always be open to showing properties to anyone who is financially qualified.  The Code of Ethics and Standards of Practice of the National Association of REALTORS® clearly states REALTORS® will not willfully discriminate or violate state and federal fair housing laws in their real estate practice.  Take the time to review fair housing laws and the Code of Ethics on the latest in non-discriminatory practices in real estate.

Everyone – no matter who they are or from where they come – deserves a roof over their head if they can afford it.

More information on fair housing is available on HUD’s website – https://www.hud.gov/fairhousing as well at the NAR site – https://www.nar.realtor/fair-housing.

John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Franklin, Tennessee.  He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.”

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