The term “fair housing” is deceivingly simple, but the protections of the Fair Housing Act (FHA) are actually very broad. In general, the FHA protects against discrimination in housing practices based on one of the seven federally protected classes. (For a review of the protected classes, check out our articlefrom last week.) Some people think this simply means that sellers can’t take the protected classes into consideration when considering buyers for their house. Though that is a component of the FHA, the prohibitions are actually much broader. Below we explore some of the prohibitions:

The first thing to note is that the FHA protects against discrimination related to “dwellings”, a term that is defined broadly under the law and includes any building or structure which is designed to be occupied as a residence, as well as vacant land that will be used for that purpose. The best rule of thumb whenever in doubt, is to assume that the FHA applies to the property you’re working with. 

The Fair Housing Act is made of many sections, each of which has a different purpose. For example, some sections define terms, some sections list punishments for violations, and other sections explain what is considered a violation. Section 804 of the FHA contains many of the prohibitions that relate to real estate licensees. In general, Section 804 requires that all consumers have equal access to the opportunity to rent or buy a property. Prohibited behaviors under Section 804 include:

• Refusing to sell or rent, refusing to negotiate for the sale or rental of a property, or otherwise making a property unavailable based on a federally protected class;
• Discrimination in terms, conditions, or provisions of a sale or rental based on a federally protected class; and
• Making, printing, or publishing any notice, statement, or advertisement with respect to a property sale or rental that indicates a preference based on a federally protected class.

Section 804 also contains language prohibiting steering. In the context of the Fair Housing Act, steering is the practice of directing a consumer toward or away from a property or area based on a federally protected class. For example, if you were working with a Muslim client and only showed them properties near the local mosque, this could be viewed as steering unless, of course, the client requested to only see properties in that area.

Section 804 also prohibits blockbusting, which is the practice of inducing or attempting to induce for profit any person to sell a property motivated by the entry into the area of people of a protected class. An example of blockbusting would be telling a homeowner, “You better sell now, before all the young families come in and make the neighborhood loud and undesirable.” In general, if any consideration of your real estate practice is based on a federally protected class, it is likely to be a violation of Section 804.

Section 805 makes it clear that discrimination is not tolerated in any aspect of the purchase or rental of a property, even if the discrimination is not by the owner or their representative. The section also broadly prohibits discrimination in the transaction at large, including discrimination in loans and appraisals. The prohibition against discrimination in lending practices is not strictly for mortgages as it includes loans “for purchasing, constructing, improving, repairing, or maintaining a dwelling.” Section 805 was included in the FHA because of the history of financial and other institutions enacting policies that required different terms based on protected classes, such as offering less favorable mortgage terms to African-American buyers.

Section 806 further expands the protections of the Fair Housing Act to include discrimination in access to brokerage services. Specifically, it prohibits discrimination against protected classes in accessing MLS services, real estate brokers’ organizations, industry groups like the REALTORS® Association, or any other “facility relating to the business of selling or renting dwellings.” In this way, the Fair Housing Act not only ensures that both consumers and real estate professionals have equal protection against discrimination.