Real estate professionals must follow all Fair Housing Act laws. They are legally and ethically obligated to ensure their clients have fair treatment and equal access to housing. Failure of the real estate professional to comply with fair housing laws violates an agent’s fiduciary duties toward their client and violates protected classes. This article tackles what fair housing real estate is, prohibited discrimination activities, their enforcement, the latest statistics, and ways you can comply.
Disclaimer: While this article provides guidance accompanied by research, always seek professional legal advice if you or your clients experience a violation of real estate fair housing laws.
What Is the Fair Housing Act?
The Fair Housing Act (FHA) is a United States federal law created as part of the Civil Rights Act of 1968. It was created to prohibit housing discrimination during the sale, rental, or financing process. The law applies to single-family homes, apartments, and condos, regardless of whether they are sold or rented. The law also applies to mortgage lending, insurance, and marketing advertisements for housing.
The Fair Housing Act of 1974 and 1988 was amended to include additional groups of protected classes. Below are the FHA-protected classes determined by the Fair Housing Act as it stands today:
- Race
- Color
- National origin
- Religion
- Sex
- Familial status
- Disability
The FHA is a federally implemented law that acts as a baseline for states and local governments to create laws surrounding fair housing. Depending on the state, fair housing real estate laws have expanded protected classes under the Federal Housing Administration also to include:
- Gender, gender expression, and gender identity
- Citizenship status
- Partnership status
- Lawful occupation
- Ancestry
- Source of income
- Age
- Domestic violence victim status
- Genetic information
- Marital status
- Medical condition
- Sexual orientation
- Military or veteran status
- Primary language
- Criminal background
What Is Prohibited According to the Fair Housing Definition?
Real estate agents must understand that The Fair Housing Act and state-specific laws aim to protect their business and their clients against discrimination. The federal Fair Housing Act in real estate prohibits discriminatory activities in all aspects of housing and for landlords, agents, and lenders.
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However, there are certain exceptions to this law. The Fair Housing Act does exempt owner-occupied single-family buildings with four or fewer units sold and rented by the owner and housing operated by religious organizations or private clubs with limited occupancy to its members. Also, the FHA prohibits discrimination against familial status or age and senior housing with age requirements of 55 or 62 years of age, and communities participating in senior housing programs are exempt properties.
Fair Housing Act Enforcement
The Fair Housing Act empowers the U.S. Department of Justice (DOJ) to file a lawsuit against an individual or organization engaged in a “pattern or practice” of discrimination. The DOJ can also act if a group of people has been discriminated against in a way that raises a matter of “general public importance.” The U.S. attorney general can decide what constitutes a matter of “general public importance.”
The DOJ can sue under FHA for systematic mortgage discrimination or if a group’s denial of rights raises public concern. The DOJ can even file criminal charges when discrimination involves force or threats. Individuals who believe they have been discriminated against can file complaints with the U.S. Department of Housing and Urban Development (HUD) or initiate legal proceedings in federal or state courts. The DOJ may even provide legal representation to individuals based on HUD referrals.
When someone files a discrimination complaint, HUD is responsible for conducting a comprehensive and timely investigation. If conciliation is unsuccessful, HUD will determine whether federal laws have been violated. If there is reasonable cause to believe such laws have been violated, HUD will issue a Charge of Discrimination. Within 30 days, the person who filed the complaint or the respondent may choose to have the charge heard in a HUD administrative law court or federal court.
Federal Court Trial vs Administrative Hearing
Discrimination complainants can opt for a federal court trial or an administrative hearing by HUD. The former is represented by DOJ attorneys and heard by a judge or jury and may result in compensatory and punitive damages. The latter is represented by HUD attorneys and adjudicated by an administrative law judge, which may lead to civil penalties and compensatory (not punitive) damages. Both can issue written opinions and order injunctive relief, with the option to appeal to the U.S. Court of Appeals.
Special Considerations
Proving housing discrimination can be difficult, and collecting good evidence is helpful. Contact a local fair housing center or an attorney for guidance. Some states provide additional fair housing protections beyond federal laws. For example, New York State Human Rights Law protects against discrimination based on various factors, including creed, national origin, sexual orientation, gender identity or expression, military status, age, and lawful source of income.
Fair Housing Violation Statistics
Expanding your knowledge of Fair Housing real estate laws will give you a better understanding of how discrimination affects the real estate industry. Learn more about the statistics of Fair Housing Violations by referring to the data provided below. All these statistics are from the 2024 Fair Housing Trends Report released by the National Fair Housing Alliance.
- In 2023, 34,150 fair housing complaints were received by private non-profit fair housing organizations, HUD, FHAP agencies, and the DOJ.
- Private nonprofit fair housing organizations processed 75.52% of complaints, a 5.68% increase from the previous year.
- Discrimination based on disability accounted for the majority (52.61%) of complaints filed with FHOs, HUD, and FHAP agencies.
- There were 1,521 complaints of harassment reported last year, an increase of 66.23%.
- There were 824 complaints based on color reported last year; this represents an increase of 35.30%.
- California has the highest number of total complaints at 8,667. This number is 25% of the total fair housing complaints received by private non-profit fair housing organizations, HUD, FHAP agencies, and the DOJ.
5 Ways Real Estate Agents Can Comply & Protect Against Violations
When becoming a real estate agent, it’s crucial to thoroughly understand and comply with all national and state-specific fair housing laws. Violating the laws can lead to legal action and financial penalties that damage or end a real estate agent’s business. Therefore, real estate agents must understand how to protect themselves and their clients against FHA violations.
1. Know How to Answer Frequently Asked & Risky Fair Housing Questions
Real estate agents should be cautious when answering client questions about preferred neighborhood characteristics, location, and desired quality of living. Some of these questions relate to protected characteristics and could cause a violation of fair housing laws. Agents must focus on the properties themselves, have resources to direct clients to, and avoid making general assumptions when responding to their clients.
Below are some frequently asked client questions considered fair housing real estate violation examples and proper responses that will help you avoid violating the FHA:
‘Is this a safe neighborhood?’
It’s common for clients to ask about neighborhood safety to protect their families and loved ones from potential robbery, assault, burglary, and other crimes. When a client asks a real estate agent whether a neighborhood is safe, the agent’s response must be objective. Since individuals view safety differently, agents should refrain from answering neighborhood safety questions with their opinions or providing neighborhood crime statistics since this could indirectly reference a specific protected class.
Alternative solutions:
- Encourage clients to find crime information through general resources like local police websites, sex offender registries, and government websites. Be mindful not to recommend specific websites, as those websites could be misleading or contribute to steering.
- Suggest that your clients visit the area with a friend or family member at different times of the day to observe the neighborhood.
- Clients can speak to those living in the area or online social media groups to get a feel for the neighborhood.
‘Are there churches nearby?’
Clients may ask an agent if churches, mosques, or synagogues are nearby because they want to be close to their place of worship. However, clients asking this question may also be avoiding living near a specific group of people. Helping your clients find a home near their place of worship could be considered steering when agents suggest certain areas based on a protected class.
Alternative solutions:
- Direct clients to conduct their online search for the religious institutions they seek. Google Maps is a great resource for locating any business or address within a neighborhood.
- Drive around the neighborhood with clients or have them do so on their own so they can observe the surroundings and make notes if there are places of worship that interest them.
‘Are there good schools in the community?’
As neighborhood experts, real estate agents are commonly asked about the quality of school districts in certain areas. This question seems innocent coming from a parent or future parent. Still, this fair housing violation example could lead the agent down a slippery slope of potentially violating the Fair Housing Act. Real estate agents must be careful in their response to avoid steering clients to or from a particular school or school district and, therefore, specific locations.
Alternative solutions:
- Tell clients to do their research to ensure all their education needs and questions are met.
- Ask your client about their preferred school district location. Most parents will already know which school they want their child to attend. Performing a housing search for clients based on their desired location criteria does not violate fair housing laws.
‘Is the neighborhood good for families?’
Real estate agents should always avoid making assumptions about whether their clients have children, are married, or plan to expand their families. Familial status is a protected class by the Fair Housing Act, and saying anything related to their familial status can be discriminatory or deter their decision on housing.
Alternative solutions:
- During showings, real estate agents should never identify a room as good for a nursery, child’s room, or space for an au pair.
- Suggest your client check out the community website or social media boards to find activities that suit them best.
‘Is my service animal accepted?’
Clients questioning whether their service animal is allowed are usually in a rental or multi-family building. The U.S. Department of Housing and Urban Development defines a service animal as an animal that works and provides assistance or performs tasks that benefit a person with a disability. Assistance animals may also provide emotional support that helps alleviate the effects of a person’s disability. Assistance animals are not considered pets.
Landlords and property owners may not refuse housing and must provide reasonable accommodations for a person with a disability, including allowing service animals. Agents must be aware that although a service animal is accepted and properly documented, a landlord has the right to deny housing based on other factors that have not been met, like income requirements. Housing cannot be denied based on the animal since that would violate fair housing laws.
Alternative solutions:
- When asked if a service animal is accepted in a particular property, agents may respond to their clients with a “yes” but inform clients that other factors may be based on the landlord (insurance, financial, etc.).
- Instruct clients to prepare service animal documentation for the landlord or housing association.
- Know the service animal’s size, weight, age, and breed to provide proper information.
‘Is this building wheelchair accessible?’
Under the Fair Housing Act, physical and mental disabilities are protected classes. Real estate professionals must make reasonable accommodations for individuals with disabilities to ensure equal access to housing. Landlords can do this by modifying a dwelling to allow better access. For example, landlords can install grab bars or ramps on a property to make it more easily accessible.
Real estate agents should know landlords cannot always accommodate someone with a disability. According to HUD, the landlord can deny the request if the modifications or accommodations cause an undue financial and administrative burden on the property owner. An example would be asking to install an elevator in a building from the 1920s that does not have the capacity for it. Additionally, an owner can deny a request for a reasonable accommodation if the request was not made directly by the person with the disability.
Alternative solutions:
- All real estate advertising and marketing of properties must be inclusive. Do not include in your advertisement that a property is “within walking distance” from a neighborhood attraction.
- Avoid asking your clients, “What is your disability?” or answering the question, “Are there people with disabilities living in the building?” Instead, agents should inquire about your client’s particular needs or preferences for the property.
2. Review Your Advertising & Marketing Materials for Potential Fair Housing Violations
The language used by agents in marketing and advertising materials must comply with fair housing laws. Agents must avoid using words that can be discriminatory to a protected class in their property descriptions, websites, marketing materials, and real estate ads.
To eliminate real estate fair housing violations in advertising and marketing, agents should use inclusive language, avoid stereotypes and generalizations, and follow fair housing guidelines when creating materials. Agents should also be aware of the types of language and imagery perceived as discriminatory, such as words or phrases that imply preferences for a certain race, religion, sex, or familial status. Some examples of fair housing words to avoid and reasons for the fair housing violation:
| Discriminatory Phrase | Fair Housing Violation Examples & Why? | Alternative Phrasing |
|---|---|---|
| “Lots of storage space for Christmas decorations” | Religion: Mention of Christmas/Christianity | “Lots of storage for decorations, furniture, and other knick-knacks” |
| “Steps to the park” or “walking distance to the library” | Disability: Walking/steps is not possible for everyone | “Three blocks from the park” or “2 miles from the park” |
| “Low crime statistics in the neighborhood” or “safe neighborhood” | Could violate all protected classes: Crime statistics are subjective opinions and steering | “Picturesque neighborhood” |
| “Family-friendly” or “great for families” | Familial status: Cannot discriminate against those with or without families | “Large backyard”, “Parks nearby,” or “Extra guest room” |
Small changes to your marketing language can ensure you are not violating real estate fair housing laws. Ultimately, you want to market the property in the best possible light by highlighting its amenities, features, and special details that will appeal to the appropriate target audience.
3. Be Confident With Real Estate Testers
The Fair Housing Testing Program is a program to help fight against housing discrimination by sending testers to pose as buyers and renters. Testers are similar to mystery shoppers who pose as interested parties and document their interactions with real estate agents or property managers to assess whether fair housing laws are being followed.
These testers will gather evidence of discriminatory practices by real estate agents or property managers. They will call to inquire about listings or even attend open houses and showings and ask leading questions to see if you violate any fair housing laws. As an agent, being confident and professional when interacting with real estate testers is essential to ensure compliance with the Fair Housing Act. Here are some tips to be extra prepared if you encounter a tester:
- Be familiar with fair housing laws and the covered protected characteristics.
- Understand what is allowed regarding advertising, showing, renting, or selling properties.
- Regularly check HUD, DOJ, and your local state website for updates to real estate fair housing laws and regulations
- Attend training sessions at your local real estate board and brokerage
- Select continuing education hours that cover fair housing laws
4. Know Who to Contact When Discrimination Occurs
When fair housing discrimination occurs to you or your clients, real estate agents should know who to contact to report and address it. You can submit a claim with HUD online, via email, or physical mail. Document the incident in as much detail as possible, including the date, time, parties involved, actions, etc.
Here are some options for who to contact if a violation occurs or if you have fair housing questions:
| Agency | Website | Contact | Form |
|---|---|---|---|
| U.S. Department of Housing and Urban Development (HUD) | hud.gov | T: 202-708-1112 TTY: 202-708-1455 | Housing Discrimination Complaint Form |
| National Fair Housing Alliance (NFHA) | nationalfairhousing.org | Phone: 202-898-1661 Fax: 202-371-9744 TTY: 202-898-1670 | NFHA Preliminary Intake Form |
5. Promote Equality
Real estate agents and brokers should treat all clients equally regardless of their protected status. They should avoid steering clients to particular neighborhoods or properties based on their protected status and refrain from using discriminatory language in their advertising or communications. One way to avoid unintentional discrimination in your real estate practice is to use standard screening criteria for all applicants, such as credit and criminal background checks, and give all your clients the same information packet.
FAQs
What are the penalties for violating the Fair Housing Act?
In a civil lawsuit, plaintiffs may be awarded compensatory damages to cover their attorney’s costs and fees and non-economic damages to compensate for emotional distress. Punitive damages may also be possible. The amount of civil penalties varies depending on the nature and frequency of the offense. The penalty starts at $16,000 for a first-time violation, but it can escalate up to $150,000 for cases that the Justice Department prosecutes.
When did the Fair Housing Act pass?
The Fair Housing Act was a federal law that Congress passed shortly after the assassination of civil rights leader Rev. Dr. Martin Luther King. It was one of three significant pieces of legislation during the Civil Rights Movement. The Civil Rights Laws that affect the real estate industry help ensure that all clients are treated as equals.
Who does the Fair Housing Act protect?
The Fair Housing Act is in place to protect individuals who may face discrimination based on their disabilities, race, color, familial status, national origin, religion, and sex (including gender, gender identity, and sexual orientation). For more information about real estate housing laws, you can read our What Is RESPA in Real Estate? and 136 Real Estate Terms & Definitions Your Clients Expect You to Know articles.
When real estate professionals comply with fair housing laws, what are they helping to do?
When real estate professionals comply with fair housing laws, they help ensure equal access to housing for all individuals, regardless of race, color, national origin, religion, sex, disability, or familial status. Compliance with these laws helps prevent discrimination in housing and promotes diverse and inclusive communities. Failure of a real estate agent to comply with fair housing practices is punishable by removal of their license, fines, or more.
Bringing It All Together
It’s critical to your career to understand the definition of fair housing, take its laws seriously, and be proactive in preventing discrimination and promoting equal housing opportunities. Stay informed of any changes or updates to fair housing laws, and regularly review your practices to ensure compliance. By following these steps, you can help protect yourself against fair housing violations and ensure you provide all clients with equal housing opportunities.
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