Fair Housing Definition: A Comprehensive Guide for Real Estate Agents
Gina is a licensed real estate salesperson, experienced trainer, and former high school educator of 1,000+ learners. She writes for Fit Small Business with a focus on real estate content.
Aloun Khountham is a contributor to Fit Small Business. Her real estate experience stems from over five years as a New York City real estate operations executive focused on implementing processes, procedures, and new technology solutions designed to help agents succeed.
This article is part of a larger series on How to Become a Real Estate Agent.
Real estate professionals must consider all Fair Housing Act Laws because they are legally and ethically obligated to ensure their clients have equal opportunity access to housing. Failure to comply with fair housing laws can result in damage to a real estate agent’s reputation, financial liability, and overall loss of business. Make sure you are well versed with the fair housing definition and regulations, so you don’t put your license, clients, and business at risk.
Disclaimer: While this article provides basic guidance accompanied by research, you should always consult legal advice if you and/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 process of a sale, rental, or financing. The law applies to single-family homes, apartments, and condos regardless of whether it’s sold or rented. The law also applies to mortgage lending, insurance, and marketing advertisements for housing.
Protected classes (Source: Equal Rights Center)
The Fair Housing Act of 1974 and 1988 was amended to include additional groups of protected classes. Below are the protected classes determined by the Fair Housing Act as it stands today:
- Race
- Color
- National origin
- Religion
- Sex
- Familial status
- Disability
The Fair Housing Act is a federally implemented law and acts as a baseline for states and local governments to create their own laws surrounding fair housing. For example, New York City Human Rights law adds that you must not discriminate in housing based on actual or perceived race, any lawful source of income, or children residing in such space.
In California, you may not discriminate based on sexual orientation. Depending on the state, fair housing laws have expanded protected classes under Federal Housing Administration (FHA) to also 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 The Fair Housing Act laws and state-specific laws not only aim to protect their business but make sure their clients are also protected against any discrimination.
A 2022 Fair Housing Trends Report released by the National Fair Housing Alliance said that in 2021, there were 31,216 fair housing complaints and 28,712 filed in 2020. This is the highest number of complaints they’ve seen in 25 years, and it seems to continue to grow. Of those complaints, 82% of them originated in rental transactions.
The federal Fair Housing Act in real estate prohibits discriminatory activities in all aspects of housing, although some are not always the responsibility of the real estate agent. Below are violations against protected classes that are prohibited according to the FHA for landlords, agents, and lenders:
Landlords/Property Owners | Real Estate Agents | Lenders |
|---|---|---|
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|
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However, there are certain exceptions to this law. The FHA 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.
Another exception to FHA regulations is senior housing. FHA prohibits discrimination against familial status or age and senior housing with age requirements of 55 or 62 years of age, and older communities participating in senior housing programs are exempt properties.
Fair Housing Violation Statistics & Enforcement
Although it’s been over 50 years since the initial FHA laws were created, violations still occur and sometimes can be difficult to detect. The National Fair Housing Alliance (NFHA) is the only national organization dedicated to eliminating discrimination in housing. It collects data from its consortium of 220 private, nonprofit, state and local agencies, and individuals from around the nation.
Once all the data is collected from the consortium, the NFHA releases an annual Fair Housing Trends Report documenting discrimination complaint trends. According to the most recent report released in December 2022 with data and fair housing complaints compiled for 2021, the top cases alleging discrimination were based on disability and race. There were 16,758 complaints of discrimination based on disability and 5,922 complaints of discrimination based on race, making them the most common violations to occur.
Fair housing complaint data (Source: National Fair Housing Alliance)
Rental housing transactions received the most fair housing complaints, accounting for 81.7% of all complaints received by fair housing organizations in 2021. This is followed by real estate sales, which accounted for 4.51% of all complaints. 2021 housing data showed a higher demand and lower supply of available housing following the global pandemic.
Some of the rental FHA complaints stemmed from landlords demanding three to five times the monthly rent for tenants to qualify for housing. Additionally, landlords increased their restrictions on housing applications to online systems, which discriminate against those who didn’t have access to technology.
The number of Fair Housing Act complaints by transaction type (Source: National Fair Housing Alliance)
HUD is the primary federal agency responsible for enforcing the Fair Housing Act. It has a Fair Housing and Equal Opportunity (FHEO) office that works to eliminate discrimination by enforcing the housing laws, investigates complaints of discrimination, conducts compliance reviews, and helps to bring legal action against those who violate the law.
There are also many fair housing organizations and advocacy groups like the Fair Housing Justice Center and the NFHA, which help those who have been victims of housing discrimination. These organizations can provide legal assistance, counseling, and education to ensure individuals know their rights under the law.
5 Ways Real Estate Agents Can Comply & Protect Against Violations
It’s crucial when becoming a real estate agent to thoroughly understand and comply with all national and state-specific fair housing laws in real estate. 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 fair housing violations.
1. Know How to Answer Frequently Asked Client Questions
During the process of finding and showing homes to prospective clients, your clients may ask a lot of questions that pertain to their preferred neighborhood characteristics, location, and desired quality of living. However, some of the questions that help your clients narrow down their search may be questions relating to protected characteristics and could potentially cause you to violate fair housing laws.
You need to know how to approach these questions to avoid directly or indirectly causing discrimination in any way. Real estate agents must focus their efforts on the properties themselves, have resources they could direct their clients to, and refrain from providing general assumptions when responding to their clients.
Below are some frequently asked client questions (FAQs) considered fair housing violation examples and proper responses that will help you avoid violating the FHA:
When looking for a home to purchase or rent, 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 would be subjective since it would be based entirely on an agent’s opinion.
Graph of Americans’ view of safety (Source: Bookings)
Given that safety is viewed differently by different individuals, agents should refrain from answering such safety questions with their personal thoughts or by providing neighborhood crime statistics, since this could be an indirect reference to race or another 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 to your clients to visit the area with a friend or family member at different times of the day to observe the neighborhood.
- Clients can speak to those who live in the area or online neighborhood social media groups to get a feel for the neighborhood.
Clients may ask a real estate agent if there are churches, mosques, or synagogues nearby because they are looking to be in close proximity to their own place of worship. However, clients asking this question may also be avoiding living near a specific group of people.
Real estate agents must offer equal services to all prospective buyers and renters regardless of race, religion, color, disability, national origin, sex, or familial status. Helping your clients find a home near their place of worship could be considered steering, which is when real estate agents influence a homebuyer’s choice by suggesting certain areas based on a protected class.
Alternative solutions:
- Direct clients to conduct their own online search for the religious institutions they are looking for. 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 clients can observe the surroundings and make notes if there are places of worship of interest to them.
As a neighborhood expert, real estate agents are commonly asked about the quality of school districts in certain areas. This question seems like a very innocent question coming from a parent or future parent, but this fair housing violation example could lead the agent down a slippery slope of potentially violating the Fair Housing Act.
Graph of school factors important to parents (Source: NCES)
When a prospective client asks about good schools in a specific neighborhood, real estate agents must be careful in their response to avoid steering clients to or from a certain school or school district, and therefore, certain locations.
Alternative solutions:
- Tell clients to do their own research to make sure all their education needs and questions are met.
- Ask your client about their preferred school district location, as most parents will already have an idea of which school they want their child to attend. Performing a housing search for clients based on their desired location criteria is not a violation of fair housing laws.
Real estate agents should always avoid making any assumptions about whether their clients have children, are married, or are planning on expanding 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 checks out the community website or social media boards to look for activities that would be best suited for them.
Clients questioning whether or not their service animal is accepted are usually in a rental property or multi-family unit building. An assistance animal is defined by the U.S. Department of Housing and Urban Development as an animal that works, provides assistance, or performs a task that benefits 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.
Dog in service uniform (Source: Service Dogs for America)
Landlords and property owners may not refuse housing and must name reasonable accommodations for a person with a disability, including allowing services animals. Real estate agents must be aware that although a service animal is accepted, and there is proper documentation, 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 there may be other factors based on the landlord (insurance, financial, etc.).
- Instruct clients to prepare their service animal documentation for the landlord or housing association.
- Know the size, weight, age, and breed of the service animal to provide proper information.
Disability is a protected class under the Fair Housing Act, including physical and mental disabilities. Real estate professionals must make reasonable accommodations for individuals with a disability to ensure equal access to housing. Landlords can do this by making modifications to 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 be aware a landlord cannot always accommodate someone with a disability. If the modifications or accommodations cause an undue financial and administrative burden on the property owner, the request can be denied, according to HUD. 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?” Rather, agents should inquire about any particular needs or preferences your client has for the property.
2. Review Your Advertising & Marketing Materials for Potential Fair Housing Violations
Real estate advertising and marketing are crucial for real estate agents to generate business leads. Forty-seven percent of homebuyers initiate online searches, so marketing activity is important to attract new clients. However, the language used in marketing material must also 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.
Fair housing advertising word and phrase list (Source: Texas Press)
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 opinion 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” |
“One-bedroom apartment, perfect for singles, non-drinkers welcome” | Age, marital status, familial status, and disability: Cannot discriminate against marital status; also, alcoholism is considered a disability | “Cozy one-bedroom apartment with space for full-size bed, dresser, and nightstand” |
“Master bedroom with en suite” | Race or sex: “Master” bedroom can be perceived as racist or sexist | “Primary bedroom with en suite” or “Main suite” |
“Last remodeled in 1990, a handyman’s dream” | Gender: Various genders can be handy, not specific to men | “Fixer-upper,” “Needs TLC,” “Handyperson’s dream” |
Small changes to your marketing language can make sure you are not violating real estate fair housing laws. At the end of the day, 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.
Listing automated marketing example (Source: Market Leader)
Agents who need assistance with marketing their listings can enlist the assistance of real estate marketing companies like Market Leader. Market Leader is one of the top providers of listing marketing automation. All new real estate listings will receive a property website, listing email, social media posts for Facebook and LinkedIn, and ready-to-print flyers and postcards. These materials are created by an expert real estate marketing team, so you don’t have to worry about whether the content violates any fair housing laws.
3. Be Confident With Real Estate Testers
The Fair Housing Testing Program was created by the Department of Justice in 1991. It 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 a real estate agent, it’s important to be confident and professional when interacting with real estate testers 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 protected characteristics that are covered.
- Understand what is allowed regarding advertising, showing, and renting or selling properties.
- Regularly check the 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
Real estate agents who are committed to staying on top of the most up-to-date fair housing laws can take continuing education courses at schools like The CE Shop. Its courses generally are online and self-paced, so you can complete the course on your own time, and it offers courses covering fair housing. These continuing education hours are required for license renewal anyway, so it’s a great way to maximize your time while strengthening your real estate knowledge.
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 the discrimination. You can submit a claim with HUD online, via email, and through physical mail. Make sure to document the incident with as much detail as possible, like date, time, parties involved, actions, etc.
Housing discrimination form (Source: HUD)
Here are some options for who to contact if a violation occurs or if you have fair housing questions:
Agency | Website | Phone | Form |
|---|---|---|---|
U.S. Department of Housing and Urban Development (HUD) | 1-800-669-9777 or 1-800-877-8339 | ||
National Fair Housing Alliance (NFHA) | 202-898-1661 |
5. Promote Equality
Real estate agents 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 not use discriminatory language in their advertising or communications.
One way to avoid any unintentional discrimination throughout your real estate practice is to use standard screening criteria for all applicants, such as credit checks and criminal background checks, and give all your clients the same packet of information.
Bottom Line
It’s important for real estate agents to take fair housing laws seriously and to be proactive in their efforts to prevent discrimination and promote equal housing opportunities. Real estate agents should know these laws, stay informed of any changes or updates, and regularly review their practices to ensure compliance.
By following these steps, real estate agents can help protect themselves against fair housing violations and ensure they provide equal and fair housing opportunities to all clients.
