In its eighth action since September, the U.S. Department of Housing and Urban Development today announced it has charged Lillie Arnett, a Realtor and real estate broker, and her son, Teddy Arnett, with violating the Fair Housing Act for allegedly refusing to sell a home to Marvin and Stephanie Benton, an African American couple, based on their race and color.

On Jan. 24, 2004, the Bentons looked at a house Teddy Arnett was selling in Scott, Ark. Later that afternoon, the Bentons, through their agent, Wayne Smith, made an offer to purchase the property for $139,000, the full purchase price. The offer was contingent upon Arnett agreeing to pay up to 6 percent of the closing and prepaid fees. Additionally, the buyer asked Arnett to pay up to 3 percent of the down payment requirement through a buyer-assistance program.

Later that day, Lillie Arnett, serving as her son’s agent, allegedly advised Smith that the offer was not acceptable. While relaying the rejection, Ms. Arnett allegedly asked if Smith’s clients were African American. Smith declined to answer the question but replied that the inquiry was a violation of the Fair Housing Act. At 7:30 p.m. the same day, Smith submitted another offer on behalf of the Bentons.

The second offer waived all requests for additional closing costs, down-payment assistance and prepaid fees, and offered $135,900 for the home.

On Jan. 26, 2004, Arnett’s next-door neighbors, a white couple, allegedly offered to purchase the house for $138,000, contingent on their ability to obtain financing. Mr. Arnett allegedly accepted their offer and Ms. Arnett contacted Smith to advise him that another offer had been accepted. During the conversation Smith advised her that his clients were making a third offer of $139,900. Arnett allegedly rejected that offer as well, according to HUD’s investigation.

Arnett’s neighbors were not successful in obtaining the financing so on May 19, 2004, Arnett sold the house to a white male for $130,000. “Our investigation shows that if not for their skin color, the Benton’s would now be residing at 13915 Old River Drive,” said Carolyn Peoples, HUD assistant secretary for Fair Housing and Equal Opportunity. “The Fair Housing Act plainly states it is illegal to refuse a bonafide offer or refuse to negotiate simply based on someone’s race or the color of their skin and HUD will not hesitate to enforce the Act.”

A hearing on the charges is slated for Jan. 25, 2005. Housing discrimination charges carry a maximum civil penalty of $11,000 for a first offense in addition to actual damages, including emotional distress damages, for the complainant, injunctive or other equitable relief, and attorney fees.


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