Discrimination in housing is as real today as it was in the 1960s and 1970s, and it can be a serious issue for real estate agents if they’re 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 — 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 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 interactions 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 everyone of the importance of protecting people against discrimination in real estate. Here’s some background on the fair housing rules we must always 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’s 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” to signify a word or phrase that should never be used, may be problematic or is 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. The bottom line is — 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 buyers or sellers. It isn’t easy to distinguish them from actual clients.
In my second year of selling real estate, I’m 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’m 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” protected categories when it comes to the sale or rental of a property. The protected categories include: race, color, religion, sex, disability or handicap, familial status and national origin.
One area that’s not an “officially” protected category is sexual orientation. However, HUD does offer another option for those in the LGBTQ (lesbian, gay, bisexual, transgender and questioning and/or queer) community. Established back in 2012, HUD’s Equal Access Rule says that individuals will have access to HUD programs “without regard to actual or perceived sexual orientation, gender identity, or marital status.”
In addition, “housing providers that receive funding from HUD or have HUD-insured mortgage loans are subject to the regulations within the Equal Access Rule.”
If an LGBTQ person becomes a victim of any sort of discrimination by a “HUD-funded or FHA-insured housing provider or lender,” they should report it right away. This can be done by submitting a complaint to HUD or reaching out to a local Fair Housing Equal Opportunity (FHEO) office.
Housing discrimination is a serious issue in our country. As real estate professionals, we must guard against it. We should always be open to showing properties to anyone who is financially qualified. The Code of Ethics and Standards of Practice of the NAR clearly states that Realtors should never willfully discriminate against anyone or violate state and federal fair housing laws in their real estate practice.
So, take the time to review those laws and the Code of Ethics on the latest in nondiscriminatory practices in real estate. Everyone — no matter who they are or where they come from — deserves a roof over their head.
For more information about fair housing, click here.
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.”