What are the specific discriminatory practices prohibited by the Fair Housing Act, and how do they apply to transactions and interactions?
Prohibited practices include refusal to sell, rent, or facilitate transactions based on protected class; discriminatory terms, conditions, or pricing in sales or rentals; refusal to provide brokerage services; discriminatory advertising; discrimination in financing or credit terms; denial or different treatment of reasonable accommodation requests; and retaliation against persons who assert fair housing rights. Violations can be intentional discrimination or disparate impact discrimination that has an unequal effect even without intent to discriminate.
Key Takeaways
- Prohibited practices include refusal to sell, rent, or facilitate transactions based on protected class.
- Discriminatory terms, conditions, or pricing in sales or rentals.
- Prohibited discriminatory practices under the Fair Housing Act include a broad range of housing-related activities and transactions.
- Rules vary by state; always learn your specific state's requirements.
Fair Housing & Ethics on the Real Estate Exam
Real estate agents must actively avoid prohibited practices in all client interactions, and also recognize and prevent these practices by other market participants. Agents cannot claim ignorance of fair housing law as a defense to violations, and are expected to know and comply with federal and state law requirements. Violations result in civil liability to private parties, HUD enforcement actions, and state licensing discipline. Agents who can identify prohibited practices and explain them to clients help prevent violations and demonstrate professional competence.
Understanding Fair Housing & Ethics: Key Concepts
Prohibited discriminatory practices under the Fair Housing Act include a broad range of housing-related activities and transactions. The most direct prohibition is refusal to sell, rent, or negotiate for housing, or representation that property is not available, based on a protected class characteristic. This applies whether the refusal is explicit (outright rejection) or implicit (steering, selective showing, or delaying responses). Discriminatory terms and conditions in sales or rentals include requiring higher down payments, charging higher prices or rent, imposing different lease terms, or restricting use of amenities based on protected class. For example, charging different security deposits or rent amounts based on race, or restricting access to common areas based on familial status, violates this prohibition.
Discriminatory advertising includes advertising that discourages or encourages applications based on protected class characteristics, use of coded language that signals exclusion (such as advertising only in publications targeting one race, or using language like "quiet building, no children"), or selective placement of advertising. However, legitimate property-related requirements (pet policy, smoking policy, disability accommodation limitations) are not discriminatory advertising. Discrimination in provision of brokerage services includes refusing to work with buyers or sellers based on protected class, providing unequal service quality, or refusing to show properties in certain neighborhoods. Discriminatory practices in financing include referring applicants to specific lenders based on protected class, requiring different documentation, or steering toward different loan products based on race.
Reasonable accommodation and modification discrimination involves refusing to permit people with disabilities to make necessary modifications to rental units (such as grab bars, ramps, or pets for emotional support) or failing to make reasonable accommodations in rules and policies. Retaliation is prohibited and includes adverse actions against persons who oppose discriminatory practices, file complaints, or participate in investigations. Finally, the Fair Housing Act also covers discriminatory behavior related to dwellings, including harassment and threats against persons based on protected class. Agents must understand that these practices are illegal regardless of motive or outcome, though intentional discrimination carries more severe penalties. Some practices that appear neutral in intent may violate the disparate impact standard if they have the effect of discriminating even without discriminatory motive.
Fair Housing & Ethics Rules by State
Each state has its own rules when it comes to fair housing & ethics. Here are a few examples of how requirements differ:
California
California prohibits all federal-protected-class discrimination plus discrimination based on source of income, gender identity, sexual orientation, marital status, and age. California's Unruh Act prohibits discrimination based on any protected class in any business, including real estate. California law also covers retaliation and harassment extensively. DFEH can pursue enforcement without private party complaints and has authority to seek damages, civil penalties, and injunctive relief. California agents must be particularly aware of source of income discrimination (rejecting tenants with housing vouchers) and gender identity considerations (correct names and pronouns).
Texas
Texas enforces federal fair housing law and the seven federal protected classes. Major Texas cities (Austin, Dallas, Houston, San Antonio) have ordinances prohibiting sexual orientation and gender identity discrimination. Texas agents must comply with federal law as a baseline and local ordinances in their specific cities. Discrimination based on race, color, religion, national origin, sex, familial status, and disability violates federal and Texas law. HUD and the Texas Workforce Commission enforce fair housing in Texas.
Florida
Florida protects against the seven federal protected classes plus age and marital status. Florida's Fair Housing Act applies to real estate transactions, housing discrimination, and related services. Florida Commission on Human Relations enforces both federal and state protected class discrimination. Real estate agents in Florida must be aware of age discrimination (cannot refuse to rent to seniors or young adults based on age) and marital status discrimination (cannot discriminate against single, divorced, or widowed persons). Florida law also protects against sexual orientation discrimination in some contexts.
Remember that both explicit refusal and steering constitute refusal to sell or rent. Discriminatory advertising includes coded language, not just explicit exclusion. Reasonable accommodation requirements mean landlords must make exceptions to policies for people with disabilities. Retaliation is illegal against anyone opposing discrimination or filing complaints. Agents cannot claim they were just following a client's preferences if those preferences are discriminatory.
Rules vary across all 50 states
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