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Nov 04, 2022 PropStream

How to Follow Fair Housing Guidelines as a Real Estate Professional

Important: PropStream does not offer legal advice. This guide is meant for informational purposes only. If you have questions about whether your business practices follow Fair Housing guidelines, we recommend consulting with a legal professional.

To build a successful real estate business, you need a strong marketing strategy, a growing network, and a robust real estate data tool. But there’s one more critical ingredient that’s easy to overlook—following the Fair Housing Act.

Adhering to Fair Housing guidelines can help protect your business and maintain an outstanding reputation. Let’s take a deeper look at what that entails.

What Is the Fair Housing Act?

The federal Fair Housing Act went into effect in 1958 to protect certain classes of people from discrimination while buying or renting a home, seeking housing assistance, getting a mortgage, and more. Fair Housing guidelines apply to nearly all housing types in the U.S., including private, public, and federally assisted housing.

Protected classes under the Fair Housing Act include:

  • Race
  • Color
  • Religion
  • National origin
  • Disability
  • Sex (including sexual orientation and gender identity)
  • Familial status

Familial status protects children under 18, pregnant women, or anyone adopting or securing custody of a child.

What Is a Violation of the Fair Housing Act?

Under the federal Fair Housing Act, it’s illegal to do any of the following based on a person’s protected class:

  • Refuse to rent, sell, or negotiate for housing
  • Set different terms for housing
  • Falsely tell someone that housing is unavailable
  • Harass someone (including sexual harassment)
  • Change the price of housing

There are many other Fair Housing violations to steer clear of depending on your line of work. Here’s how the Fair Housing Act applies to various real estate professionals.

Fair Housing Guidelines for a Real Estate Investor

what is the fair housing act

If you’re a real estate investor, your screening process for tenants must follow Fair Housing guidelines. That means you can’t refuse to rent your property or change the conditions or requirements for tenancy based on someone’s protected characteristics.

Watch your marketing materials, too. Screen them to make sure the language doesn’t imply any preference for or against a particular group of people. It may help to focus solely on the property details instead of what you’re looking for in a tenant.

It’s also illegal to discriminate against a person’s protected class if you have chosen to rent to them by:

  • Delaying or refusing to provide maintenance or repairs
  • Evicting a tenant or their guest
  • Imposing a different rent price or associated fees
  • Harassing a tenant
  • Barring someone from privileges, services, or access to facilities
  • Offering someone different housing services or only making specific units available to them to rent
  • Publishing any notice or statement for tenants that indicates discrimination

Fair Housing Guidelines for a Real Estate Agent

As a real estate agent, it’s essential to understand what actions violate the Fair Housing Act, such as:

  • Refusing to negotiate for housing on someone’s behalf
  • Discouraging someone from purchasing or renting a property
  • Steering a homebuyer toward a particular neighborhood, building, or section of a building because of their protected class
  • Encouraging someone to sell their home because people with a protected characteristic have moved into the neighborhood
  • Advertising a home in a way that discourages people of a protected class from buying it

For example, let’s say a family asks an agent to show them houses in a particular neighborhood. If the agent encourages them to look in a different neighborhood instead because more people of their race live there, that would be a Fair Housing violation.

It’s also illegal to refuse to let someone join a real estate brokerage because of their protected class or deny them access to any multiple listing service. If you feel this has happened to you, learn more about filing a complaint here.

Fair Housing Guidelines for a Real Estate Broker

Real estate brokers should regularly ensure their client relationship processes and marketing materials don’t discriminate—even unintentionally. Your brokerage must provide equal service to all clients, regardless of their race, religion, disability, gender, sexual orientation, familial status, or national origin.

See this printable guide for words that are generally safe and words to avoid in your marketing materials and agent-to-client communication. You can share it with your team as a helpful reminder.

You should also provide Fair Housing training for every agent in your brokerage. There are many training courses available, depending on your state.

Fair Housing Guidelines for a Mortgage Loan Officer

Mortgage lenders should examine every stage of their loan process for discrimination. Fair Housing violations for lenders include performing any of these actions based on any of the protected classes:

  • Refusing to provide a mortgage loan
  • Denying other types of financial assistance for housing
  • Refusing to purchase a loan
  • Changing the rates, points, or fees on someone’s loan
  • Refusing to provide information on your loan products
  • Discriminating during the property appraisal process
  • Denying someone a loan based on how they respond to harassment

Fair lending dictates that mortgage loan officers can’t refuse to take into account someone’s income because they’re pregnant or because it’s disability-related. They also can’t target a minority community when investigating loan fraud.

Any loan products you provide—including mortgages, refinancing, home improvement loans, and home equity loans or lines of credit—are also subject to Fair Housing guidelines.

Fair Housing Guidelines for a Property Manager

Many of the violations listed for real estate investors apply to property managers, too. As a property manager, it’s important that you meticulously follow Fair Housing guidelines in your business and the landlord you represent. This includes avoiding discrimination in how you screen tenants, set contract terms, determine rental rates, and respond to tenant complaints or requests for repairs and maintenance.

For example, avoid statements that could come across as discriminatory, such as “This house would be a perfect fit for couples with no kids.” Steer clear of questions about protected classes as well. Instead, use the same list of questions for every tenant.

Also, if you have to deny a tenant, clearly state the reason to avoid any appearance of discrimination.

Fair Housing Guidelines for a Property Appraiser

federal fair housing act

When you hear the term “Fair Housing guidelines,” you may immediately think of landlords, property managers, and real estate agents. But as a property appraiser, you directly impact the loan approval process and, as a result, people’s ability to obtain housing.

After all, biased home appraisals can make racial inequities in the housing market worse, according to the Consumer Financial Protection Bureau. So it’s important to look closely at your valuation processes and reports to eliminate any potential discrimination.

For example, avoid listing racial or ethnic percentages in neighborhood descriptions or comparing the data to national averages. Also, beware of referring to what languages are spoken in the neighborhood or the area’s religious makeup.

Fair Housing Guidelines for a Real Estate Contractor

Under Fair Housing Design guidelines, real estate contractors must ensure the housing they build provides a “safe harbor” for all protected classes. This includes designing facilities to be accessible to people with disabilities.

For example, building entrances, unit entrances, doors, kitchens, bathrooms, and common-use areas must be accessible to people who require wheelchairs. People in wheelchairs should also be able to reach light switches, outlets, and temperature controls. Additionally, you’ll find it beneficial to reinforce the bathroom walls so that grab bars can be installed later if needed.

Remember that accessibility guidelines can vary by state, county, and city, so research your area’s regulations thoroughly.

Learn More About Real Estate With Our PropStream Academy

Now that you know more about Fair Housing Guidelines and how to ensure you follow them in your specific niche, why not continue your education?

Our free PropStream Academy offers comprehensive courses on various real estate topics, including how to find off-market properties, find leads as an agent, and use PropStream’s robust real estate software.

These courses are self-paced, so you can grow your successful real estate business on your own schedule.

Try a PropStream Academy course today!

Published by PropStream November 4, 2022