Buying a home is more than just a transaction. It’s a major life event. Making that purchase is tied to people’s dreams, goals, and future plans.
That’s why there are laws put in place that safeguard people from discrimination in the housing market. Since buying or selling a home carries many implications for the people involved, only regulations can keep it fair.
Which laws are connected to the Fair Housing principles, and what do they mean for the parties involved?
In the following paragraphs, we’ll go over the details of the Fair Housing Act, while also describing other important laws that have relevance to the housing issues.
The Fair Housing Act
This legislation came into being a week after Martin Luther King Jr’s assassination. The main principle of this law is to end any discrimination involved in the housing market. In other words, every single person has the right to rent, purchase, or receive a mortgage on a home regardless of their class status. Altogether, there are seven classes of people protected under the Fair Housing Act:
- Familial status
- National origin
Sometimes the familial status class may raise some confusion, though. You have to meet at least one of the following criteria in order to get protection under this class:
- Pregnant women
- Parents with one or more children (under 18) that live with them
- Legal guardians with one or more children (under 18) that live with them
- People in the middle of receiving legal custody of a child under the age of 18
- Designees of the parent or legal guardian that has a child under the age of 18
What are the practical examples of discrimination?
You may be wondering how discriminatory practices translate into real life. Take a look at the following list of possible ways of discrimination when someone wants to rent or purchase a home:
- Advertising your property in a way that prefers people with a certain background or excludes any of the protected classes
This is an illegal act of manipulation. Homeowners get pressed into believing that minorities move into their formerly homogeneous neighborhood. In turn, the owners could start to believe that the value of their home faces a decline.
- Denial of housing
- Lying about the availability
- Making discriminatory statements
- Making housing unavailable
- Quoting different conditions or terms
- Providing unequal amenities
- Refusal to engage in renting, selling, or negotiating activities
As you can see, there are many possible discriminatory practices. The same goes for mortgages:
- Appraising property in a discriminatory way
- Denial of releasing loan information
- Quoting different loan purchase requirements
- Refusal to offer or purchase a mortgage loan
- Setting different conditions like extra fees or higher interest rates
Are there any exemptions?
Yes, there are cases when these groups may be exempt from following the Fair Housing Act:
- Members-only organizations and private clubs
- Owner-occupied homes that have no more than four units
- Single-family homes rented or sold without any use of brokerage services
How is it reinforced?
People might feel someone violated their housing rights. They can file a discrimination claim with the Department of Housing and Urban Development (HUD). The latter will investigate the matter. During the investigation, the department will decide whether there’s a need for any legal action.
HUD hires people that act as potential renters or buyers. They work to uncover any discriminatory actions on behalf of the sellers or landlords. The analysis covers everything from advertising to phone calls.
How to steer clear of any violations?
Tenant screening needs to be consistent. The qualifying standards have to be the same for every single tenant. In practice, you need to ask for the same documents, information, and fees. Otherwise, you raise the risk of violating any rules.
Following the Fair Housing Act doesn’t mean you can’t deny any tenants. You still can! However, there has to be a legal basis for doing so. For example, you run a credit check and find out that they have poor credit. Or there might be other strong indicators proving their inability to pay rent on a regular basis. These decisions can’t be made on a hunch. You always require proof.
Be kind, inclusive, and respectful in every situation. The same goes for writing ads or posting offers on social media. HUD people not only evaluate what you say in person, but they analyze your online communication too.
The Fair Housing Act isn’t the only law that deals with housing discrimination.
Equal Credit Opportunity Act
When someone applies for credit, the following aspects can’t play any role in the process:
- Being subject to any public assistance program
- Marital status
- National origin
Americans with Disabilities Act
Title III of this law prohibits any discrimination against persons with disabilities. That includes places of public accommodations and commercial facilities.
There are laws both on the local and state level that stop discrimination by relying on more classes compared to the federal law.
Real life examples
You may still be wondering, what do these discriminatory situations exactly look like? Take a look at some of the following examples from real life:
- Property manager asks a higher deposit from a family with children
- Realtor manipulates a buyer into avoiding some neighborhoods
- Mortgage broker demands documentation from an immigrant family that they normally wouldn’t ask
- Landlord avoids renting a unit to a person of a different religion by claiming the unit isn’t vacant anymore
We listed some examples that fall under the Fair Housing Act domain. There’s a wide variety of possible discriminatory conflicts. That’s why it’s always important to analyze your behavior and communication. Treat all potential tenants with dignity and respect.