How Does the Fair Housing Act Protect Buyers and Sellers?
There are few things as stressful as finding a new place to live. When you decide to hunt for a new apartment, buy your first home, or sell and move, how do you know if you’ll be treated fairly? Recognizing housing’s importance in most people’s lives, the government has passed laws to ensure fairness in the housing market.
According to Meris Bergquist, Executive Director of the nonprofit Massachusetts Fair Housing Center, “Before the Fair Housing Act (FHA) became law, landlords and home sellers could openly — and without consequence — refuse to rent or sell their dwellings to qualified applicants because of their race, color, national origin, religion, sex, familial status, and disability.”
Knowledge is power. When it comes to protecting yourself from discrimination or abuse in the housing market, you’ll want to learn about the Fair Housing Act.
What is the Fair Housing Act?
The Civil Rights Act of 1968 contains two sections, Titles VIII and IX, meant to address discrimination in housing. This is what’s known as the Fair Housing Act.
Who’s protected by the Fair Housing Act?
The act prohibits discrimination on the basis of:
- Race
- Color
- National origin
- Religion
- Sex
- Familial status
- Disability
This means that landlords, sellers, real estate agents, mortgage brokers or loan officers, and other roles involved in real estate transactions cannot discriminate against you based on any of these characteristics.
Not every listed characteristic had protection immediately; sex wasn’t added until 1974, and some communities still lack inclusion. The LGBT community is still fighting to expand the Act to include sexual orientation. Twenty-two states, including Vermont, have passed their own anti-discrimination laws for sexual orientation.
What does the act outlaw?
The act’s provisions attempt to address every aspect of housing where discrimination could exist, from renting to buying or selling a home. Its goal is to ensure equal opportunities for everyone in the housing market.
Mortgage-related discrimination
Regardless of your race, color, national origin, religion, sex, disability, or familial status, lenders must treat you the same. For example, lenders cannot refuse to make a loan or provide financial assistance for housing to a person of color that they would offer to a white person. Lenders also have to provide information around available loans to all borrowers to ensure fairness. Even if the bank discloses all their available mortgage products, a loan officer could still push borrowers toward a different product on the basis of race or other protected factors, which violates the Act.
Appraisal-related discrimination
If your home appraises for much less than expected, you could lose significant money in a sale. The Act bans discrimination in appraising, which happens when appraisers, often inadvertently, assign lower values to Black-owned homes than to white-owned homes. This type of discrimination slows the growth of wealth in minority communities, preventing them from building equity and passing on that wealth to future generations.
Sales discrimination
The Act also seeks to protect people from being discriminated against in the sales market. Sellers cannot refuse to sell a house to someone based on the characteristics outlined in the FHA. For example, if you’re making an offer on a house, the seller can’t refuse to negotiate the sale based on your race. They also can’t impose a different price or set different terms.
These protections also extend to advertising and marketing. The home’s listing can’t have any indication of “preference, limitation, or discrimination” in its wording. Agents have to be careful with a listing’s wording, which can’t discourage certain groups of people from purchasing.
For the industry at large
Harassment is illegal for everyone involved in the housing market, too! Agents cannot refuse to work with Black homebuyers. An agent who has strong religious beliefs cannot decline to show a house to someone of a different religion. Brokerage organizations and multiple listing services (MLSs) are also prohibited from denying access to or membership based on race.
Are there exceptions?
Yes. For sale by owner, or FSBO sales, do not have to comply with the Fair Housing Act’s rules. Housing operated by religious organizations is exempt, as are private clubs that limit occupancy.
How is the act enforced?
The Department of Housing and Urban Development (HUD) investigates discrimination claims and acts if it finds that the law has been violated. HUD also hires people to pose as renters or buyers to test whether any laws are being broken. HUD may also proactively pull data on home sales, mortgages, and lending practices in some neighborhoods to examine them for patterns that indicate discrimination. But you should also be aware of how you can report violations if you suspect that you’ve been the subject of housing discrimination.
What should you do if you think someone broke the law?
First, figure out what part of the law was broken and how. Document your memories of the event — if an agent said something to you in person — or keep copies of any emails or forms that support your belief that the law was broken. Next, do some digging into any local or state fair housing watchdogs. You should report the violation to HUD, but occasionally when state or local watchdogs get enough information about widespread discrimination, they can also take action. Lastly, you should file a complaint through HUD. HUD investigates complaints and helps enforce the law.
The Fair Housing Act and you
No matter your race, color, national origin, religion, sex, disability, or familial status — the Fair Housing Act protects you from receiving unfair treatment when you’re buying, renting, or selling a home. Knowing your rights before you start home or apartment shopping helps you relax and enjoy the experience.
The Fair Housing Act also covers renters. Read more about how the FHA protects buyers, sellers, and renters in the full article by Dana Landon at https://www.homelight.com/blog/buyer-what-is-the-fair-housing-act/.
