Chapter 25 - Federal Fair Housing Laws
At the completion of this chapter, students will be able to do the following:
1) List at least four protected classes under the Fair Housing Act.
2) Explain the difference between blockbusting and steering.
25.1 Federal Fair Housing Laws
The laws surrounding discrimination and fair housing have a long history in the United States, dating back to the post-Civil War years when Congress recognized the importance of the right for all citizens to have access to real and personal property. Over the years and especially during the years of the civil rights movement, the government worked to expand these laws to include groups of people who were not protected under the original law.
In this lesson, we will review the history of the fair housing laws, discuss how the laws are enforced, and also talk about how the laws will play into your activities as a real estate agent. As an agent, it is critical to understand all the classes that are protected under The Act and make sure you are not engaging in activities that could be construed as a violation of the Act.
The first law we will review is The Civil Rights Act of 1866.
The first law to be passed by Congress was The Civil Rights Act of 1866 and it is still on the law books today. After the Civil War, the 13th amendment was passed abolishing slavery; however, Congress was then tasked with enacting a law that protected the newly freed slaves. In order to do this, the Congress passed the Civil Rights Act of 1866 which was comprised of three main ideas.
The first part of the act declared all persons born in the United States to be US citizens.
The second part of the law stated that as a citizen, one is granted a certain set of rights. The set of rights includes the right to sue, be party to a contract, give evidence, purchase, sell, lease, hold and convey personal and real property.
The third part of the act made it illegal to deny people based on their race.
The Act explicitly banned discrimination when it came to housing including the use, sale, lease or transfer of both real and personal property.
An important part to remember is that this act only made it illegal to discriminate based on race; it would take decades for new laws to be adopted that broadened the groups of protected classes, that we will review later in this lessons.
One of the unique features of this Act is that there are absolutely no expectations when it comes to discrimination based on race or color when it involves the purchase, sale, lease or conveyance of real property including real estate and personal property. This is an important feature of the law as you will learn later in the chapter that there can be some exceptions under the Fair Housing Act, but not when it comes to discrimination based on race.
Another important fact to note about the 1866 Act is that if a claim is made, it has to go directly to the Federal Courts.
We will review a landmark Supreme Court case which confirmed the rights and protections that Congress had created under the Civil Rights Acts of 1866. It is also an important case to be aware of as it is considered one of the first housing discrimination cases and the decision still holds today.
This important court case was Jones versus Alfred H. Mayer Company and the decision was made in 1968. Alfred Mayer Company was developing homes in a suburb of St. Louis and the defendant Jones was directly told he could not purchase a home there because it was company policy not to sell to black people. In this day and age this would be obvious discrimination; however, at the time of the lawsuit, it had not been confirmed in the courts that the act applied to the private sector. The main issue in this case was deciding whether congress had the authority to prohibit discrimination in the private sector. In the end, the court concluded the Act did apply to the private sector and the court sided in favor of Jones. This case is significant because it reaffirmed the law's goal or prohibiting discrimination based on race by both the private sector and the government. In addition, the Act does not allow for any exceptions when it comes to race discrimination.
Now, we will spend some time reviewing the Fair Housing Act (FHA) and the implications it has for the real estate industry. The FHA is a group of laws that broaden the original group of people that cannot be discriminated against, when it comes to housing. The laws that make up the entire act are the Civil Rights Act of 1968, The Fair Housing Amendments Act of 1974, the Fair Housing Amendments act of 1988, and Housing for Older Persons Act (HOPA). We will review those various laws later in the lesson in further detail.
First, let's review the different actions that are illegal under the Fair Housing Act.
1.Under the act, it is illegal to refuse to rent, sell, or negotiate with any person.
2.One cannot change the terms or conditions for different individual as a tool to discriminate.
3.It is also illegal to state or advertise that the property has restrictions.
4.It is also against the law to tell an interested prospect that a property is not for sale or rent when in fact it is available.
5.Blockbusting is also illegal under the act. Blockbusting occurs when sellers are convinced to sell their homes after having been told that members of a protected class are moving into the neighborhood, and therefore their home value will be impacted.
6.Redlining is covered extensively in the chapter about fair lending practices; however, in brief, it is also illegal to deny a loan or offer different terms.
7.The act also prohibits one from denying a person entry into a multiple listing service.
There are three major activities prohibited under the Act that you as a real estate agent should be well versed in. These are blockbusting, steering and redlining.
Blockbusting is the practice of encouraging a person to sell their home based on the fear their home will start losing value as a particular group, generally of a different race, national origin, or religion people, start moving into the area. Blockbusting is a highly important concept for the real estate agents as they tend to gain more listings (to sell) when it is occurring.
It is critical as a real estate agent that you do not involve yourself in any sort of blockbusting efforts. If in the course of your career, you witness a colleague attempting to block bust you should report it to your supervising broker immediately for further action.
Steering is the practice of guiding a person towards, or away from, a particular neighborhood. Steering can be a subtle act such as saying “this is a nice neighborhood”. Steering can also work the other way around and as an agent, you should know this is also prohibited. For example, if a buyer comes to you and states “I only want to be shown homes in white neighborhoods” you should not agree to this and should not work with this client.
Redlining is when lenders predetermine certain areas that they will not lend to based on the makeup of the people in that area.
It is important for real estate agents to be aware that these types of activities are illegal. In your career, you may find yourself sitting at a listing appointment with a prospective seller. If the seller suggests to you that he or she will only be willing to sell their property to a particular race, you must be prepared to step away from that particular piece of business. Getting mixed up in a discriminatory transaction is not worth any amount of commission. Your brokerage should have a formal policy in place that you can review, to help guide you through these particular situations.
Another example where you may find yourself in a difficult situation is when you are presenting an offer to a client, and they start asking you about the demographics of the buyer. It is, of course, your duty to explain to your client that you cannot share that information and a decision should be made based on the contract terms being presented by the other party.
It is also important to understand the type of properties and situations that are covered under the act. We will briefly review these now.
While we do not believe you should allow discrimination in any of your transactions, for purposes of the exam you should be aware of which specific properties the Fair Housing Act applies to:
It applies to all Single Family homes if offered by a real estate broker. This means that the act always applies to you as a real estate agent even if the type of property would have been exempt in your absence, like the following property types:
- Single family homes, if the owner owns more than three properties
- Dwelling with five or more units
- All dwellings that are the property of the federal government
- All properties that are financed via a loan insurance or through the government
- Properties that are purchased from a state receiving federal assistance for slum clearance.
Now that you have an understanding of the types of activities that are illegal under the Act and the properties it applies to, let’s review the agency in charge of administering many aspects of the law.
The agency in charge of administering and enforcing the Act is the US Department of Housing and Urban Development also known as HUD. HUD has federal jurisdiction to enforce the Act, and it is the agency that people can go to and file a claim if they feel they have been discriminated against.
Let's take a moment to review the guidelines that HUD has in place to prevent housing discrimination.
HUD prohibits certain words to be used in advertising that are discriminatory.
It prohibits the use of code words, or catch phrases that can imply an exclusive neighborhood such as “exclusive”.
HUD also prohibits the obvious discrimination in advertising such as “not a suitable for handicapped”. As a rule of thumb, you do not want to reference any one of the protected classes including race, handicap, national origin, religion, sex, gender, familial status, or age in your advertising and/or communications.
HUD also prohibits using certain media, or failure to use certain media, as a means of discrimination. In other words, one cannot advertise in publications that are only read by a certain ethnic or religious group for the purpose of only attracting those groups.
HUD also distributes the Equal Housing Opportunity Poster that must be displayed in the offices of Real Estate Brokers and housing offices. The poster is a simple reminder that it is against the law to discriminate in real estate transactions on the basis of race, color, religion, sex handicap, national origin and family status. The poster also has the contact information of HUD for people to contact if they feel they have been discriminated against.
The poster is confirming that the business does not practice discrimination in its transactions. Not having the poster displayed in an office is a serious offense and can be considered discrimination.
You may also notice the Equal Housing Opportunity symbol on the poster. This symbol is not only found on the poster but as an agent, it should be on every single one of your advertisements!
As we mentioned earlier in the chapter, the Fair Housing Act is made up of various laws and amendments to that law. Over time the government saw the need to expand the group of protected classes. As discussed in the beginning of the chapter The Civil Rights of 1866 only made it illegal to discriminate on the basis of race. Here we will review each of the laws and the groups that those laws sought to protect.
The first act to be passed by Congress, after the Civil Rights of 1866, was the Civil Rights Act of 1968. There were two previous attempts to pass similar legislation but those failed.
The Civil Right Act of 1968 often referred to as Title VIII is considered one of the most progressive laws passed in the fight for civil rights. It made it illegal to participate in any of the activities we reviewed earlier in the chapter such as refusing to rent or sell a property on the basis of race, color, religion, or national origin. The act clearly defined what housing discrimination was and allowed for federal enforcement of the law.
In 1974 Congress passed an amendment to the act of 1968 called The Fair Housing Amendments Act of 1974 to broaden the groups of protected classes to include sex. The intent of the bill was to help protect women as at the time there were many people including landlords, sellers and real estate agents who believed women were not in a position to own property and the 1974 goal was enacted to protect women against such stereotypes.
So to summarize after the Amendment of 1974 the new group of protected classes are race, color, religion, national origin and sex.
In September of 1988, Congress passed another amendment to the act to expand the group of protected classes to include people with disabilities and families with children. This act is referred to as The Fair Housing Act Amendments of 1988. The expansion offered protection to people with disabilities and it had a major impact on the requirements for landlords to accommodate residents with disabilities. Landlords could no longer refuse housing to people because they required modifications such as a widening of a doorway. The modifications are often at the tenants' expense but the request cannot be denied. In addition, landlords can be forced to change policies to accommodate people with disabilities. For example, if there is a no pet policy in a building a landlord cannot deny housing to someone with a disability if they are required to have a service dog.
As a real estate agent, it is important to be aware of these regulations so that your clients with disabilities know their rights when looking for housing.
The Fair Housing Act was amended again to include the Housing for Older Persons Act (HOPA). HOPA allows for certain housing to be exclusively for older people defined as 55 years old and up. HOPA was necessary because if it was not put in place, housing intended for older people could not deny families with children as they are protected under the act.
The housing must meet certain requirements in order to be covered by the Act, at a minimum, where 80% of the units must be occupied by a person 55 or older.
The other requirements are that the facility must take steps to show that they actively have procedures in place to track and confirm they are in compliance with the occupancy requirement in place by HUD. HUD has policies in place to help audit these numbers to ensure the housing does in fact qualify.
It is critical as an agent that you understand each of the protected classes under the Fair Housing Act.
To review the act makes it illegal to discriminate in housing matters when it comes to race, color, national origin, religion, sex, disability, and family status.
If you find yourself in a position where a client feels they have been discriminated against, you are obligated to let them know about their right to file a claim with HUD.
Under the Civil Rights Act of 1866, there are absolutely no exceptions to discrimination against someone based on race. However, there are three important exceptions to the Fair Housing Act that you should be familiar with as an agent.
Important note: As a real estate agent, you are never exempt from the Fair Housing Act!!
One of the first exceptions is referred to as “Mrs. Murphy” exemption and it really was designed for someone who lives in a home that was converted into individual apartments. The exemption is if the dwelling has 4 or fewer units and the owner lives in one of the units, then they are exempt from the Fair Housing Act. It is important to note that this does not mean the landlord can place a discriminatory advertisement. For example, a “for rent” sign cannot be put up with any indication that a particular race or religious should not apply for the rental.
Another important note for real estate agents: Just because Mrs. Murphy is exempt from the FHA act that does not mean you are if you represent her in the rental transaction!
The second exemption is for private clubs. If a club or association restricts its membership, it can also limit the housing that it provides to its members. The important part of this exemption is that it only applies as long as the private club is not offering housing to the general public.
For example, let's say a golf club is a private one but has housing available for sale on and around the golf club to the public, this exemption would not apply.
Another exemption is for single family housing. If a person rents or sells their single family house they are exempt from the act. There are some conditions to this exemption including the fact that one cannot own more than 3 units at one time. In addition, only one house can be sold every two years, the owner cannot use discriminatory advertising, and they cannot enlist the help of a broker.
As an agent, if you go on a listing appointment and a seller indicates he wants to sell his or her single-family home, but only to a white person you should not agree to take the listing. In this section of the chapter, we will review what a person should do if they feel a violation has been made under the fair housing act. Discrimination can be a traumatic event for a client and you should make sure your client knows there is a process in place through HUD to protect their rights against discrimination.
Anyone can make a claim at no cost through the Housing and Urban Development program (HUD). A claim can be filed via the phone, mail or by submitting it through the online portal.
Once a claim has been filed, the claimant will be contacted via telephone by an intake specialist, to collect additional information to determine if HUD has the authority to address the claim.
If the claim is accepted by HUD, the claimant will receive a formal written complaint to sign and send back to HUD. Within ten days of receiving the signed form back, HUD will notify the person or entity that a complaint has been made against them. The person who has been accused of discrimination then has ten days to respond to HUD.
As part of the claims process, HUD will try to bring the parties together in order to come up with a resolution. If an agreement can be reached, the parties will sign an agreement. If the agreement is breached by a party then HUD can have the Department of Justice file suit to force the party to comply with the original agreement.
If after the investigation, HUD determines there is no cause to believe discrimination occurred, they will close the case under the determination: “no reasonable cause.” If the claimant disagrees with this, they have the option of filing a civil suit.
If after the investigation, HUD feels there is a cause, they will charge the accused with breaking the law. The parties then have 20 days to determine if they want the case held in Federal court. If not, it will be heard by a HUD Administrative Law Judge.
Finally, we will review Megan's Law and how it relates to housing discrimination. Megan’s Law is not part of the Fair Housing Act but is an important law for agents to be familiar with.
Megan's law was the result of a young girl who was murdered by her neighbor that had a previous record of hurting young girls. The federal law requires law enforcement to make information publicly available about convicted sex offenders living in neighborhoods. Each state is tasked with making sure this information is available to the public, which is typically done through searchable databases. Many local law enforcement officials also use social media to disseminate information about recently released offenders moving into neighborhoods. This information is publically available about convicted sex offenders living in neighborhoods. Each state is tasked with making sure this information is available to the public, which is typically done through searchable databases.
The discussion around Megan's Law and Fair Housing is centered on a real estate agent's duty to disclose. There is no law requiring sellers or agents to disclose to potential buyers about a convicted sex offenders in the neighborhood. The onus for this research falls on the buyer under the law. However, as a real estate agent, it is your duty to make sure your buyers are aware of Megan's Law and their ability to search publicly for this information. Your broker should provide you with a disclosure form that you should have all your buyers sign.
25.1a Federal Fair Housing Laws Infographic
25.2 Americans with Disabilities Act (ADA)
The Americans with Disabilities Act also referred to as ADA was passed by Congress in 1990. The purpose of the law is to make it illegal to discriminate against people with disabilities. The law is broad and was designed to protect individuals from discrimination in many areas of life through five Titles.
Let us quickly review each of the Titles and then we will discuss further in detail Title III.
The first Title is employment. The law wants people to have the same opportunities for people with disabilities in the workplace; therefore, the law makes it so employers must provide reasonable accommodations to the disabled. This can include making changes to certain policies; in addition, to altering the office space to accommodate the person with the disability. This part of the law is both regulated and enforced by the US Equal Employment Opportunity Commission.
State and Local Governments: Title II prohibits discrimination of the disabled in programs and public entities provided by state and local governments. State and local governments must also make a reasonable modification to their programs to avoid discrimination.
Title III of the law is focused on public accommodations. This section aims to prevent discrimination in places that are owned or leased privately but are open to the public such as a restaurant. This is an important section that we will focus much of the chapter on and how it relates to alterations that must be made to commercial properties. Title III is regulated and enforced by the US Department of Justice.
Title IV of the act, focuses on telecommunications. It requires telecommunications providers to ensure that people who have hearing and speech disabilities are able to communicate over the phone across state lines. It also requires there be closed captioning on any public service announcements that are federally funded. Title IV is regulated and enforced by the Federal Communication Commission.
Finally, Title V contains a variety of provisions relating to the ADA as a whole. This section covers items such as state immunity, insurance provisions, along with design and construction standards. It also spells out the relationship between ADA and various state and federal laws.
It is also illegal to discriminate against the disabled on transportation. Under the ADA if it is public transportation it is addressed and enforced under Title II. If it is transportation managed privately is it considered a public accommodation and will fall under Title III.
As an agent, it is not critical for you to have an in-depth understanding of each Title of the Act. As we mentioned we will be focused on Title III of the act.
While the ADA is not part of the Fair Housing Act, the Fair Housing Act was amended in 1998 to include people with disabilities as a protected class. This change helped give birth to the Americans with Disabilities Act.
Now we will take a moment to review who is protected by the Americans with Disabilities Act. In order to qualify as having a disability under the act one must be one of the following:
- A person who has a physical or mental impairment that limits one or more major life activities.
- A person who had a record of an impairment that limits one or more major life activity.
- A person regarded as having an impairment that limits one or more major life activity.
While the law is designed to protect the disabled in many areas of public life, for our purposes we will focus on the public accommodations.
Public accommodations apply to any private business or nonprofit that is open to the public and offers the sale or lease of goods and services. Specifically, the act spells out 12 categories of public accommodations.
Let’s take a moment to review the individual categories.
- Places that serve food or drink
- Places that offers lodging. This could be a hotel but also places like a camp ground.
- Places that offer entertainment or exhibition
- Places of public gathering. This could be a private outdoor garden space that is open to the public.
- Sales or rental establishments. This category would include your real estate brokerage office!
- Service establishments
- Places that offer public displays or collections. A privately owned art gallery would fall into this category.
- Stations that are used for public transportation.
- Places of recreation
- Places of education
- Places that offer social services programs
- Places of exercise. Your local gym must comply with the ADA.
The ADA does not take into consideration the size of the business, even the smallest privately owned company must comply. There are two exemptions under Title III of the ADA and those are religious organizations and private clubs.
Now we will take a moment to review exactly what is required under the act for entities that are considered public accommodations. Essentially the law states one must make reasonable accommodations to their practices and policies in order to make their goods and services available to people with disabilities. So what exactly does this mean?
The law has three very broad principles that include: equal opportunity to participate, equal opportunity to benefit, and finally, one must be given the equal opportunity to receive the benefit in an accommodating setting.
The party with the public accommodation must be willing to adjust the following in order to adhere to these principles.
- The entity must we willing to modify its practices and policies to create equal opportunity.
- The entity must be willing to provide auxiliary aids and services to create equal opportunity.
- Finally, the entity must be ready to remove architectural barriers in the building to create equal opportunity.
The act requires that a public accommodation must adjust itself in order to ensure people with disabilities can participate. The adjustments made cannot create an undue burden on the entity; in addition, the modification cannot change the fundamental nature the goods and service provided.
For example, an art gallery should provide a tour guide who uses sign language to accommodate a group of deaf visitors.
Now we will take a moment to review some of the more common architectural barriers that must be modified for the disabled.
- Parking spaces can often be too small to accommodate people with wheelchairs. Many businesses remove this barrier by offering handicapped parking spots.
- Steps to enter a store or steps in the store. Business can add a ramp to easily accommodate a wheelchair.
There are also guidelines in order to make bathrooms accessible.
The first item is installing a grab bar. The ADA requires a grab bar be fully anchored with a smooth surface that can be easily grabbed. Grab bars for accessible bathrooms must also be installed between 34 and 38 inches off the ground. Finally in order to make sure the bar can be easily grabbed there must be at least a 1-1/2 inches between the bar and the surface it is attached to.
In addition, the accessible bathroom must allow at least one wheel chair to freely rotate in the space. This typically means a width of at least 60”.
The ADA also requires that doors be wide enough to accommodate wheelchairs. All ADA compliant doors must be at least 32 inches wide. Clearance around the door must be at least 36 inches.
There are a few properties that are exempt from the ADA. Those properties are properties that are considered historically significant. If the property is on the register or is eligible for the National Register of Historic places or is designated as historic under local or state law it will be exempt from making changes under the ADA. If the removal of the barrier would destroy the historical significance, then the modification does not need to be made. This does not mean however the business could not provide a video tour for people who are unable to access the property due to a disability.
It is also important to note that there are different standards for newer and older buildings.
For older buildings, the barriers must be removed if the changes are considered readily achievable. The readily achievable standard is looked at on a case by case basis but overall it means the change can be made easily without a major expense.
All new buildings must be built to be readily accessible and usable to people with disabilities.
There are very few exceptions to this standard for new construction. The only exceptions would be if the land had unique characteristics that made it not feasible. However, that exception is exceedingly rare.
The ADA also applies to new residential buildings that are defined as “a building ready for occupancy, after March 31, 1991, has an elevator and more than four units”. The ADA requires these residential buildings to provide the following:
- Public and common areas that are accessible to persons with disabilities
- Doors and hallways must be wide enough for wheelchairs
In addition, individual units must have the following:
- An accessible route into and through the unit
- Accessible light switches, electrical outlets, thermostats and other environmental controls
- Reinforced bathroom walls to allow later installation of grab bars and wheelchair accessible kitchens and bathrooms.
While the ADA is a comprehensive Act, the requirements discussed in this lesson are some of the more fundamental requirements you need to know as a practicing real estate agent.
25.3 Prohibited Acts
The Fair Housing Act is a law designed to protect certain groups from discrimination in the housing market, including the purchase, leasing or financing of property. The Fair Housing Act specifically prohibits various activities that are referred to as prohibited acts. As a real estate agent, it is imperative to understand each of these prohibited acts. In this lesson, we will review each of the prohibited acts and discuss some real-life examples. In addition, we will examine the critical advertising guidelines that you must learn to make sure you are producing marketing materials that do not violate the FHA.
Blockbusting is one of the prohibited acts in the FHA and it has a long history in the United States. Blockbusting occurs when a person persuades another to sell their home in a particular area based on the fear that a minority group is moving to that area, and as a result, their home value will decline. The person who persuades the seller to sell their home typically benefits in some way as a result of panic selling. Let us take a look at an example.
A real estate agent could sell a home to a minority family in a predominately white neighborhood. That same agent could then send around a flyer claiming more minority families are moving to the area and crime will start to go up. The agent could offer cash to buy their homes quickly at discounted prices. The agent would then turn around and sell those homes at higher prices. This is a prime example of blockbusting. Blockbusting is highly illegal!
The second prohibited act under the FHA is steering. Steering is the most likely prohibited act that as an agent you could potentially find yourself walking a thin line. Steering is when one essentially steers or pushes a client towards, or away, from a particular neighborhood based on demographics. For example, if an agent only shows his or her Latino client homes in Spanish neighborhoods, even though there are homes in other neighborhoods that meet the customer's criteria, this would be considered steering. Steering also works the other way, if a buyer comes to you and says they only want to be shown homes in white neighborhoods, you must explain that you are not allowed to show properties based on demographic criteria.
One way to avoid steering is to have your client define the area they are looking to purchase in by specific cross streets. For example, the client is looking to purchase a single-family home between Main Street and Hudson Street, and 1st Avenue and 2nd Avenue.
Let's now review a situation that you will most likely find yourself in the course of your real estate career. You will find that many buyers are coming to you for advice on neighborhoods. As an agent, you must be cautious on how you respond to their questions in order to not violate the FHA. For example, a buyer may ask you if a neighborhood is safe. You should not confirm the safety of an area but rather direct the client to the local police department to review crime statistics.
Redlining is another prohibited act. Redlining occurs when a lender systematically draws a line around a particular area and will not lend in that area based on the racial makeup of the area. Lenders face severe fines if it is shown they have engaged in this practice.
There are also specific advertising guidelines that you must follow when creating marketing materials for your business. It is vital as an agent to know these guidelines. If you ever have a question or are uncertain about a term you are considering using, you should check with your broker. Here we will take a moment to review the words that are not allowed to be used in advertisements.
You may not make reference to race, color or national origin. For example, you cannot advertise a particular neighborhood as being “Homes for the Irish.”
The Act also prohibits the use of religion in advertisements that indicates the housing is only inclusive of certain religions. While you should not use words like Jewish or Christianity, it is okay to use secular terms such as Happy Easter or Merry Christmas. Although those terms may not violate the Act, you may want to be cautious as they could offend potential clients.
Advertisements cannot discriminate based on sex. You should always avoid mentioning gender in your marketing.
Familial Status is also something you need to avoid in your ads. For example, even though you have a one bedroom condo to advertise you should avoid phrases like “Great for singles.”
Finally, advertisements should not reference disabilities such as “no wheelchairs”. However, if the property is a third-floor walk-up, it is okay to include that information in your description.
These guidelines are pretty straightforward to follow. If you ever find yourself thinking of including a phase in an advertisement that might seem to exclude a protected class, it is best to just avoid using it.
You may be wondering, how HUD regulates the real estate industry to make sure agents and landlords are not violating the FHA by participating in prohibited acts. HUD uses paid testers in order to regulate the real estate industry. The testers are hired to reach out and meet with real estate professionals. The tester’s goal is to make sure that a real estate professional is treating everyone equally and not providing different treatment or resources to different protected groups. Often testers will work in pairs. For example, two testers could be sent to your office with almost identical financial profiles, but one of the testers is in a wheelchair. In this scenario, the testers are looking to make sure both candidates are treated equally based on their financial qualifications.
Testers do not identify themselves, and there is no way to know if you are speaking with a tester. The best way to avoid any issues is to understand the guidelines provided by the FHA and treat all your prospects in the same manner.
The practice on the part of unscrupulous speculators or real estate agents of including panic selling of homes at prices below market value, especially by exploiting the prejudices of property owners in neighborhoods in which the racial make-up is changing or appears to be on the verge of changing.
An illegal lending policy of denying real estate loans on properties in older, changing urban areas, usually with large minority populations, because of alleged higher lending risks without due consideration being given by the lending institution to the credit worthiness of the individual loan applicant.
The practice in which real estate brokers guide prospective home buyers towards or away from certain neighborhoods based on their race. Steering is highly illegal.
Volunteers from state or private agencies who enforce fair housing by claiming to be home seekers, thereby finding out if brokers deal fairly with all clients/customers.
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