How to Spot Real Estate Discrimination
It's against the law to violate the Fair Housing Act
Most real estate agents will bend over backward to help you find the home of your dreams. But there are certain things your agent just can't do for you.
Regulations such as the Fair Housing Act govern the actions of real estate agents, setting parameters for fair and ethical practices in how they market and sell homes, particularly when it comes to unfair or discriminatory practices. Some agents openly try to defy some of these regulations, either because they don't understand them or they don't agree with them, but neither is an excuse.
When you're working with a real estate agent, there are a few things you should be aware of to make sure that they're following the rules and dealing with you fairly—and that your expectations are within legal bounds.
Real Estate Regulators
There are several sets of regulations and guidelines that govern or affect a real estate agent's actions, including:
- The Fair Housing Act
- The National Association of REALTORS® Code of Ethics
- State real estate laws
- An employing broker's guidelines
- Other discrimination laws
The Federal Fair Housing Act
At the center of these guidelines is the Fair Housing Act. This set of regulations is easy for agents to overlook, yet it is essential to an agent's practice. The Fair Housing Act was signed into law to prevent discrimination of various kinds in housing across the U.S. The Civil Rights Act of 1968 contained the original legislation, which was later amended in 1974 and 1988.
There are seven classes protected by the Fair Housing Act. They are:
- National origin
- Familial status
Agents, brokers, lenders, landlords, and anyone else involved in the real estate process may not conduct their business in ways that discriminate against people for any of the above reasons.
State Fair Housing Laws
Many states have passed their own laws regarding discrimination. The state of California, for example, expanded the protected classes in its own fair housing legislation. The protected classes under the California Fair Employment and Housing Act include, in addition to the above federal provisions:
- Gender expression or gender identity
- Genetic information
- Marital status
- Medical condition
- Sexual orientation
- Military or veteran status
- Primary language
- Source of income
Other states include their own sets of expanded provisions that restrict the actions of realtors and brokers. If you're asking for information and your agent isn't giving you a direct answer, there's a good chance it has something to do with fair housing legislation or related ethics codes.
Neighborhoods Populated by Protected Classes
It comes as a shock to many people when they learn that a real estate agent cannot address some requests because they are bound by law. For example, if a newly married Jewish couple asks a real estate agent to find them a home in a particular neighborhood, the agent can't nudge them one way or another based on assumptions about their religion.
Similarly, an agent cannot legally answer questions about the ethnic makeup of a neighborhood. For example, buyers should not ask an agent to show them homes in neighborhoods comprised primarily of Latinos, African-Americans, Native Americans, or any other ethnicity or race. Likewise, the agent can't try to direct buyers only to certain neighborhoods based on their race or ethnicity.
This process of pushing buyers one direction or another based on any protected class is known as "steering," and it is strictly prohibited.
Discrimination in Listing Advertising
In advertising, agents must refrain from using words deemed to represent any protected classes. For example, none of the following words is appropriate, and many of them could violate fair housing laws or NAR ethics codes. When listing your home for sale or property for rent, do not ask your agent to use words like:
- Bachelor apartment
- Singles only
- Golden agers
- Section eight
- No children welcome
Demands for School Districts and Safe Neighborhoods
Because of lawsuits, there are many other types of requests smart real estate agents will not address. In California, for example, there is no guarantee that homeowners who live within certain school districts will be able to enroll their children in that school. If a client asks their agent to find them a home in a specific school district, the agent may explain that their children might not get accepted into the school of their choice.
Guaranteeing a certain school district is not within the scope of an agent's fiduciary duties and could also be construed as a fair housing violation.
Ditto on discussing crime in neighborhoods. If a buyer wants to know the crime statistics of an area, smart agents will direct buyers to the police department or other sources of information. An agent should never disclose crime stats or say a neighborhood is a relatively safe place to live, even if they believe it to be true.
The Bottom Line
These are just a few examples of the ways in which your agent may have to be careful to practice real estate ethically and legally. Before you look to buy or sell, it's a good idea to get familiar with some of the basic rules regarding housing discrimination, so you and your agent are on the same page.