The Fair Housing Act was established to advance equality in the US housing market and made it illegal for real estate professionals to discriminate in the sale or rental of housing because of:
- Race
- Color
- Religion
- National origin
- Sex (including gender identity and sexual orientation)
- Disability
- Familial status
Yet while the Fair Housing Act has been in place for over 50 years, complaints and lawsuits alleging discriminatory practices remain pervasive to this day. Real estate firms can face severe consequences such as fines or damages, loss of license and reputational harm if they violate federal, state and local fair housing laws. It is vital for agents to educate themselves, follow industry-accepted best practices and remain up to date with the latest federal and state guidelines.
Common violations of the Fair Housing Act include:
- Refusing to rent or sell housing or 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. While often deliberate, steering can be subconscious and many real estate agents, who have no intention of steering, actually do so without realizing. It’s therefore imperative to include implicit bias in ongoing education and training.
- Advising someone to sell their home because people with a protected characteristic have moved into the neighborhood (commonly referred to as, “Blockbusting”).
- Advertising a home in a way that discourages people of a protected class from purchase.
- Assisting in the creation and/or delivery of ‘buyer love letters’, a common tactic used by buyers to stand out from the crowd in a bidding war. While seemingly harmless, love letters often reveal personal information such as familial status, which can then be used as a reason for a seller to accept or reject an offer.
Tips for real estate agents
- Always remain objective, fair, honest and inclusive
- Avoid expressing personal opinions about a neighborhood or community and focus on the objective features of a property.
- Rather than volunteering opinions on e.g. school quality or levels of crime in a neighborhood, direct your clients to objective, third-party sources of information.
- Provide clients with listings based on their objective criteria.
- Provide the same guidance and information to all clients regardless of their protected characteristics.
- Don’t make or act on assumptions about a client’s financial qualifications or housing preferences etc.
- Never use harassing speech or slurs based on protected characteristics.
- Ensure advertisements used to sell or rent a property do not indicate any preference and do not discriminate based on protected characteristics e.g. a preference for families without children.
- Beware of fair housing testers
With increasing numbers in operation, ‘Fair Housing Testers’ are disguised individuals employed to contact agents and uncover evidence of unlawful housing discrimination.- Be mindful that you can be randomly ‘tested’ at any time while on duty.
- Remember that certain words used in your responses, even if they don’t appear to be discriminatory, can violate fair housing laws.
- Stay up to date with federal, state and local laws
- With a complex web of federal, state and local fair housing laws in place, being educated and up to date with guidelines is crucial.
- Secure a comprehensive errors and omissions (E&O) insurance package
- It is vital that you have an E&O policy in place that provides coverage for defense and damages against claims or allegations of discrimination. While real estate agents have always been at risk of fair housing lawsuits, claims are on the rise so it’s important to have appropriate coverage in place with a strong and stable insurer.
Victor Insurance Managers, Inc. is one of the largest and most experienced underwriting managers of specialty insurance programs in the world. Victor’s Real Estate E&O program provides real estate professionals with the strong, stable and cost-effective coverage they need to operate in today’s changing market.
As a proud partner of the National Association of REALTORS®’ REALTOR Benefits® Program, Victor offers E&O insurance premium credits to NAR members where applicable by state law. Visit victorinsuranceus.com/NAR to find out more and get a quote today.
