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How the Law Protects You

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Uncle Sam looks out for his own. That wasn't always true when it came to real estate. But now legislation, much of which has been enacted just in the past decade, is on the side of the home hunter. Let's look at a rundown of the laws that protect consumers looking for a place to live. (Sorry for the legalese, but we want to get these right.)

The Fair Housing Act is a federal law administered by the Department of Housing and Urban Development (HUD). It says that a person cannot be discriminated against based on race, color, religion, sex, handicap, familial status, or national origin. The Act also prohibits discrimination against individuals because they hang out with people in the protected classes.

According to the law it is unlawful to:

  • refuse to sell, rent, or negotiate with any person or otherwise make a dwelling unavailable.
  • differentiate in terms, conditions, or services for the purpose of discriminating.
  • practice discrimination through any statement or advertisement that indicates any preference, limitations, or discrimination.
  • represent that a property is not available when in fact it is available for sale or rent.
  • make a profit by inducing owners to sell or rent because of the prospective entry into the neighborhood of persons in a protected class.
  • alter the terms or conditions for a loan for the purchase, construction, improvement, or repair of a dwelling as a means of discriminating.
  • deny membership or limit the participation in any real estate organization as a means of discriminating.

"Familial status" means that someone can't be discriminated against for having children. It is no longer legal to advertise that a community is "adults only." There is, however, an exemption to the familial status protection: Housing set aside for the elderly can restrict children from living there.

"Handicap" is defined as "a physical or mental impairment or having a history of such impairment that substantially limits one or more of a person's major life activities." It does not include the addiction to a controlled substance. But it does include protection for you if you're in a recovery program for a substance addiction. People with AIDS are protected from discrimination under the "handicap" classification of this law.

There are a few exemptions from this law:

  • The sale or rental of a single family home is exempted when the home is owned by an individual who does not own more than three such homes at one time, a broker or salesperson is not used, and discriminatory advertising is not used.

  • The rental of rooms or units is exempted in an owner-occupied, one-to-four family dwelling.

  • Units owned by religious organizations may be restricted to people of the same religion if membership in the organization is not restricted on the basis of race, color, national origin, handicap, or familial status.

  • A private club that is not open to the public may restrict the rental of its facilities to members as long as the lodgings are not operated commercially. The private club may not discriminate in its requirements for membership.

There are ramifications of the Civil Rights Act of 1968 that are especially important to home buyers or renters. They are:

Blockbusting is the attempt to induce someone to sell their home because someone from a protected class is rumored to be moving into the neighborhood. The classic example of this would be a real estate agent passing out her card to neighbors while telling them that a minority family is moving in down the block and they should sell now before the neighborhood gets any worse. This is illegal.

Steering is the effort to maneuver home buyers into or away from a particular area of town because they won't "fit in." Telling a white couple, "You don't want to live in Mount Pleasant because that's where all the Latinos are" is an example. Another example would be not telling a black family that a house that would otherwise be perfect for them is available in an all-white neighborhood. Both of these are illegal.

Discrimination in advertising is forbidden. Any printed or published material that uses words, no matter how subtle, that are of a discriminatory nature aren't allowed by HUD. Some of the examples that HUD gives are "adult building, Jewish home, restricted, private, integrated, or traditional."

Redlining is the practice of refusing to make mortgages or issue insurance policies in specific areas for reasons other than the economic qualifications of the applicant. HUD has declared this illegal.

If you feel that you have been discriminated against in any of the ways listed above, you should contact the Office of Fair Housing and Equal Opportunity (OFHEO), which is under the direction of HUD. If you feel you have been physically threatened in any way while looking for your new home because you are a member of a protected class, contact the FBI. These are federal crimes and not to be taken lightly.

For even more information about your rights as a homeowner or a prospective homeowner read about your Air Rights, Water Rights, Etc.