Chapter 5
Knowing the Fair Housing Laws for Selling Real Estate
IN THIS CHAPTER
Finding out the basics of fair housing laws
Understanding (and avoiding) discriminatory activities in real estate practices
Discovering groups protected under the law
Checking out exceptions to fair housing laws
Knowing how to enforce the law
As a real estate agent, whether broker or salesperson, you’re expected to know and abide by fair housing regulations. Real estate agents are key players in promoting fair housing and preventing discrimination in housing. State exam writers expect you to know about fair housing laws at the federal level, because those laws apply to all parts of the country. Many states, counties, and cities have enacted additional fair housing laws that supplement federal law. State examiners expect you to know about these local laws. As you study for the state licensing exam, you need to be sure to find out about fair housing laws that apply only to your state or local municipality.
In this chapter, I talk about laws the federal government has adopted to prevent discrimination in the sale and rental of land, houses, and apartments. These federal fair housing laws are a series of separate laws that were enacted at different times. I also talk about groups that are protected by these laws (called protected classes) and the specific discriminatory actions that are forbidden. And to top it all off, I also give you information about how the law is enforced as well as a few exceptions to the law.
Practicing Fair Housing: The Basics
The basic concept and goal of fair housing laws at the federal, state, and local levels is to prevent discrimination in housing and permit people to have an equal opportunity to live where they want to live. A student of mine once said that the only form of discrimination that’s legal is monetary. An ad campaign promoting fair housing a while ago stated something to the effect that the only color you can discriminate against is green, as in the color of money.
In this section, I discuss specific federal laws that deal with housing discrimination, including some dates that you definitely want to remember. I also explain an interesting case that shows that a law is a law no matter how old it is. In addition, I talk about state and local laws, and the all-important fair housing poster.
As a broker who hires people, you also need to be aware of and abide by nondiscrimination laws with respect to hiring practices. Generally speaking, equal employment laws aren’t taught in real estate courses and are rarely tested. However, if you’re a candidate for the broker’s license, you need to find out whether your state’s exam requires you to know anything about equal opportunity employment laws where hiring practices are concerned.
Understanding federal fair housing laws
Real estate agents primarily deal with and apply federal fair housing laws throughout the United States. In this section, I give you information on several federal laws, and I can pretty much guarantee that you’ll see a few questions about these laws on the exam.
I discuss another set of laws related to fair housing in Chapter 15. That chapter is about financing real estate, and the laws I discuss there deal with providing equal opportunity and disclosure in the all-important mortgage loan process.
The 1866 Civil Rights Act
In 1866, right after the end of the Civil War, the United States Congress passed the Civil Rights Act of 1866. This law essentially prohibits discrimination in the purchase, sale, lease, or conveyance of real property (real estate and personal property) on the basis of race or color. The language of the act is clear insofar as it basically says that without any exception whatsoever, all citizens shall have the same rights regarding property regardless of race. The other unique thing about this act is that enforcement is accomplished by taking the case directly to federal court.
Although the act itself is important, an almost equally important 1968 court case that involved the act resulted in a landmark decision in fair housing law that you should remember. The case, Jones versus Alfred H. Mayer Company, essentially affirmed the fact that the 1866 act prohibited any discrimination on the basis of race by private individuals and the government with no exceptions. This case was filed shortly after the enactment of the Fair Housing Act of 1968 (see the next section).
The lack of any exceptions to the 1866 Act is important, because more recent fair housing laws actually include exceptions. Because it was enacted first and still remains on the books, the 1866 act is deemed valid even today, having been affirmed in the Jones versus Mayer case as superseding later laws with respect to exceptions regarding discrimination on the basis of race. Because of that, no exceptions exist with respect to racial discrimination in housing. For more, see “Bending the Rules: Understanding Exceptions to the Law,” later in this chapter.
The 1968 Fair Housing Act
The Fair Housing Act of 1968 is more technically known as Title VIII (read “Title Eight”) of the Civil Rights Act of 1968. This act, the first in the 20th century, prohibited certain actions that were viewed as discriminatory with respect to housing and specifically defined groups, called protected classes, to which it applied. Unlike the 1866 Civil Rights Act (see the previous section), it included specific exceptions.
Together with the 1866 Civil Rights Act, the Housing and Community Development Act of 1974, and the Fair Housing Amendments Act of 1988, which added even more protected classes to the list, the 1968 act forms the basis of fair housing standards as they apply to real estate agents throughout the United States. The 1968 act is enforced by the Department of Housing and Urban Development (HUD).
These laws are best understood when they’re broken down into what you can’t do (prohibited acts), who you can’t do it to (protected classes), and exceptions to the law. Presenting them this way enables me to cover this material within the context of what I discuss in the rest of this chapter. Check out “Don’t Do It: Avoiding Discriminatory Actions,” “Feeling Safe: Identifying Who’s Protected,” and “Bending the Rules: Understanding Exceptions to the Law” for more details.
Researching state and local laws
State and local governments like counties and cities have gradually adopted their own fair housing laws. These local laws need to be viewed and obeyed in addition to and not instead of federal law. The general rule regarding situations in which federal and local laws cover the same issues is that the more restrictive or stricter law applies. Local provisions usually don’t add prohibited activities; federal law is pretty comprehensive with respect to prohibited discriminatory practices. Local provisions that are sometimes added include additional protected classes, or groups that require relief under the fair housing laws. For example, some cities and several states have added sexual orientation as a protected class to their fair housing laws. In addition, exceptions that the federal law permits sometimes are removed at the local level. (For more, see “Bending the Rules: Understanding Exceptions to the Law,” later in this chapter.)
Megan’s Law is a federally enacted law that promotes registration of convicted sex offenders after they’re released from prison and take up residence in a neighborhood. Megan’s Law has raised issues of the civil rights and rights to privacy of offenders in local jurisdictions. So you need to check with your state to determine your obligations as an agent to provide information to prospective buyers regarding the presence of sex offenders in the neighborhood. (For more, see Chapter 4.)
For exam purposes and, of course, for purposes of your future real estate practice, you need to research and find out as much as you can about any local, state, or municipal laws that supplement federal fair housing laws. Pay careful attention to any additional prohibited acts, additional protected classes, and exceptions to the exceptions.
Displaying the fair housing poster
The Department of Housing and Urban Development (HUD), which is responsible for the Federal Fair Housing Act, has created a fair housing poster that must be prominently displayed in all real estate offices. Failure to display the sign can be considered noncompliance with fair housing law and will be used as evidence of discrimination whenever a complaint is brought against the real estate office. HUD also requires that its fair housing logo or other such appropriate wording be used in all real estate advertising.
Don’t Do It: Avoiding Discriminatory Actions
The basic provisions of the Federal Fair Housing Act of 1968 define certain actions that are considered discriminatory and prohibit them. I don’t personally know the legislative background that went into writing this law, but it appears that Congress was trying to be specific enough to deal with people who may try to split hairs in attempts to circumvent a law that might simply have stated: “Do not discriminate.” Specific activities, therefore, are listed in the act. I discuss and provide examples of each activity that’s included. Remember these actions are considered discriminatory with respect to housing and are not permitted. For exam purposes, make sure you understand and remember prohibited activities and can identify them if they’re presented in questions featuring short case studies. For more about groups that are protected, see “Feeling Safe: Identifying Who’s Protected,” later in this chapter.
No way: Refusing to sell or rent
This prohibited action is easy to pinpoint. Declarations like, “I won’t rent you an apartment or sell you my house because you are (fill in the blank with a protected class: any race, color, religion, sex, ethnic background, familial status, or handicap).” Of course, a specific reason doesn’t have to be mentioned for this kind of refusal to be considered discrimination.
On one condition … or a few: Changing terms for rental, sale, or services
A landlord or owner is prohibited from changing the terms or conditions of a rental or sale of a property for different tenants or buyers as a way to discriminate. Here’s an example I use in my classes: You own an apartment building and have extensively researched damages commonly done by various types of individuals and developed a detailed schedule of security payments based on race, family status (with children, or not), and marital status. Is this activity legal or not? Emphatically, not! Even though you supposedly have objective data and probably claim that you’re not using this activity to discriminate but rather only to protect yourself, it nevertheless is viewed as discrimination.
You need not apply: Discriminatory advertising
Discriminatory advertising is prohibited. Although discriminatory advertising is easy to understand, it may be a little confusing to apply. The obvious and outright discriminatory advertisement is, for example, “Apartment for rent, Latinos not welcome.” You’d probably never be able to place such an ad in any reputable newspaper anyway, and even if you could, you’d be breaking the law. Suppose, however, that you place an ad in a suburban newspaper for a new housing subdivision that includes a picture of several White families sitting around the backyard barbecue. Such an ad also is considered discriminatory, because the ad can be viewed as welcoming only White people to the development. The reverse also would likely be considered discriminatory. For example, an ad showing only Latinos in the backyard might be viewed as an attempt to steer that ethnic group to that neighborhood. You can read about steering later in this chapter.
HUD issued guidelines that must be followed in real estate advertising. These guidelines cover primary areas of possible discrimination:
- Advertising that uses certain words, phrases, pictures, or other visual representations that are discriminatory.
- Using certain types of media as a means of discrimination. For example, advertising in media only available to or likely to be seen by targeted groups (protected classes) or in reverse not seen by those groups such as a local newspaper that is read by a White ethnic group.
HUD provides fairly specific information about what language is and isn’t acceptable in real estate advertising. For exam purposes and for real-world applications, remember that the use of certain words or phrases is prohibited even when your intent is not to discriminate. The categories of the prohibited language with some examples include the following:
- Code words, catchwords, or catchphrases: These prohibited words may be a little more subtle or regional in nature. Obvious phrases like “integrated neighborhood” cannot be used. Words like “exclusive,” although more subtle, may convey a racially exclusive or ethnically exclusive message and therefore are to be avoided.
- Color: No use of words describing color as it relates to race or ethnicity is permitted. For example, “White” or “Black.”
- Familial status: The term familial status generally refers to the presence or absence of children in the family. Although marital status isn’t a protected federal class, HUD guidelines prohibit advertising that states or implies “married couple only” or other similar language.
- Handicap: “Property not suitable for a handicapped person” or any language that suggests an exclusion like that is forbidden. Inclusive words like “Apartment is handicapped accessible” are acceptable.
- National origin: The use of words that describe national origin like Italian, Mexican, and so on are prohibited.
- Race: No use of racially descriptive words, such as Asian or Caucasian, for example, is permitted.
- Religion: Words describing religions, like Catholic, Christian, non-Christian, and so on, are prohibited.
- Sex or gender: This category tends to be a problem more with rental housing than housing that’s for sale. Any gender-preference words are prohibited. An exception is made for people who want to share an apartment or house with a roommate of the same sex. So you can advertise for a female roommate to share an apartment, but you can’t advertise for only a male tenant for a rental apartment in an apartment house you own.
In addition any photos, drawings, or symbols that may imply preference with respect to any of the above categories are prohibited — for example, showing a picture of a church next to the house you’re advertising for sale. Describing the location by using potentially biased references, such as “near the Catholic church,” is prohibited. A reference to a known discriminatory facility must also be avoided. So you won’t advertise a house for sale “near the XYZ Country Club” when the country club is known to discriminate in its membership policies.
Prohibited language, photos, symbols, and so on are considered discriminatory at their face value, or as they appear, meaning that good intentions don’t count. Furthermore, discriminatory language can’t be used to describe a tenant or buyer preference, the neighborhood, or the dwelling itself. So “Good Christian building” is just as bad and just as prohibited as “Apartment for rent: Only Christians need apply.”
Avoid using welcoming and inclusive terms, such as advertising that states specific groups are welcome. The use of the HUD fair housing logo and words to the effect that fair housing guidelines apply are the proper ways to say that all groups are welcome to buy or rent.
One other factor that HUD addresses in its guidelines is the use of terms that have lost their original religious or exclusionary meaning. For example, an ad placed during December that reads “Give yourself a Christmas present with a new house” would not be prohibited.
All lies: Telling someone that property isn’t available (when it really is)
If a house has been sold or an apartment already rented, so be it. But tell someone that an apartment is already rented when it isn’t or that a house isn’t available for sale when it is, and that’s considered discrimination and therefore is prohibited. This form of discrimination may seem obvious and almost not worthy of its own rule. And although the background of this prohibition has faded into obscurity, I believe it had something to do with property owners saying that a dwelling unit was unavailable and then defending their action by indicating what they meant was that the unit was unavailable to a particular person.
Scaring people into selling: Blockbusting
Blockbusting generally is defined as encouraging people to sell their homes because of the entry or potential entry into the community or neighborhood of a particular group of people. The group usually tends to be different in some aspect, such as race, color, or country of origin. The fear that blockbusting generates is the possible loss of property value, and the idea behind it is to induce panic selling and generate listings of houses to sell or bargains for developers. The prohibition of blockbusting is particularly aimed at members of the real estate industry, because agents benefit from panic selling by getting new listings, but investors who use blockbusting techniques for profit may also be guilty of discrimination.
Telling people where to live: Steering
Steering is guiding, encouraging, or inducing people in some way to move to or stay away from a certain area or neighborhood, and it’s illegal. Overt steering is easy to understand and avoid. Subtle forms of steering in the name of being helpful, like saying, “This is a good neighborhood,” or “You wouldn’t be happy here,” also must be avoided. Participating in what I call self-steering is equally prohibited. What I mean, for example, is that a couple that asks to be shown houses “only in White neighborhoods” can’t be accommodated. You must tell them that you can show them houses that meet their needs and financial situation in various neighborhoods, and then do so. And by the way, although avoiding discrimination is easy when someone says “White neighborhood” or something like that, it’s sometimes a little more difficult to acknowledge the problem when someone asks for a neighborhood where a particular language is heavily spoken, because the family just came to this country.
Specifically accommodating a request like this is still considered steering, and it’s illegal. Again, you can show the family a variety of houses that meet their financial and space needs and then let them decide. In some states offering opinions about the quality of the local schools is also considered steering and must be avoided. Though this probably isn’t on the exam, real estate agents should provide the same information about a house to every prospective buyer. Providing different information to different buyers, especially when protected classes are involved, could be viewed as discrimination. You can read about protected classes in the section “Feeling Safe: Identifying Who’s Protected” a little later on.
No money for you: Changing loan conditions
Once upon a time it was a common practice to not lend money to unmarried women regardless of their income or employment status. It was also common to not count a married woman’s income in the mortgage loan calculation because she’d likely quit work to have children. Nowadays, any such actions, including discrimination on the basis of the other protected classes such as race or ethnic background, are forbidden. You can read about laws prohibiting discrimination in mortgage lending in Chapter 15.
Put away that crayon: Redlining
Redlining is discrimination in the lending of mortgage money based on location. This happens when a lending institution determines that for various reasons it will no longer make loans in a particular area. It figuratively or literally draws a red line around a particular neighborhood on a map and refuses to make loans on properties in that neighborhood regardless of the personal income qualifications of the borrower.
In 1977, as a result of past redlining activities, the federal government passed the Community Reinvestment Act, which requires certain financial institutions such as banks to develop and implement programs for reinvesting in their neighborhoods through mortgage, home improvement, and other types of loans. These financial institutions come under periodic review to determine whether they’re in compliance with the act.
You can’t join: Denying membership in real estate organizations
One of the more blatant forms of exclusionary discrimination is denial of membership in a multiple listing association to certain racial or ethnic groups. Because these associations share property listings of houses that are for sale, such a denial has a direct effect on keeping communities segregated. (For more on multiple listings, see Chapter 4.)
A more subtle form of this type of illegal activity is a club, group, or association that meets periodically to share property listings where a multiple listing system doesn’t exist. Denial of membership in such a group is a prohibited action. The prohibition extends to any brokers’ organization and includes professional real estate organizations.
Feeling Safe: Identifying Who’s Protected
Federal fair housing laws protect essentially everyone. The government, however, has created protected classes — groups against which you can’t discriminate. They’re not so much groups of people as they are characteristics that can be used for the purposes of discrimination … and of course, should not be. In the sections that follow, I review federal, state, and local protected classes.
Knowing the federal protected classes
Since the adoption of the 1968 Federal Fair Housing Act, the history of federal fair housing legislation has been one of extending nondiscrimination protection to more and more groups. The following is a summary of the legislative actions, when they were added, and the classes they protect. You can expect questions on the state exam about the protected classes and when they were added, and you may see questions that are like case studies.
- 1866 Civil Rights Act: Protects against racial discrimination
- 1968 Federal Fair Housing Act: Protects race, color, religion, and national origin.
- 1974 Housing and Community Development Act: Protects against sex (gender) bias.
- 1988 Fair Housing Amendments Act: Protects the handicapped and familial status (presence of children). Take note that handicaps include persons with AIDS as well as alcoholics (but not drug addiction) in addition to conditions like visual, hearing, and physical handicaps and mental disability. (For more about laws related to the disabled, see “Extra Coverage: Protecting the Disabled from Discrimination,” later in this chapter.)
Taken all together the current federal protected classes are as follows: Race, color, religion, national origin, gender, handicapping conditions, and familial status.
One relatively recent addition to the federal protected classes: In some instances, when the effect falls disproportionately on an existing protected class, criminal history may also fall into the category of a protected class. The guidelines for this class will probably become clearer in the coming years, but you should be aware of this change in the law.
Recognizing state and local protected classes
Finding out whether the state or local governments (counties, towns, villages, or cities) within your state have added protected classes to fair housing laws is one of the most important steps you can take in preparing for the exam. Two of the more common classes these days are marital status and sexual orientation. In addition, mental disabilities may be more specially defined and protected in your state.
In addition, local exceptions to the exceptions may have been adopted, meaning that although federal law may permit an exception, local law may not. Questions based on state or local fair housing laws are fair game in state real estate exams. And remember that if a local fair housing law and a federal fair housing law are different, the stricter applies.
Bending the Rules: Understanding Exceptions to the Law
The 1968 Federal Fair Housing Act was written with certain exceptions, or cases in which people, in a sense, can discriminate in housing issues. In addition to remembering the exceptions themselves for test purposes, you need to remember these two important factors with respect to these exceptions:
- Even if an exception is legal for an individual (such as the owner of a single-family home selling her house), a real estate agent is not permitted to participate in the exception. Real estate agents are held to a higher standard in fair housing matters.
- Discriminatory advertising may not be used, even when the exception itself is legal. The owner of a single-family home can’t use discriminatory advertising in selling her house, even though she could discriminate in the ultimate sale itself.
Don’t forget that regardless of exemptions permitted by the 1968 Federal Fair Housing Act, the 1866 Civil Rights Act permits no exceptions with respect to race. The exceptions in the 1988 Law are as follows:
- Age: In order to accommodate age-oriented communities for older adults, an exception is made to the antidiscrimination laws involving age and familial (presence of children) status. Housing may be restricted to people 62 years of age or older or 55 years of age or older in cases where at least one occupant per unit is 55 and at least 80 percent of the units are occupied by people ages 55 or older. In these cases children may be excluded.
- Owner-occupied housing: Multifamily housing of two to four units, where one of the units is owner-occupied, is exempt from fair housing laws.
- Private clubs: An organization that restricts its membership may provide restricted housing to its members, as long as it doesn’t offer housing to the general public.
- Public-law occupancy standards: Local maximum occupancy standards aren’t superseded in their application by the Fair Housing Act. For example, if a local law provides a maximum occupancy of two people per bedroom and you rent out a studio apartment in a building you own, you can’t be forced to rent the apartment to a couple with a child.
- Religious organizations: Housing sponsored by a religious organization may be restricted to members of that particular religious organization, provided the religion doesn’t discriminate in its membership policies.
- Single-family housing: The sale or rental of a single-family house is exempted from the rules of the Fair Housing Act if the owner doesn’t own more than three units at one time, and neither a broker nor discriminatory advertising is used. If such a property is sold, no more than one house can be sold during every two-year period.
Extra Coverage: Protecting the Disabled from Discrimination
The disabled are protected as a class with respect to fair housing law. Landlords must permit tenants to make reasonable changes to an apartment to accommodate their handicap. Tenants are responsible for returning the apartment to its original condition.
However, another law relating to the protection of the disabled normally is covered on the test. Congress passed the American with Disabilities Act (ADA) in 1992 to ensure not only protection from discrimination but also to provide access to public spaces. This law, which affects public and commercial buildings, requires buildings to be accessible to handicapped persons. It also requires new multifamily housing of four or more units built after March 13, 1991, to be handicapped accessible. The rules vary slightly for buildings with and without elevators. Employers, including real estate brokers, must be aware of the necessity of their places of employment being accessible to handicapped employees and the handicapped public at large. Real estate agents also need to be aware of ADA regulations with respect to commercial or other public buildings with which they may be involved.
Staying Strong: Enforcing the Law
Complaints regarding violations of the Fair Housing Act must be made to HUD within a year of the event. HUD conducts an investigation and may attempt to remedy the situation by getting the property owner who violates the law to stop the action and take steps to prevent it from happening again. Those with complaints may also file a suit in federal court within two years of the violation.
If HUD finds a property owner guilty following an administrative hearing, it may impose fines of up to $10,000 for the first offense, up to $25,000 for the second offense if it happens within five years of the first, and up to $50,000 for a third offense, if it happens within seven years of the first event.
In addition, anyone who brings a HUD complaint can sue in federal civil court, where generally no limits are placed on monetary damages that can be awarded.
Remember that a violation of the 1866 Civil Rights Act prohibiting racial discrimination may be brought directly to federal court.
Review Questions and Answers
Questions on the state exam normally involve knowing which laws are which, what groups are protected, and what the exceptions are. At the salesperson’s level you can expect the questions to be straightforward. At the broker’s level the questions may require a bit more interpretation of the law. Remember to check your state law regarding state and local fair housing rules and additional protected classes.
1. Inducing people to panic sell by telling them that a “lower-class immigrant group” is moving into the neighborhood is called
(A) steering.
(B) redlining.
(C) canvassing.
(D) blockbusting.
Correct answer: (D). Blockbusting is inducing people to panic sell in order for the real estate agent or a developer to make a profit. Redlining is discrimination in the lending of mortgage money based on location. Steering is directing people to or away from certain neighborhoods as a means of discrimination. Canvassing is sending out letters or knocking on doors to see if you can offer your real estate services to people. It is a fairly normal way of doing business.
2. “Sorry, we don’t make any loans on houses in that neighborhood” is an example of
(A) blockbusting.
(B) steering.
(C) redlining.
(D) an acceptable business decision.
Correct answer: (C). Redlining is a practice where banks and other lending institutions refuse to make loans in certain neighborhoods regardless of the qualifications of the borrower. Blockbusting is inducing people to panic sell to make a profit (for example, by getting listings to sell property). Steering is directing people to or away from certain neighborhoods as a means of discrimination. These actions are all illegal.
3. Which of the following would be unacceptable under the federal fair housing law?
(A) The resident owner of a three-family house refusing to rent to an Asian man.
(B) A senior residence for people over 62.
(C) A private club of graduates of an exclusive prep school.
(D) Baptist Church sponsored housing available only to Baptists.
Correct answer: (A). Answers (B), (C), and (D) all fall under the exceptions to the law. There are no exceptions with respect to race. For more on exceptions, see “Bending the Rules: Understanding Exceptions to the Law,” earlier in this chapter.
4. Mike the seller refuses to sell his house to a Black couple.
(A) He is breaking the law under the 1968 Federal Fair Housing Act.
(B) He is breaking the law under the 1866 Civil Rights Act.
(C) He is breaking no law as long as he doesn’t use a real estate agent or discriminatory advertising.
(D) He is breaking no law as long as he owns fewer than three houses and this is the only one he sells in two years.
Correct answer: (B). Answer (B) is correct because race was eliminated as an allowable exception by a court case that upheld the 1866 law. Answer (A) is wrong because the 1968 law provides an exception to the owner of a single-family house. Answers (C) and (D) are wrong because there is no exception with respect to race, so Mike is indeed breaking a law.
5. The fine for a third violation of the federal Fair Housing Act can be as high as
(A) $10,000.
(B) $25,000.
(C) $50,000.
(D) unlimited.
Correct answer: (C). $10,000 is the maximum fine for a first offense, and $25,000 is the maximum fine for a second offense. There are no unlimited fines.
6. A deed restriction says that a property cannot be sold to a person of Native American ancestry. Which of the following is true?
(A) The deed restriction supersedes fair housing law.
(B) The fair housing laws do not apply to Native Americans because technically they are part of the Indian Nation.
(C) Fair housing law takes precedence over the deed restriction.
(D) This type of restriction was automatically removed by a treaty in 1888.
Correct answer: (C). A deed restriction must be legal to be valid (see Chapter 8 for more on deed restrictions). These restrictions, many involving race and some referencing ethnicity common in some areas, are illegal and therefore invalid because of the 1866 act or the 1968 Act. I made up Answers (B) and (D).
7. Which of the following advertisements for a house for sale would probably be acceptable?
(A) Quiet Christian neighborhood
(B) Fill your Easter basket with a new house
(C) Husband’s dream workshop
(D) Two blocks from the local Episcopal Church
Correct answer: (B). In HUD’s determination, holidays like Easter and Christmas have lost their uniquely religious context and are therefore acceptable to use in advertisements. “Quiet Christian neighborhood” targets a particular religious group. “Husband’s dream workshop” can be viewed as being sexually discriminatory because wives can also enjoy a dream workshop. “Two blocks from the local Episcopal church” is incorrect because references to landmarks referring to a specific religion are deemed unacceptable by HUD.
8. Under federal fair housing laws, which of the following is legal?
(A) Refusing to rent an apartment to a man because he’s gay
(B) Refusing to sell a house to someone because he’s Buddhist
(C) Showing a White couple houses only in White neighborhoods because they asked you to
(D) Charging different security deposits based on the number of children in a family
Correct answer: (A). Sexual orientation is not a protected class in the federal law. It may be in your state, but that’s not what this question says. Always make sure to read questions carefully, and be sure to check your state and local fair housing law to see if sexual orientation or other classes in addition to the federal ones are protected.
9. The Civil Rights Act of 1866 is not enforced by
(A) HUD.
(B) federal courts.
(C) state courts.
(D) the Federal Department of Justice
Correct answer: (C). The other answers may all be involved in enforcing the 1866 Act.
10. Which of the following is legal?
(A) A broker offering discounts to members of a certain ethnic group as a way of encouraging them to integrate an area
(B) Refusing to make a mortgage loan to a Black family with poor credit history
(C) A broker advertising property exclusively in Spanish-language newspapers
(D) A broker providing information on the demographics of a neighborhood including statistics on race and ethnic background
Correct answer: (B). Money is the only legal basis for discrimination. All the other answers are wrong because they are discriminatory on some other basis that is prohibited by law. Answer (D) might be confusing because the information is public. Real estate agents however must be careful not to imply in any way that they’re steering people to or from certain neighborhoods.