BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
DISCRIMINATION IN HOUSING
We all know it is illegal to discriminate in housing. It is against federal law, state law and the Code of Ethics. And, it is just plain wrong.
The intention of federal and state fair housing laws is to require that ALL persons be treated equally, receive the same services, and have an equal opportunity to live in the housing of their choice – whether rental or for-sale housing.
1. PROTECTED CLASSES: Federal, state and some local laws define which persons are protected by providing fair housing protections to “protected classes.
A. FEDERAL LAW: Following are the seven protected classes under Federal Law:
Race
Color
Religion
National origin
Sex
Handicap (called Disability in California)
Familial Status (Households with children under age 18)
B. CALIFORNIA LAW: Under California law, which is enforced by the California Department of Fair Employment and Housing (“DFEH”), it is illegal:
1) For the owner of any housing accommodation to make or to cause to be made any written or oral inquiry concerning information regarding protected classes of any person seeking to purchase, rent, or lease any housing accommodation.
2) To make, print or advertise any preference, limitation or discrimination based on one of these protected classes.
3) To aid or abet the doing of any of the above unlawful acts or practices.
In addition to the seven federal protected classes, California offers legal protection based on the following classes and, in some cases, expanded definitions of federal protected classes.
Sex (includes pregnancy, childbirth, breastfeeding or medical conditions related to pregnancy, childbirth or breastfeeding)
Sexual orientation
Gender identity
Gender expression
Marital status
Religion (including religious dress and grooming practices)
Age (discrimination against old or young persons)
Ancestry
Source of income *
Disability **
Medical condition
Genetic information
* Source of Income: means lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant.
**Disability: California’s definition is broader than the federal rule and includes certain medical conditions as well as mental and emotional disability. The DFEH defines disability as “an impairment that makes performance of a major life activity difficult.” The law requires housing providers to make reasonable accommodation in rules and practices to permit persons with disabilities to use and enjoy a dwelling, and to allow persons with disabilities to make reasonable modifications of the premises.
Finally, California recognizes two additional concepts which will be considered to be discrimination in housing:
1) Arbitrary Discrimination: California recognizes as discrimination in housing the concept of “arbitrary discrimination.” This has been interpreted to mean discrimination against any person or groups of persons based on “personal characteristics” such as tattoos or body piercings; but this seems more open-ended and is a concern for housing providers, sellers and their agents.
2) Perception and Association: “Perception” discrimination is if a person is unfairly treated because he or she is perceived to be a member of a protected class even if based on an incorrect assumption. “Association” is discrimination against someone because their friends or guests are from protected classes.
C. LOCAL LAWS: Some cities have added their own protected classes. In San Francisco, height and weight are protected classes. Berkeley includes “students” as a protected class. There may be others.
2. CODE OF ETHICS: Article 10 of the NAR Code of Ethics makes it an ethical violation to deny equal professional services to any person by reason of race, religion, sex, handicap, familial status or national origin, sexual orientation or gender identity. Standard of Practice 10-1 states that, when involved in a residential sale or lease, REALTORS® shall not volunteer information regarding the racial, religious or ethnic composition of any neighborhood. However, Standard of Practice 10-2 states that when not involved in the sale or lease of a residence, REALTORS® may provide demographic information related to a property, transaction or professional assignment to a party if such demographic information (a) is deemed by the REALTOR® to be needed to assist with or complete, in a manner consistent with Article 10, a real estate transaction or professional assignment and (b) is obtained or derived from a recognized, reliable, independent, and impartial source. The source of such information and any additions, deletions, modifications, interpretations, or other changes shall be disclosed in reasonable detail.
3. FAIR HOUSING TESTERS ARE COMING: The federal Department of Housing and Urban Development (“HUD”), which along with the DFEH enforces housing discrimination laws, frequently sends “testers” around to real estate companies to see if prospective buyers who are members of one of the federal protected classes are treated differently from those of a different race or other protected class. In a typical situation, a single buyer or couple will appear and present an economic profile (job, income, down payment, etc.). Later, a second single buyer or couple will appear presenting a similar economic profile, but will be a member of a different race or other protected class. If the two “testers” are treated differently, there will be a complaint of discrimination by HUD against the agent, and the brokerage. Different treatment could include: denial of service; different level of service; steering to a particular part of town or to different communities (e.g., white buyer taken to one area and a Hispanic buyer taken to a different area to see property). The testers are known to even dress differently. One buyer may be very well dressed, while the other buyer (while presenting a similar economic profile) might be poorly dressed.
In addition, there are local organizations and attorneys who will send testers particularly in the area of disability discrimination. One form of this is to test for discrimination based on a mental or emotional disability where the tester will inquire about whether “companion animals” are accepted and if there is a pet deposit required on a rental for that animal. NOTE WELL: There can NEVER be a pet deposit for a companion or service animal. A “yes” answer to the question whether there is a pet deposit for a companion or service animal WILL result in a fair housing discrimination complaint with fines and expensive attorney fees for defense.
For details, see Weekly Practice Tip entitled: “Rental Testers Looking for Discrimination in Rentals”
DON’T BE THE NEXT DEFENDANT NAMED IN A HUD OR DFEH DISCRIMINATION CASE.
PRACTICE TIPS:
1. Remind your sellers and landlords that they cannot discriminate against buyers or renters on the basis of buyer or tenant being a member of the protected classes (i.e., “I’m not selling to THEM.”). It is a federal and state crime to do so – and a crime for you to participate in the discrimination.
2. Remember the list of “protected classes” and make every attempt to treat all prospective buyers and renters the same.
3. Assume all buyers and renters to whom you are talking are fair housing “testers.”
4. Make every effort to treat all buyers and renters with the same level of service.
5. Do not make snap judgments of prospective buyers or renters based on how they look or how they are dressed.
6. If your buyer or tenant clients want to know “what kind of people live in this neighborhood,” advise them that you may not engage in that discussion since it could be discriminatory. Advise the buyers that, if that is important to them, they should drive the neighborhood and do their own research. Much demographic information is available on-line at various sites, including the U. S. Census Bureau.
7. The law firm of Kimball, Tirey & St. John publishes “The California Fair Housing Encyclopedia” (actually a 150-page booklet) which is an excellent guide on fair housing for owners and managers of residential real property in California. This booklet is also helpful for brokers and agents since it provides more detailed information on fair housing laws and trends in California. The book can be purchased on line for $27.95 from the law firm’s store at:
http://kts-law.3dcartstores.com/The-California-Fair-Housing-Encyclopedia_p_9.html
This booklet would be an excellent gift for your landlord clients, property managers and HOA managers.
For more information see:
Field Guide to Fair Housing
http://www.realtor.org/field-guides/field-guide-to-fair-housing
DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.