How to “Steer” Clear of Fair Housing Act Violations

steering wheel

One of the keys to help prevent Fair Housing Act lawsuits is to avoid “steering”. The Federal Fair Housing Act prohibits discrimination in housing sales, rentals, and financing, based on race, color, national origin, religion, sex, family make up (if there are children), and disability. You should note that some states have enacted laws that protect other groups of people as well.

Steering, or trying to influence somebody toward or away from a particular property or neighborhood based on one of the protected characteristics, is illegal under the Fair Housing Act. So how does this affect your real estate business?

Two areas where your risk increases is in marketing materials and how you respond to client questions or requests.

What to Look for in Your Marketing Materials

You may be violating the Fair Housing Act without realizing it if you use certain language in your marketing of properties. You should avoid discriminatory language like “singles only” or “no children”. Don’t use language referencing the ethnic or racial makeup of a neighborhood. In addition, referencing proximity to a particular church, temple, or mosque could be problematic.

How to Respond to Client Questions and Requests

Trying to steer an African-American family away from a home in a largely white neighborhood that meets their criteria is a problem. But what if somebody says, “I want to live in a Hispanic neighborhood”? Limiting the homes you show based on race, ethnicity, proximity to a temple or church, or in a “good” school district can get you in trouble.

So how do you respond to these kinds of requests from clients, to allow you to meet their needs and meet the requirements of the law? Ask them to define the parameters of the search. So if they want to be in a neighborhood with a specific religious, racial, age, or ethnic mix, ask them to tell you where they’d like to look—within certain streets or zip codes for example.

Similarly, don’t steer people with disabilities or families with children toward specific housing unless it meets a requirement the client has given you such as: “I need a ground floor building or one with an elevator” or “We want to avoid houses on route 5 because of the traffic.”

In addition, be careful of questions like:

  • Is this a safe neighborhood?
  • Are the schools good?
  • Is there diversity in the school system?

Encourage clients to check out school ratings, crime statistics, and other data themselves rather than interpret it for them. You can use disclosure notifications with clients, so they receive written notice of their responsibility to research these areas.

Understanding some of the subtler violations of the steering provision in the Fair Housing Act will help you avoid problems. If you do get a complaint of a Fair Housing Act violation, you’ll need legal advice.  CRES Real Estate E&O + ClaimPrevent® makes a real estate legal advice team available to our clients, 7 days a week. If you receive a complaint or have a legal concern, we want to hear about it, even if it hasn’t become a formal claim yet. We’ll work to help you avoid a claim altogether.

What wording or practice have you changed to abide by the Fair Housing Act?

This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.

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