5.2 Federal Fair Housing Law and Protected Classes

Fair housing is one of the most heavily tested national topics. The Fair Housing Act, enacted as Title VIII of the Civil Rights Act of 1968 and amended in 1974 and 1988, bans discrimination across sales, rentals, advertising, financing, and brokerage services.

The Seven Federal Protected Classes

Memorize these for the national portion:

• Race
• Color
• Religion
• Sex (HUD interprets this to include gender identity and sexual orientation)
• National origin
• Familial status (households with children under 18, and pregnant persons)
• Disability (physical or mental impairment)

Race and color were the original 1968 classes; sex was added in 1974; familial status and disability were added by the 1988 amendments.

Exam trap: Age, marital status, source of income, and sexual orientation may be protected by state or local law, but only the seven above are federal. The national exam tests the federal list.

Prohibited Practices

The Act bans refusing to deal, offering different terms, or making housing unavailable on the basis of a protected class. Three named practices appear constantly on the exam:

A discriminatory request from the customer is not a defense. If a buyer asks to avoid a neighborhood because of its racial makeup, the agent still may not steer. Liability turns on effect, not intent: even a well-meaning agent who limits choices based on a protected class violates the Act.

Advertising Rules

Advertising may not state a preference, limitation, or discrimination based on a protected class, and this includes online listings, social posts, and lead forms. Describe the property, not the ideal occupant.

• Acceptable: "Spacious two-bedroom near transit," "wheelchair-accessible entrance"
• Prohibited: "No children," "adults only," "perfect for young professionals," "Christian home"

Coded phrases that imply a preference ("ideal for singles," "safe, established neighborhood") are red flags even when no protected class is named outright.

Accommodations vs. Modifications

For people with disabilities, distinguish two duties:

• Reasonable accommodation - a change to a rule or policy, usually at the housing provider's expense. Example: allowing a service or assistance animal in a no-pets building, or a reserved accessible parking space.
• Reasonable modification - a physical change to the structure, usually at the tenant's expense in private housing. Example: installing a grab bar or entry ramp.

Exam trap: A landlord cannot charge a pet deposit for a service animal because it is an accommodation, not a pet.

Familial Status and Disability in Practice

Familial status protects households with one or more children under 18, plus pregnant individuals and anyone securing custody of a child. Tested examples of illegal conduct include:

• Refusing to rent because applicants have a newborn
• Steering families to specific buildings or only ground-floor units
• Charging a higher deposit or rent because children will live there
• Setting an unreasonably low occupancy limit aimed at excluding families

Disability protection is broad: it covers physical and mental impairments, recovery from addiction, and HIV status. A housing provider may not ask whether an applicant has a disability or its nature, though it may require proof that a requested accommodation is needed when the disability is not obvious. New multifamily buildings of four or more units (first occupied after March 1991) must also meet design and construction accessibility standards.

Exam trap: A request to keep an emotional-support animal in a no-pets building is a reasonable accommodation, even though such an animal is not a trained service animal.

Narrow Exemptions and Always-Applicable Rules

A few limited federal exemptions exist, but the exam expects you to know they are narrow and that race-based discrimination is never permitted under the Civil Rights Act of 1866. Commonly tested exemptions:

• Owner-occupied buildings of four units or fewer (the "Mrs. Murphy" exemption), when no broker is used and no discriminatory advertising appears
• Single-family homes sold or rented by an owner without a broker and without discriminatory ads (limited to one such sale in a period)
• Housing operated by religious organizations or private clubs for their members
• Qualified senior housing (55+) may lawfully exclude families with children

When a real estate licensee is involved, treat the transaction as fully covered.

Enforcement

The U.S. Department of Housing and Urban Development (HUD) enforces the Act. A complaint must generally be filed with HUD within one year, or a lawsuit filed in federal court within two years. Penalties include fines, damages, and mandatory training. A brokerage may be liable for an agent's violation under a failure-to-supervise theory.

Prohibited Practices to Recognize

The exam describes the conduct rather than naming it, so learn the behaviors:

• Steering - directing buyers toward or away from neighborhoods based on a protected class.
• Blockbusting (panic selling) - inducing owners to sell by claiming people of a certain protected class are moving in.
• Redlining - a lender refusing or pricing loans worse based on the property's neighborhood composition.

Note the distinction between disparate treatment (intentional discrimination) and disparate impact (a neutral policy that disproportionately harms a protected class) - both can violate the Act even without proof of intent in the impact case.