5.2 Federal Fair Housing Law and Protected Classes

5.2 Federal Fair Housing Law and Protected Classes

The federal Fair Housing Act (Title VIII of the Civil Rights Act of 1968, amended 1974 and 1988) makes it illegal to discriminate in the sale, rental, financing, or advertising of housing based on membership in a protected class. The earlier Civil Rights Act of 1866 separately bars all racial discrimination in property transactions with no exceptions — a point the Supreme Court confirmed in Jones v. Mayer (1968).

The seven federal protected classes

A reliable memory aid is "R-R-N-S-C-H-F" or the phrase covering: Race, Color, Religion, National origin, Sex, Disability (handicap), and Familial status.

Note: "sex" was added in 1974, while disability and familial status were the 1988 amendments. Many states and localities add classes such as marital status, age, source of income, or sexual orientation, but the exam's national portion tests the seven federal classes.

Prohibited practices

These are tested heavily because they have specific names:

• Steering — directing buyers toward or away from neighborhoods based on a protected class (e.g., "you'd be more comfortable over here").
• Blockbusting (panic selling) — inducing owners to sell by suggesting a protected group is moving in, often to profit on the turnover.
• Redlining — refusing or worsening loan/insurance terms based on the racial or ethnic makeup of a neighborhood.
• Discriminatory advertising — using words or images that indicate a preference (e.g., "perfect for a young Christian couple," "no kids").

Intent does not matter: a practice that has a disparate impact on a protected class can violate the Act even without discriminatory motive.

Disability: accommodations vs. modifications

Two distinct duties trip up test-takers:

• Reasonable accommodation — a change in rules, policies, or services (e.g., waiving a no-pets policy for an assistance animal, or assigning a reserved accessible parking space). The housing provider generally bears the cost.
• Reasonable modification — a physical change to the unit (e.g., installing a grab bar or ramp). In private housing the tenant usually pays, and the landlord may require restoration on move-out for interior changes.

Assistance/service animals are not pets — no-pet rules and pet deposits cannot be applied to them. New multifamily buildings (4+ units, first occupied after March 1991) must also meet accessibility design standards.

Exemptions (narrow — and never for advertising or race)

A few transactions are exempt from parts of the 1968 Act:

• An owner-occupied building of four or fewer units (the "Mrs. Murphy" exemption).
• A single-family home sold or rented by the owner without a broker and without discriminatory advertising (limited to one sale in any 24-month period if the owner doesn't reside there).
• Housing operated by religious organizations or private clubs for their members.

Critical exam point: even when an exemption applies, discriminatory advertising is never allowed, and race discrimination is never exempt (the 1866 Act). If a licensee is involved, exemptions generally evaporate.

Enforcement

Complaints go to HUD, generally within one year of the violation; a civil lawsuit may be filed within two years. Penalties escalate with repeat offenses and can include damages and civil penalties.

Prohibited Practices the Exam Names

Beyond refusing to rent or sell, the Fair Housing Act bans specific tactics. Know each by name:

• Steering - directing buyers toward or away from neighborhoods based on a protected class.
• Blockbusting (panic selling) - inducing owners to sell by suggesting a protected group is moving in.
• Redlining - a lender or insurer denying or pricing loans/insurance based on the racial or ethnic makeup of an area.
• Discriminatory advertising - using words that indicate a preference ("adult building," "perfect for a young Christian couple," "no kids").

Disparate Impact and Exemptions

Intent is irrelevant: a neutral policy that produces a disparate impact on a protected class can violate the Act. A narrow exemption exists for an owner-occupied building of four units or fewer and for single-family homes sold/rented without a broker and without discriminatory advertising - but the race prohibition (under the Civil Rights Act of 1866) has no exemptions and a licensee can never participate in a discriminatory transaction.

Disability and Familial-Status Specifics

A landlord must allow reasonable accommodations (a policy change, such as waiving a no-pet rule for a service or assistance animal - with no pet deposit) and permit tenant-paid reasonable modifications. New multifamily buildings (4+ units, first occupied after March 1991) must meet accessibility design standards. Familial status protects households with children under 18; only qualified 55-and-older housing may lawfully exclude them.

Enforcement, the 1866 Act, and the Jones Holding

Fair-housing enforcement runs through HUD: an aggrieved person may file a HUD complaint generally within one year of the violation, or file a civil lawsuit within two years. HUD investigates, may conciliate, and can refer cases for administrative hearing or to the Department of Justice for a pattern-and-practice suit. Penalties escalate with repeat offenses and can include actual damages, civil penalties, and injunctive relief.

Layered on top of the 1968 Fair Housing Act is the Civil Rights Act of 1866, which bars all racial discrimination in property transactions with no exemptions, as confirmed by Jones v. Mayer (1968). So even the narrow exemptions (owner-occupied 4-or-fewer-unit buildings, FSBO without a broker or discriminatory ads) never authorize race discrimination. A licensee may not participate in any discriminatory transaction even when the owner claims an exemption - a frequent exam trap that tests whether you know the 1866 Act overrides the FHA exemptions for race.