Civil Rights and Fair Housing

Real Estate Principles of Georgia

Lesson 7: Civil Rights and Fair Housing

145 1 of 42

Introduction

Federal and state laws prohibit discrimination: y based on race, religion, sex, or other characteristics y apply to almost all real estate transactions Particular laws vary in terms of: y what groups they protect, and y what types of activities and transactions they apply to. 146 © Copyright 2006, Rockwell Institute, Inc.

Federal Antidiscrimination Laws Civil Rights Act of 1866 Civil Rights Act of 1866: y prohibits discrimination only on basis of race y applies to any type of real estate transaction: residential or commercial improved or unimproved 146 © Copyright 2006, Rockwell Institute, Inc.

1 Federal Antidiscrimination Laws Civil Rights Act of 1866 Not widely used until after 1968 Supreme Court decision Jones v. Mayer : y Court held act prohibits “all racial discrimination, private or public, in the sale and rental of property.” 146 © Copyright 2006, Rockwell Institute, Inc.

Civil Rights Act of 1866 Remedies

Remedies available under 1866 act include: y injunction (order to stop violation) y actual damages (to compensate plaintiff) y punitive damages (additional amount as a penalty)

Federal Antidiscrimination Laws Civil Rights Act of 1964 Civil Rights Act of 1964 prohibits discrimination: y based on race, color, religion, or national origin y in programs and activities that receive financial assistance from federal government

2 Federal Antidiscrimination Laws Civil Rights Act of 1968 Title VIII of the Civil Rights Act of 1968 is better known as the Fair Housing Act. Applies to sale or lease of: y residential property y vacant land to be used for residential construction

Federal Fair Housing Act Scope of law In residential transactions, Fair Housing Act also prohibits discrimination in: y advertising y lending y brokerage y other services

Federal Fair Housing Act Scope of law Fair Housing Act prohibits discrimination based on:

race national origin color Disability/handicap religion familial status sex

3 Fair Housing Act Exemptions: For sale by owner

1. Doesn’t apply to a single-family home rented or sold by a private individual if: y she owns no more than 3 such homes y no discriminatory advertising used y no real estate broker employed

Fair Housing Act Exemptions: Owner-occupied rental

2. Doesn’t apply to rental of a room or unit in a dwelling with up to four units if: y owner resides in one of the units y no discriminatory advertising used y no real estate broker employed 149 © Copyright 2006, Rockwell Institute, Inc.

Fair Housing Act Exemptions

3. Religious organizations may limit occupancy to members when dealing with their own property.

4 Fair Housing Act Exemptions Fair Housing Act always applies to any transaction involving a real estate agent. y Exemptions aren’t permitted when agent is involved. y Agent may never discriminate. 149 © Copyright 2006, Rockwell Institute, Inc.

Fair Housing Act Discriminatory Actions • Refusal to rent or sell residential property after receiving a good faith offer.

• Refusal to negotiate for the sale or rent of residential property.

• Any other action that would make residential property unavailable.

Fair Housing Act Discriminatory Actions • Discriminating in terms or conditions of sale or rental of residential property.

• Discriminatory advertising that indicates a preference or limitation.

• Representing that property is not available for inspection, rent, or sale when it is in fact available.

5 Fair Housing Act Discriminatory Actions Fair Housing Act also prohibits:

y steering y blockbusting y redlining

Discriminatory Actions Steering Steering: Channeling prospective buyers or tenants to or away from particular neighborhoods based on their race, ethnicity, or another protected characteristic.

Discriminatory Actions Blockbusting Blockbusting: When someone tries to induce homeowners to sell by predicting that: y members of minority groups will be moving into neighborhood y property values and quality of life will suffer as a result

6 Discriminatory Actions Redlining

Redlining: When lender refuses to make mortgage loans in particular neighborhood because of its racial or ethnic composition.

Fair Housing Act Handicap 1988 amendments to Fair Housing Act added handicap and familial status as protected categories.

Handicap Reasonable accommodations Landlord must: make reasonable exceptions to rules for disabled tenants, and allow disabled tenants to make reasonable modifications at their own expense. y Landlord isn’t required to modify property for tenant. y Tenant can be required to restore property to original condition when tenancy ends. 151 © Copyright 2006, Rockwell Institute, Inc.

7 Handicap Wheelchair accessibility Fair Housing Act’s wheelchair access rules apply to new construction of residential buildings with four or more units. y New construction: built since 1988. y Entryways, hallways, kitchens, and bathrooms must be designed to accommodate wheelchairs. y If building has an elevator, units above ground floor must accommodate wheelchairs. 151 © Copyright 2006, Rockwell Institute, Inc.

Fair Housing Act Familial status Familial status refers to parents or guardians who have children under 18 living with them.

Generally illegal to refuse to rent or sell to someone because: y she is pregnant y he or she has children y he or she is about to adopt or gain custody of children 151 © Copyright 2006, Rockwell Institute, Inc.

Familial Status Housing for older persons “Housing for older persons” is exempt from the prohibition against discrimination against families with children.

8 Fair Housing Act Housing for older persons To qualify as housing for older persons, a property must fit one of three categories: 1. Developed under government program to assist the elderly. 2. Intended for and solely occupied by people age 62 and older. 3. Intended for people age 55 and older: y designed to meet their physical or social needs, and y at least 80% of the units are occupied by at least one person 55 years or older. 151 © Copyright 2006, Rockwell Institute, Inc.

Fair Housing Act Enforcement Office of Fair Housing and Equal Opportunity is part of Department of Housing and Urban Development (HUD).

Fair Housing Act Enforcement Person who feels she has been discriminated against in violation of Federal Fair Housing Act may: y file a complaint with Office of Fair Housing and Equal Opportunity, or y file a lawsuit in state or federal court. Complaint must be filed within one year of the discrimination. Lawsuit must be filed within two years. 151 © Copyright 2006, Rockwell Institute, Inc.

9 Enforcement Administrative hearing If complaint filed with HUD, agency investigates and tries to resolve issue between parties.

Enforcement Penalties Possible penalties: y an injunction against discriminatory activity, y affirmative steps to correct a violation, y compensatory and/or punitive damages, and/or y a civil penalty paid to federal government. 152 © Copyright 2006, Rockwell Institute, Inc.

Summary Federal Fair Housing Act Civil Rights Act of 1866 Civil Rights Act of 1964 Fair Housing Act Steering Blockbusting Redlining Handicap Familial status

10 Other Federal Laws Americans with Disabilities Act ADA (1992) is intended to ensure disabled people equal access to all public accommodations. y Disability: any physical or mental impairment that substantially limits one or more major life activities. y Public accommodation: a private entity with facilities open to the public. Examples: real estate offices, banks, stores 153 © Copyright 2006, Rockwell Institute, Inc.

Americans with Disabilities Act Requirements If “readily achievable” in public accommodation: y architectural and communications barriers must be removed y auxiliary aids and services must be provided New commercial construction must be accessible to disabled, unless structurally impractical. 153 © Copyright 2006, Rockwell Institute, Inc.

Georgia Antidiscrimination Laws Georgia has its own Fair Housing Law with provisions mirroring those of the federal Fair Housing Act.

It bars discrimination in housing, if it is based on race, color, religion, sex, handicap, familial status, or national origin.

Georgia’s Fair Housing Law is enforced by the State Commission on Equal Opportunity.

11 Summary Other Federal Laws

Equal Credit Opportunity Act Home Mortgage Disclosure Act Americans with Disabilities Act Disability Public accommodation

Complying with Fair Housing Laws

Violating laws doesn’t require intent to discriminate; even good intentions can lead to problems.

Complying with Fair Housing Laws Working with clients

Real estate agents should never say or imply that presence of persons of a protected class in a neighborhood will: y lower property values, y change the neighborhood’s composition, y create a more dangerous neighborhood, or y cause a decline in the quality of schools.

12 Complying with Fair Housing Laws Working with clients

Watch for signs of discriminatory attitudes to avoid helping others violate antidiscrimination laws.

If sellers aren’t willing to follow the law, decline the listing.

Complying with Fair Housing Laws Discriminatory practices

Certain statements/practices may be construed as discriminatory:

y Advertising property only in neighborhoods where residents are of same background as seller. y Sending property flyer to all neighboring properties except those owned by people of particular race or background. 155 © Copyright 2006, Rockwell Institute, Inc.

Complying with Fair Housing Laws Discriminatory practices

y Wording an ad so that it suggests that recipient can control who buys property (“uphold standards of the community”). y Choosing non-diverse models in display advertising.

13 Complying with Fair Housing Laws Actions that don’t violate laws

y Asking questions or making statements as necessary to accommodate needs of disabled person. y Positive measures to reach out to members of protected class.

Discriminatory Restrictive Covenants This type of covenant still appears in chain of title of some older properties.

Such a covenant does not invalidate deed, although covenant itself is unenforceable.

Summary Complying with Antidiscrimination Laws

Working with clients Advertising properties Non-discriminatory actions Discriminatory restrictive covenants