What does the FHA require?
The FHA makes it makes it unlawful to discriminate in the sale, rental, and financing of housing, and in the provision of brokerage and appraisal services, because of race, color, religion, sex, handicap, familial status, or national origin. See 42 U.S.C. § 3601 to 3631. Additionally, 42 U.S.C. § 3604(c) of the FHA makes it unlawful to make, print, or publish, or cause to be made, printed, or published, any notice, statement, or advertisement, with respect to the sale or rental of a dwelling, that indicates any preference, limitation, or discrimination because of race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.
Are there any exceptions to the Fair Housing Act?
Yes, there are five notable exceptions.
1. Owner-occupied housing with four or fewer units
If a landlord lives in one of the units and rents out the others (not to exceed three other units), those units are exempt from the FHA.
2. Private members-only clubs
Some private-member clubs, that operate for a non-commercial purpose, and provide lodging as one of their primary purposes, may limit the rental or occupancy to its members.
3. Housing operated by religious organizations
Religious organizations may limit the sale, rental, or occupancy of dwellings that it owns or operates to persons of the same religion, unless membership in such religion is restricted because of race, color, or national origin.
4. Housing for older persons
Housing intended for, and solely occupied by people who are 62+ years old; housing intended for persons 55+ years old; and 80% of units are occupied by least one person who is 55+ years old; and the housing facility complies with certain other requirements.
5. Single family homes that are sold or rented without the use of a broker
This applies if the owner doesn’t own more than three single-family homes at one time.
A word about the scope and intent of exceptions to the FHA
Under Exception 1, if an owner occupies one unit and rents out the others (not exceeding three other units), then the housing is exempt from the FHA. See 42 U.S.C. §3603 (b) (1). That means that the owner can discriminate against a prospective tenant based on any of the protected classes or refuse to provide a reasonable accommodation to a renter with a disability.
The same is true for Exception 5. The FHA does not apply to single-family homes sold without using a broker. So, owners of these homes can discriminate against prospective tenants based on any of the protected classes and refuse to rent the property or provide reasonable accommodation to a person with a disability.
Advertising is NOT Exempt
There are no exceptions to the advertising provision of the FHA, which stipulates that you cannot make, print, or publish a discriminatory statement. This is the case even though Exceptions 1–5 permit certain kinds of discrimination.
Why are exceptions to the FHA permitted?
These exceptions are generally designed to balance the protection of individuals from housing discrimination with other important societal interests, including:
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Individual property rights
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Reduced regulatory burden
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First amendment consideration (particularly with respect to the religious exception)
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Associational freedom, as in the case of private clubs
If you have questions about how Fair Housing law applies to your real estate practice, consult your brokerage manager or an attorney.
To read this article in the March/April 2024 digital issue of The Minnesota Realtor® magazine, click here.