TIGAR Legal Connect

Fair Housing Primer

Mr. Edwin Estes, Jr.
TIGAR Attorney

Attorney at Law
Richardson & Harman, PC

One would hope after years of legislation and litigation, Fair Housing would not be a reoccurring area of concern for real estate agents, but it is.   Both the California Department of Real Estate and Housing and Urban Development report continuing violations of federal and state fair housing laws.   Having two sets of laws can be confusing, what may be permitted under Federal law, can be illegal under state law.   For simplicity sake, I am going to merge both Federal and State laws to create a simple and straight forward approach on what is not permitted for real estate agents practicing in California.

First, we need to identify where it is illegal to discriminate.   Simply put, you cannot discriminate against someone based on a protected class.   In California, protected classes are: race, color, creed, national origin, religion, sex, age, disability, familial/marital status, sexual orientation, gender identification (cross dressers) and genetic makeup (this primarily concerns insurance companies who might discriminate against someone who may have a genetic predisposition for a certain disease).   There are some exceptions, for example: senior communities may restrict by age under special Federal guidelines.   Typically homeowner associations and property management companies are quick to explain the occupancy conditions so you can pass the information to your clients.   In addition, roommates typically do not fall under fair housing laws making it legal to show a preference on gender.   It is not illegal to discriminate against people with low credit scores, or low income, because neither of these fall into a protected class.   My favorite lawsuit was against a landlord by a prospective tenant who was denied an apartment because the applicant was a lawyer.   The court ruled in favor of the landlord because occupation is not a protected class!

Second, the intent of the law is that everyone has the right to live wherever they want, assuming they can afford it.   Discrimination comes in three basic forms: Redlining, Blockbusting and Steering.

Redlining is a residential lender’s practice of either not making loans in a certain area or if loans are made, they are done at a higher interest rate or with increased fees.   The area “redlined” (I guess in years past someone circled an area on a map with a red pen) was defined by the make up in the area by protected class, typically race.

Blockbusting, sometimes known as panic selling, is where a real estate agent encourages property owners to sell out of fears that property values will drop because someone of a protected class has moved into the neighborhood.

Steering is directing someone to a certain neighborhood based on a protected class.   It does not matter if the agent’s intent is to assist the wishes of the buyer.   For example, if a Hungarian buyer asks an agent to show him a Hungarian neighborhood because he does not speak English well and wishes to communicate with his neighbors…that is the same as a white supremacist asking an agent to show him neighborhoods where there are no minorities.   You cannot show properties based on a protected class.   However, if a city has named a neighborhood after a nationality (for example, Chinatown), then you may treat it as any other political subdivision like a city or school district and comply with a buyer’s request to limit your showings to that area.

Keep in mind that people can elect to live wherever they want, so it is not illegal for a buyer to ask you to show them Hungarian neighborhoods, it is just illegal for you to comply.   As licensed real estate professionals, we have been charged with insuring that neighborhoods do not remain or become segregated.   If we comply with showing requests based on a protected class, we are helping keep areas segregated, which violates both the law and public policy.   Again, our job is to see that everyone has the opportunity to live wherever they can afford.  

Still have questions about the law?   Additional information awaits you on the CAR Website: www.car.org or you may send them to TIGAR and I will answer them in our next newsletter.

Edwin Estes has been an attorney and REALTOR for over 27 years; he currently serves as general counsel to The Inland Gateway Association of REALTORS.   This article is for information and education purposes only and should not be considered legal advice.   If you desire legal advice, you should seek counsel from your own attorney.