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What Sellers Need To Know About The Fair Housing Act

Hanna Kielar April 25, 2024

If you are selling your beloved home, you might want the next owner to be someone whom you know will enjoy the neighborhood or who will love the pool in the backyard as much as you did. What people sometimes assume are innocent questions can actually be instances of home buying discrimination. Being aware of the Fair Housing Act real estate provisions can help you avoid unintentional discrimination. Here is what you need to know about the FHA.

What Is Covered By The Fair Housing Act?

The Fair Housing Act is a federal law enforced by the U.S. Department of Housing and Urban Development(HUD) that prohibits housing discrimination based on race, color, religion, sex, handicap, familial status or national origin. Additionally, some states have their own laws that might expand the criteria to include age or gender identity, so be sure to find out what might be pertinent to your state. The Fair Housing Act applies to the sale, lease or rental of housing and prohibits anyone from using any form of home purchase discrimination. This can include:

  • Refusing to sell your house to a certain person
  • Imposing different sales prices on different buyers
  • Falsely denying the availability of a house
  • Using any wording in your marketing that indicates a preference or limitation to certain groups
  • Using different criteria for evaluating an offer from a certain person
  • Otherwise discouraging the purchase of your property
Blue house with stone and cement paved driveway.

The FHA website can provide additional information about what constitutes discrimination and how to proceed if a person feels that their inclusion in a protected class somehow negatively influenced a decision.

What Is A Fair Housing Provider?

The definition of a fair housing provider is broad under the FHA and includes anyone who is involved in the selling, renting or leasing of a property. These groups who must ensure they are following the law include:

  • The homeowner
  • Any property owner or manager
  • Lenders, such as mortgage providers
  • Real estate agents
  • Condominium associations

There are a few types of people who are exempt, but these rules apply to landlords and property managers, rather than sellers. One example is a landlord who is renting three or fewer homes without the use of a real estate agent.

How Does The Fair Housing Act Work?

According to the National Fair Housing Alliance (NFHA), housing discrimination complaints are on the rise – up 8% to 31,202 in 2019, the highest since NFHA began producing the annual Fair Housing Trends Report in 1995.

Marketing is one of the areas where it can be easy to inadvertently violate the law. For example, some words or phrase to avoid include “couples,” “bachelor pad” or “seniors” to describe your house, or details like “around the corner from a church” or “family-friendly neighborhood.”

Another area where you might want to proceed with caution is the “love letter” that many potential buyers submit with their offer. It might state that they look forward to celebrating Christmas with their family in the comfortable bonus room, or that they will be moving an elderly aunt into the downstairs master room. If you were to select a buyer based on one of these letters, the others who put in an offer on the house could, by the letter of the law, claim that they were discriminated against because they don’t celebrate Christmas, for example. Likewise, if you selected another buyer, the letter writer could claim that you used the information they provided to exclude their offer.

It may be best not to read the letters so that they don’t sway you to accept one offer over another. Instead, stick with the terms of the offer, such as the price, contingencies, whether they are preapproved and other financially driven aspects. While it would be hard to prove discrimination, it can potentially put you in a risky situation as a gray area that is likely best to avoid so you don’t run afoul of laws protecting buyers of new homes.

How Does The Fair Housing Act Deal With Discrimination?

If a potential buyer believes a seller has violated the FHA, they may file a complaint with the local HUD office or online. Once the complaint has been filed, the agency will investigate and determine if the seller has been negligent.

It’s important to note that in June 2015 the Supreme Court of the United States ruled that discrimination does not have to be intentional to be illegal under the FHA. This means that you could be in violation of the act even if you didn’t mean any harm.

Potential fair housing violation examples include describing your neighbors or the absence or likelihood of crime, even if the buyer is asking these questions. While they might be curious about what the neighbors are like, you can say something general like “I have enjoyed living in the neighborhood,” and suggest they knock on some doors to meet a neighbor or two. Or if they ask about the quality of the schools, you can refer them to the local school district’s website. By pointing them to sources where they can find the information for themselves, you won’t inadvertently say something that could be misconstrued.

Selling your home can be complex, but the more you know, the easier it will be. For more great information on how to proceed with a successful sale, check out the Ultimate Guide on How to Sell a House For Sale By Owner.