Fair Housing Laws: Commercial Real Estate's Legal Maze

The Fair Housing Act (FHA) protects tenants and homebuyers from discrimination in most housing situations, including commercial facilities used for housing, such as apartment complexes. The FHA prohibits discrimination by direct housing providers, such as landlords and real estate companies, as well as other entities, such as banks, lending institutions, and insurance companies. While the FHA applies across the United States, certain types of housing are excluded, such as owner-occupied buildings with four or fewer units, single-family homes rented without a broker, religious organizations providing non-commercial housing, and private clubs. Additionally, the Civil Rights Act of 1866 prohibits discrimination based on race in commercial real estate transactions.

Religious organisations and private clubs

However, in very limited circumstances, the Act does exempt housing operated by religious organisations and private clubs that limit occupancy to members. This means that these groups are allowed to discriminate based on criteria such as race, colour, religion, sex, disability, familial status, or national origin when it comes to housing. This exemption applies to all types of housing covered under the FHA, including single-family homes, apartments, condos, and mobile home parks.

It is important to note that this exemption does not give religious organisations and private clubs free rein to discriminate as they wish. The FHA still applies to other aspects of housing, such as mortgage lending and advertising. For example, it is illegal for these groups to discriminate against people based on race, religion, or gender when it comes to mortgage loans or advertising.

Additionally, there may be state-level protections that override this federal exemption. For example, in Florida, there are seven protected classes at the federal level, but the state's FHA is enforced by the Florida Commission on Human Relations (FCHR), which may have additional guidelines and protections in place.

Overall, while religious organisations and private clubs do have some exemptions from the FHA when it comes to housing, they must still comply with the law in other housing-related areas and be mindful of any additional state-level protections.

Senior housing

• Housing provided under state or federal programs specifically designed to assist elderly persons as defined by the program.
• Housing intended for and solely occupied by individuals aged 62 years or older.
• Housing intended and operated for occupancy by individuals aged 55 years or older.

To qualify for the "55 or Older" exemption, the most common of the three, housing facilities or communities must meet several requirements:

• At least 80% of the units must have at least one occupant aged 55 or older.
• The facility or community must publish and adhere to policies demonstrating their intent to operate as housing for this age group.
• The facility or community must comply with HUD's regulatory requirements for age verification of residents.

It is important to note that even with these exemptions, housing facilities or communities for older persons are not exempt from liability for discrimination based on race, color, religion, sex, disability, or national origin.

In addition to federal protections, some states and local jurisdictions offer additional protections for seniors. For example, in Ohio, local fair housing laws in several cities in Cuyahoga County prohibit discrimination based on age.

Fair housing laws also support seniors who wish to "age in place," meaning they want to remain in their current homes as they grow older. To facilitate this, the laws allow for reasonable accommodations and modifications to be made to residences. These can include changes to policies, procedures, or physical spaces to ensure that seniors with disabilities have equal access to housing. Examples of reasonable accommodations include allowing service animals, providing reserved parking, and permitting live-in aides. Reasonable modifications may involve installing grab bars, lowering kitchen cabinets, or making doorways more accessible for wheelchairs.

The Fair Housing Act's provisions for senior housing aim to ensure that older adults have equal opportunities to access safe and suitable housing that meets their unique needs.

Discrimination in mortgage lending

Despite these laws, biases still impact many borrowers. A 2021 study found that borrowers from minority groups were charged interest rates that were nearly 8% higher and were rejected for loans 14% more often than those from privileged groups. This type of discrimination has contributed to the racial wealth gap and has had long-term effects on creating wealth inequalities.

There are three types of lending discrimination: overt discrimination, disparate treatment, and disparate impact. Overt discrimination is blatant and easy to recognize, such as refusing to consider Social Security income for a person with a disability. Disparate treatment involves differences or inconsistencies in treatment based on prohibited factors, such as taking longer to approve minority loan applicants. Disparate impact is when a lender applies a practice uniformly, but it has a discriminatory effect on a protected class and is not justified by business necessity.

If you believe you have been a victim of lending discrimination, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) or the US Office of Fair Housing and Equal Opportunity (FHEO). You can also contact your state attorney general's office to see if the creditor has violated state laws.

Discrimination based on disability

Discrimination on the basis of disability is prohibited by the Fair Housing Act. This applies to both residential and commercial properties used for housing purposes, such as apartment buildings.

The Act protects people from discrimination when buying, renting, or financing a home. It also applies to those seeking housing assistance or engaging in other housing-related activities.

In the context of disability, discrimination includes any acts that single out a person because of their disability. This can include refusing to rent or sell housing, refusing to negotiate, setting different terms or conditions, or making housing unavailable to a person due to their disability.

Building owners may need to make reasonable accommodations to ensure that individuals with disabilities have equal opportunities to access the property and common areas. This could include installing ramps or grab bars, or allowing service animals into the building. It is important to note that building owners are not required to make changes that fundamentally alter the program or create a financial burden.

In addition to the Fair Housing Act, the Americans with Disabilities Act (ADA) of 1990 also prohibits discrimination towards individuals with disabilities. The ADA ensures that businesses provide adequate accessibility and safety provisions for individuals with disabilities.

Compliance with the ADA is crucial, as non-compliance can result in lawsuits, negative publicity, and financial penalties. To avoid potential issues, it is recommended to hire a certified access specialist (CASp) to inspect the property and ensure it meets the necessary standards for disability accessibility.

Discrimination based on sex

The Fair Housing Act covers most types of housing, including private housing, public housing, and housing that receives federal funding. The Act prohibits discrimination in housing based on sex, including gender identity and sexual orientation. This means that it is illegal to take any of the following actions because of a person's sex:

• Refuse to rent or sell housing
• Refuse to negotiate for housing
• Make housing unavailable
• Set different terms, conditions, or privileges for the sale or rental of a dwelling
• Provide different housing services or facilities
• Falsely deny that housing is available for inspection, sale, or rental
• Make, print, or publish any notice, statement, or advertisement that indicates any preference, limitation, or discrimination based on sex
• Impose different sales prices or rental charges
• Use different qualification criteria, applications, or standards for people of a certain sex
• Evict a tenant or their guest because of their sex
• Fail or delay maintenance or repairs
• Limit privileges, services, or facilities
• Discourage the purchase or rental of a dwelling
• Assign a person to a particular building or neighborhood because of their sex
• Persuade homeowners to sell their homes by suggesting that people of a particular sex are moving into the neighborhood
• Refuse to provide or discriminate in the terms or conditions of homeowners insurance because of the sex of the owner or occupants
• Deny access to or membership in any multiple listing service or real estate brokers' organization

In addition, it is illegal to harass or sexually harass individuals because of their sex. This includes demanding sexual favors from tenants or creating a sexually hostile environment.

The Act also provides protections for individuals who identify as LGBTQ+, who face significant levels of discrimination in housing. While there is currently no federal law that consistently protects LGBTQ+ individuals from housing discrimination, the proposed Fair and Equal Housing Act aims to add "sexual orientation" and "gender identity" as protected characteristics under the Fair Housing Act.

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