Working With Buyers: What to Know About the Fair Housing Act

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In residential real estate, there’s plenty of things you shouldn’t disclose to a client. However, some of these matters are not only ethically concerning but legally enforced. The Fair Housing Act (FHA) of 1968 expanded the rights of many underserved Americans—allowing them to participate in the real estate market.

So, what is the FHA? Who does it protect? Are there exemptions to the rules?

Read on to discover or refresh your knowledge of the history, usage, exemptions, and legal implications of discriminatory practices in real estate.

What Is the Fair Housing Act?

During the Civil Rights Movement, the FHA played an integral role in providing fair housing opportunities for seven protected classes, including race, color, origin, religion, sex, familial status, and disability. Many African American and Hispanic soldiers fought in the Vietnam War while their families battled on the home front to rent, purchase, or receive housing assistance in certain residential areas.

The Civil Rights Act was passed in 1964, and the FHA followed in 1968—extending protections and equality for protected classes. The bill included many provisions to limit discrimination in the rental, sale, and financing of residential property. Since its inception, the FHA has been amended to include protections for children and persons with a disability.

What Does the FHA Protect?

For each protected class, the FHA protects the right to rent, sell, negotiate, participate and set reasonable terms and conditions. It polices disqualification, targeted advertisements, evictions, harassment, or use of any other form of discrimination.

The FHA makes it unlawful for homeowners, landlords, and mortgage lenders to disadvantage any protected person in the residential housing market.

Who Does the FHA Protect?

The bill was born out of a need to end housing discrimination, but it’s imperative to understand it only applies to residential housing. Agents, homeowners, landlords, and renters cannot discriminate against protected classes, including mentioning them to prospective homebuyers or answering related questions. In other cases, such as persons with disabilities, landlords must allow accommodations and modifications (more on this later). 

For example, if a buyer asks if the neighborhood is “child-friendly,” a real estate agent wouldn’t be able to answer this question. However, if the buyer wants to know if there are any schools nearby, this is perfectly acceptable. 

Some states expand on the FHA; California provides the Fair Employment and Housing Act (FEHA), which offers additional protections for other protected classes.

The Protected Classes

There are seven federally protected classes included in the FHA:

  1. Disability
  2. Familial Status
  3. Race 
  4. Color 
  5. Religion
  6. National Origin
  7. Sex

Most of these are self-explanatory; however, two protected classes are commonly misunderstood.


As with the other protected classes, it’s illegal to discriminate against people with disabilities. The landlord (in most cases) must be willing to make accommodations and modifications for disabled people. Residential owners and landlords aren’t obligated to pay for these changes to the property. 

E.g. A landlord must allow his tenant to build a handicap-accessible ramp to the front door.

Familial Status

This protection outlines children as a protected class. If someone is tailoring their homebuying search around avoiding or including children in the neighborhood, it goes against the FHA. 

Exemptions From FHA Rules

There are a few notable exceptions to the FHA:

  • Single-family homes that are sold or rented without the use of a real estate broker.
  • Religious organizations that own and operate housing.
  • Private clubs and communities that legally discriminate based on limit occupancy to members (e.g. 55+ communities). 
  • Owner-occupied buildings with no more than four units.

Exemptions Must Uphold the Rules

Ground rules for the exemption are as follows:

For 55+ communities (private clubs), the community must follow two rules—

1. At least 80% of the neighborhood units must have one occupant who is 55 years or older.

2. The facility or community must publish its intent to operate as “55 or older housing.”

3. The facility or community must comply with the United States Department of Housing and Urban Development (HUD) requirements for residential age verification. 

For Sale By Owner (FSBO) single-family home sales or rentals must not use a licensed real estate agent to facilitate the transaction.

For property owners seeking exemption, they must live on the property and own less than four units.


A few common misconceptions on the FHA protections:

1. Age 

Age is not a protected class, unlike children. If a landlord decided they didn’t want to rent to somebody in their 20s, they could tell them straight out.  

2. Marital Status 

Gender is a protected class, but marital status is not.

3. Commercial Transactions

All FHA federal rules apply to residential properties. The same restrictions do not apply to commercial transactions.


If a property owner is found guilty of FHA violations, plaintiffs will have the opportunity to recoup applicable fees and be given awards such as lawyers, relocation, housing use, and payment for psychological and mental distress. Additional civil penalties can be as high as $16,000 for the first violation, $37,500 if there’s a second violation within five years and $65,000 for the third if two or more violations occurred within seven years.

The Bottom Line

The Fair Housing Act (FHA) is a comprehensive piece of legislation that protects many classes from discrimination during the sale, purchase, advertisement, financing, and other residential real estate aspects. 

As a real estate agent, it’s your legal responsibility to uphold federal and state laws concerning the FHA. If your customers or clients start asking questions you’re not legally able to respond to, make the ethical choice and inform them you’re not allowed to elaborate.

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