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Some Real Estate and Mortgage Laws and Regulations
Fair Housing
Americans with Disabilities Act Terms And Concepts
Blockbusting Federal Civil Rights Act 1866
Federal Civil Rights Act 1866 Federal Fair Housing Act -1968 (Title VIII)
Federal Fair Housing Act 1968 Protected Classes
Protected Class Prohibited Classes
Redlining Prohibited Practices
Steering New Construction
Discrimination in Financing Discrimination in Providing
Brokerage Services
Discrimination in Appraisal Reports
Enforcement of the Fair Housing Act of 1866
The area of Fair Housing
is extremely sensitive and in a continuing state of be utilized for general references only. For specific status and legal impact of any of the items
covered, legal advice is recommended from personal, business, local REALTORS® boards.
Federal Civil Rights Act - 1866
The Federal civil Rights Act of 1866 made all discrimination based on race illegal. The
detailed language of the Act , as it relates to real estate , states specifically that:
“All citizens of the United States shall have the same right, in every State and Territory, as
is enjoyed by white citizens thereof to inherit, purchase , lease, sell, hold and convey real and personal property..”
In a relatively modern case, a judgment by the United States Supreme Court on June 17,
1968, reinforced and clarified the 1866 law by holding in a case known as Jones vs. Mayor that “all racial discrimination, private as well as public, in the sale or rental of property” is prohibited.
In any area of racial discrimination, although these current federal and state laws may offer an exemption. the Federal Civil Rights Act of 1866 does apply, due to the overall
violation of discrimination based on race. There are no exemptions under the 1866 Federal Civil Rights Act.
Federal Fair Housing Act - 1968 (Title VIII)
The current federal legislation used to regulate discrimination in housing is Title VIII of
the Fair Housing Act of 1968. The law went far beyond the Civil Rights Act of 1866 which covered discrimination based solely on race. The Fair Housing Amendment Act
of 1989, substantially revised the Federal Fair Housing Law, and these amendments.
Protected Classes
The Fair Housing Act of 1968 prohibits discrimination based on race, color, religion, national origin or sex. The March 12, 1989 amendment expands the protected class to
include the handicapped and families with children. (“Handicapped” is defined in the amendment to include any person who has a physical or mental impairment which
substantially limits one or more major life activities, a record of having such a impairment or being regarded as having such an impairment.)
Prohibited Practices
The Fair Housing Act of 1968 prohibits the following practices:
1. Refusal to sell, rent or otherwise deal with any person
2. Discrimination against any person in establishing terms or conditions for the sale or rented of housing
3. Discrimination in any advertising for the sale or rental of a dwelling
4. Denying that housing is available when it is
5. Panic Selling- attempting to influence any individual to sell or rent with threats that
persons of a particular protected class status are entering the neighborhood.
6. Channeling- showing members of a protected class property in neighborhoods
made up predominantly of the same minority background while not showing comparable properties in other neighborhoods.
New Construction
New Residential Construction, for March 13, 1991 occupancy, of four-family or larger must be handicapped-accessible, including:
1. Hallway and doorway design
2. Lowered light switches and thermostats
3. Raised electrical outlets
4. Bathrooms an Kitchen design
(These design requirements apply to ground-floor units and upper floors of buildings
with elevators.)
Discrimination in Financing
It is illegal for any bank or other lending institution to vary the terms and conditions of a
loan because of race ( discrimination) only on the credit issue. For example, a bank may not require a larger down payment or higher interest rate because of the applicants race.
Redlining
In this illegal practice, a lending institution decides to exclude a geographic section of a city or an entire city for and lending activity. The name “redlining
” comes about from the thought that the lending institution had drawn a red line around that area and declared it off limits. This practice often resulted in intended or “de facto” discrimination,
in that poorer communities with high minority populations were often targets of such redlining.
Discrimination Providing Brokerage Services
It is illegal to deny access or vary terms and conditions for access to any multiple listing
service, brokers service or any other facility related to the sale or rental of housing.
Discrimination in Appraisal Reports
It is illegal for an appraiser to assign a value to a piece of property because of the impact
on the area of any of the protected classes. Thus, an appraiser cannot state that a downward adjustment of $10,000 is being made because the house is in a minority neighborhood.
Enforcement of the Fair Housing Act of 1866
A violation of the Federal Fair Housing Act may be reported through three separate channels:
1. Department of Housing and Urban Development (HUD), Washington, DC
2. Department of Housing and Urban Development (HUD), Regional Office gender
3. United States District Court
If a complaint is taken to US District Court, the court may issue an in junction or restraining order, award damages and assess fines as follows:
1) $10,000- First Offense
2) $25,000-Second Offense within five years
3) $50,000-Third Offense within seven years
(Note: These civil penalties are available under HUD’s administrative processing; different
relief is available if a court action is elected.
The law also provides for criminal prosecution and penalties for anyone
who attempts to coerce, intimidate , threaten or interfere with a person in the exercise of his rights under the law.
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