Fair Housing Issues
Enforcement Misconceptions and Misperceptions
At the mention of enforcement of fair housing laws, most licensees think "testers." Yet, testers come into play only infrequently in enforcement actions. The GREC has never used them. Some other law enforcement agencies do use "testers." They do so most commonly when they have probable cause to believe that an owner or manager has engaged in practices that may violate federal fair housing laws. When agencies use "testing" under appropriate guidelines, the courts have repeatedly upheld its use as a valid enforcement mechanism.
"Testing" operations that federal courts have approved usually involve the use of two customers who present the agent with generally identical financial capabilities and housing needs. However, one customer is a member of a protected class (for example, a minority race or ethnic group), and the other is from a majority class. Both customers have received special training from the agency using them. For example, an African-American couple inquires about a licensee's listing of a property for sale or for rent followed shortly thereafter by (or preceded by) a white couple with similar qualifications and needs. The "test" is to determine whether either couple receives different treatment not permitted by law. While not always the case, one or both of the "testers" may actually be in the market to buy or to rent.
Consider this actual case. A licensee said he knew he had been the subject of a fair housing "test." When asked to describe what happened, he gave the following account. A minority couple had stopped at his office as a result of seeing his sign on a listing. The couple asked to see it. As he normally did, he began a brief qualifying session of the customer's needs. He said he quickly realized that the customer's family size (four children) meant that the listing (a two bedroom house) would not meet their needs. He told them so and suggested that they might want to look at two other listings he had within a mile or two of the property they had seen. After further brief discussion, the couple said they would return when they had more time. They left and did not contact him later. He said he could not understand why they "tested" him and did not want to do business with him, especially since he had other listings that would meet their needs better and in similar neighborhoods.
When asked had any other couple with four children asked to see the listed property within a week before or after this minority couple, he said "No." Since "testers" usually come in similar pairs, he was probably not being tested.
But what about the customers' perceptions of his actions? His qualifying process and questions appeared reasonable and non-discriminatory (he used the same ones with all his potential customers). Nevertheless, in this case that process may have caused the customers not to pursue doing business with him.
The customers may have seen his suggestion that they see listings other than the one about which they inquired as an attempt to steer them away from what they wanted to see. Because of their life experiences, his normal qualifying practice may have appeared to them as an attempt to avoid doing business with them (even though that was not his intent). Showing them the property about which they inquired and then moving to other listings if they did not find it acceptable would have both (1) met his obligation to that seller to expose the property and (2) let the customer arrive at the same conclusion about their needs as he had without making them feel that he was trying to steer them away from the property they liked or wanted.
Even when "testing" is not involved, misconceptions cause harm as a recent case before the Commission demonstrates. In that case a licensee's racial bias and her choice to act on a presumption that she made about a customer led to the loss of her license. The licensee told a caller inquiring about a listed property that the caller "might not want to live there." When the caller asked why, the licensee said because it was a racially mixed area. The caller filed a complaint with the Commission. The licensee had presumed that the caller did not want to live in a "racially mixed" neighborhood. The testimony of the caller, the licensee, and other licensees lead the State Administrative Law Judge (1) to conclude that the licensee's actions violated the fair housing provisions of the license law and (2) to revoke her license. The Commission affirmed that decision.
Advertising also produces its share of misconceptions and misperceptions about fair housing laws. In recent years, the courts found major national newspapers in violation of fair housing laws because of advertisements they printed, but did not write. As a result many newspapers and fair housing agencies have published lists of words and phrases that advertisers should not use or must use with caution. Many licensees reject such lists because they see them as mandating "politically correct" language.
Yet, such lists of words and phrases have helped refocus licensees' attention on what they are selling instead of to whom they are selling it. The term "starter home" is usually not on such lists. However, it demonstrates the point of the importance of describing the property, not the buyer or tenant. Describing a house as a "starter home" in an effort to attract young buyers ignores the fact that such a property can also fit the needs of any small family young, middle-aged, or senior citizen. Thus, as a rule of thumb licensees can avoid having an advertisement that violates fair housing laws by describing the property they are selling rather than the possible buyer.
How can licensees avoid violations of fair housing laws? Consider the following options:
- In addition to the "rule of thumb" of "always describe the property not the buyer," whenever possible have your advertisements read by persons in the protected classes in order to see if they note any offensive language.
- Review the lists of words and phrases that may violate fair housing laws produced by government agencies and major newspapers (visit GAR's web site at www.garealtor.com to review a list developed by GAR and the agency that enforces Georgia's fair housing law, the Georgia Commission on Equal Opportunity).
- Have your firm's supervisory personnel review your qualifying processes (whether you are an unlicensed management employee or a licensed affiliates) in order to avoid unintended discrimination.
- Participate in a plan of continuing education on fair housing for both licensed affiliates and unlicensed management employees. [Larger groups of licensees such as local Boards of REALTORS can support fair housing efforts by attracting outside educators to present programs. The Commission has found particularly effective the fair housing training program presented by the Association of Real Estate License Law Officials (visit their web site at www.arello.org ). The Georgia Commission on Equal Opportunity (404-656-1736 or 1-800-473-OPEN) offers courses at no charge that licensees may take to meet continuing education requirements.]
Make "testing" unnecessary and unused. Remember that clients and customers must make the decisions about where they will live. The licensee's job is only to help them to make their decisions a reality.
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Answering Fair Housing Questions
Sometimes clients or customers ask sales associates to supply information about the racial, ethnic, religious, or family composition of neighborhoods. How should sales associates respond?
With great care.
Such questions do not necessarily indicate an intent by the questioner to discriminate. Consider two examples. First, an elderly couple asks a sales associate whether there are small children living in a condominium development. Federal law allows discrimination if the development is intended for, and solely occupied by, persons 62 years of age or older. Second, a customer or client has made racial, ethnic, or religious comments or jokes in the presence of a sales associate and asks about the racial, ethnic, or religious composition of the neighborhood. Such a customer or client's question may indicate an intention to discriminate based on those grounds. If a licensee answers either of these questions (and certainly the second one), the licensee's doing so may result in a violation of the fair housing laws.
Thus, licensees should take great care in how they handle such questions. Some licensees feel that they should answer such questions by "telling the t ruth." That approach involves at least two pitfalls. First, what is the truth? Rumor is not truth. What may have been true yesterday, or last week, or last month, may no longer be true today.
"Telling the truth" works well on the playground or in the courts. On the playground, others can and will immediately dispute a version of "the truth." In the courts, independent authority figures can choose among disputed versions of the truth in light of their experience and wisdom. In a real estate transaction, when a customer or client asks about neighborhood composition, neither other versions of"the truth" nor independent authority figures are usually present.
Second, even with a "truthful" answer, the sales associate may have violated (or caused a violation) of the fair housing laws if the response has the result of discrimination. The issue is not what the sales associate intends, but what happens. The fact that a person unintentionally breaks an arm does not remove the pain and suffering caused by the broken arm.
Perhaps the safest approach to such questions is to explain the requirements of the law and its effect on the actions of both you and your clients or customers. You may state simply that state and federal laws do not allow you to sell property on such grounds. Therefore, you do not gather such information to convey to customers or clients. In addition, you may want to protect the clients or customers who ask such questions by informing them that if they make a decision to sell, buy, lease, rent or exchange property based on discriminatory practices against protected groups, such an action may violate fair housing laws and subject them to substantial penalties.
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The information contained in this article is believed to be current and accurate. The GREC staff reviews the contents periodically and updates it when appropriate. If you have questions or comments about this article, you may contact us at firstname.lastname@example.org . Last reviewed August, 2006.