Need to Know Fair Housing Laws For Residents and Landlords

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In 1959, Colorado became the first state to pass any kind of fair housing legislation. Nine years later the federal government passed its own fair housing legislation, known as the “Fair Housing Act.” Fair housing laws prevent discrimination on the basis of race, color, religion, age, national origin, disability, familial status, and sexual orientation. Failure to follow fair housing laws can find someone in serious legal troubles. Violators may find themselves with fines up to $10,000—or more depending on how many violations apply. The purpose of these laws is to provide everyone in the United States with equal access to the housing of their choice. 

That’s not all the Fair Housing Act covers though. Both landlords and residents should be aware of what the law entails.. At Henderson Management & Real Estate we often encounter people unaware of the details outlined by the Fair Housing Act. Let’s answer a few common questions we receive.

Note: In this blog post, we refer to both Colorado Fair Housing Laws and Federal Fair Housing Laws. This is because both acts are very similar and practically identical.

What Type of Properties Fall under the Fair Housing Act?

Both the Federal and Colorado Fair Housing Act apply to any property for sale, lease, rent, or other transfer of ownership. If you are selling or renting your home with a realty company/broker, you must comply with the laws established by the Fair Housing Act.

There are exceptions to the rule. The Fair Housing Act excludes certain types of properties from these laws. These properties are:

  • Owner-occupied buildings with four (4) or fewer units
  • Single-family homes rented without a broker
  • Religious organizations
  • Privates clubs
  • Senior housing

There are many reasons why these types of properties may recognize a distinction without legal repercussions. A senior housing complex may discriminate against potential tenants based on their age. They may require residents to meet a certain age requirement, such that only those 55 or older may own or rent property designated for seniors. Discrimination by a private club might entail stipulations that only club members can rent or use club property. With each property type there are certain situations that allow them to legally discriminate against a certain group(s) of people. 

While there are exceptions, these properties still must comply with the Fair Housing Acts’ ban on issuing discriminatory statements, notices or advertising.

What Qualifies an Act as Discrimination?

The refusal to sell, rent, or negotiate with a person(s) of a protected class violates both the Federal and Colorado Fair Housing Act. If someone wants to purchase, rent, or negotiate a price for a property—and is turned away because of their race, religion, national origin, sex, sexual orientation, familial status, color, or disability—the seller would be in violation of the Fair Housing Act. The seller or landlord would be subject to penalties as a result.

Acts of discrimination aren’t only subject to the act of buying, selling, or negotiating. Before a real estate transaction can begin—and throughout the process—there are measures to prevent illegal discrimination. If one can prove discriminatory intent took place during a real estate transaction, the offending party can find themselves in a difficult legal situation. Below are some examples of discrimination.

Steering: The Discouragement of Seeking Homes in Certain Communities

When a realtor/broker shows someone properties for rent or sale, the agent cannot steer the client. Steering refers to the exclusion of certain communities or dwellings on the basis of illegal discrimination (e.g. race, orientation, or religion).

An example of steering would be a property agent showing a Black individual or family predominantly Black neighborhoods, and excluding predominantly White neighborhoods. Steering extends beyond race and could discriminate against other factors. Steering might appear as discouraging a buyer from certain neighborhoods based on political affiliation, religion, or sexual orientation. 

Those looking for homes to rent or purchase must be shown any potential homes or neighborhoods of interest. There will be extenuating circumstances, such as those “must-have” lists or budget constraints. The important thing, however, is that an agent cannot exclude a property or neighborhood on the basis of a protected class.

Interference, Coercion, & Intimidation: The Trifecta of Illegality

Attempting to interfere in the decision-making process of someone in a protected class when purchasing a property is a violation of the Fair Housing Act. Violations can also take the form of coercion (bribes of any kind) or attempts to intimidate (non-violently or violently). Any act perpetrated with the intent to prevent someone from purchasing/renting a property based on their race, religion, or other protected categories can result in legal action.

Discriminatory Advertising

Along with interference and steering, discriminatory advertising violates the Fair Housing Act. Discriminatory advertising comprises advertising either directly, or indirectly, with the intent to discriminate against a person of a protected class. A real estate listing that indicates “No children” would be against the Fair Housing Act since it protects familial status.

Blockbusting: AKA Panic Peddling

Blockbusting refers to the attempt of scaring a person, family, or group of people into moving out of a neighborhood. This often takes the form of fear-mongering because a protected class is moving in. This discrimination tactic generally occurs in diverse neighborhoods or neighborhoods becoming more diverse. 

Examples of blockbusting would be a realtor/broker stating the crime rate will increase if a protected class moves in. Another case could be using fear of decreasing property values to encourage a community to sell.

Remember, people of a protected class aren’t limited to race or color. Blockbusting could occur if an agent uses language or alludes to certain faiths, orientations, familial statuses, or political affiliations. 

Redlining

This offense typically occurs during the lending process. Redlining is when a bank or lender refuses a property loan to someone of a protected class. It may also include subjection to stricter loan conditions when applying for a loan, especially when compared to those NOT in a protected class.

Can Anyone Other Than the Seller or Landlord Be Guilty of Violating Fair Housing Laws?

Yes, 100%. Anyone involved in the real estate transaction process could violate Federal or Colorado Fair Housing Laws. If any discrimination against a member of a protected class is proven, the offending party is subject to penalties. This could include realtors, brokers, bankers, mortgage lenders, home inspectors—even the title company! A banker refusing to do business with an agent if they work with someone of a protected class is at risk of prosecution. A mortgage lender assembling a mortgage with unequal terms in relation to someone of a non-protected class could also find themselves in court. 

Access to fair housing and freedom from discrimination is a right that should be available to all. The Fair Housing Act works to protect people who may experience higher levels of discrimination than those who don’t. This Act ensures that everybody can find a place to call home equally and without interference.