Fair Housing and ADA Study Notes

CHAPTER TWO: Fair Housing and ADA

Section 1: Federal Fair Housing Act

  • The Federal Fair Housing Act is a cornerstone of real estate law in the United States designed to prevent discrimination in housing.

    • Understanding its origins and applications helps clarify its impact on real estate professionals.

Historical Development

  • The origins date back to 1866 with the Civil Rights Act, which made it illegal to discriminate in housing based on race.

    • Although enforcement was limited initially, it established the principle that all citizens should have equal access to housing.

  • The Civil Rights Act of 1968 (Title VIII) significantly broadened protections against discrimination based on:

    • Color

    • Religion

    • National origin

    • This law was a direct response to the inequality that was prevalent at the time and came shortly after the assassination of Dr. Martin Luther King Jr.

  • The Fair Housing Amendments Act of 1988 added:

    • Sex

    • Disability

    • Familial status (the presence of children under 18 in a household).

    • These additions recognized various discrimination forms, expanding protections to often overlooked groups.

Protected Classes

  • Under federal law, the following seven groups are protected:

    • Race

    • Color

    • Religion

    • Sex

    • Disability

    • National origin

    • Familial status

  • Housing providers cannot treat individuals unfairly based on these characteristics in all housing-related activities:

    • Selling

    • Renting

    • Advertising

    • Lending

Prohibited Discriminatory Practices

  • Discrimination can take various forms, including:

    • Refusing to sell, rent, or negotiate with someone.

    • Offering different terms or conditions to different people.

    • Advertising that expresses a preference or limitation.

    • Lying about the availability of a property.

    • Steering clients toward or away from specific neighborhoods.

    • Blockbusting: encouraging owners to sell by suggesting that certain demographics are moving in.

    • Redlining: denying financial services based on neighborhood demographics rather than borrower creditworthiness.

Enforcement

  • Individuals believing they’ve experienced discrimination may:

    • File a complaint with the Department of Housing and Urban Development (HUD) within one year of the alleged violation.

    • Alternatively, they can file a lawsuit in federal court within two years.

  • HUD investigates complaints, and if evidence supports the claim, the case could proceed to a hearing or court.

  • Possible penalties for violating fair housing laws:

    • Fines

    • Compensation to victims

    • Court orders to change policies or behaviors

Exemptions

  • Notable exemptions from the Fair Housing Act:

    • Sale or rental of a single-family home by the owner without the use of an agent and no discriminatory advertising.

    • Rentals in buildings with four or fewer units, where the owner resides in one unit.

    • Housing operated by religious organizations or private clubs not open to the public.

  • Exception: Race is not an exception and cannot serve as a legal basis for discrimination under any condition.

Section 2: Colorado Fair Housing

  • Colorado has a rich history in fair housing laws, leading the nation by passing anti-discrimination legislation in 1959, nearly a decade before the federal Fair Housing Act.

Unique History and Coverage

  • Initial protections included:

    • Race

    • Creed

    • Color

    • National origin

    • Ancestry

    • These protections were broader than those found in federal law at that time.

  • Further expansions over decades added protections for:

    • Sex in 1969

    • Marital status and religion in 1973

    • Physical disability in 1977

    • Sexual orientation in 2008

  • Overall, Colorado law actively ensures equal access to housing, whether renting or buying.

Additional Protected Classes

  • Colorado now protects groups beyond the federal seven:

    • Creed: Includes deeply held moral or philosophical beliefs.

    • Ancestry: Protects against discrimination based on heritage or familial lineage.

    • Marital Status: Includes single, married, separated, divorced, and widowed individuals.

    • Sexual Orientation: Protection for gay, lesbian, bisexual, heterosexual individuals, including gender identity and expression.

    • Military Status: Covers individuals based on service in the armed forces, applicable to veterans and active-duty personnel.

    • Race (Expanded Definition): Includes traits historically associated with race such as hair texture and protective hairstyles like braids or Afros.

Practices Explicitly Prohibited in Colorado

  • While many discriminatory practices are illegal federally, Colorado specifies further:

    • Honoring discriminatory covenants is illegal regardless of their historical context.

    • Deliberate housing segregation by protected class is illegal.

    • Discriminatory inquiries or maintaining discriminatory records is a violation.

    • Retaliation against employees reporting or complying with the law is prohibited.

    • Charging fees for assistance animals like service or support animals is illegal.

Coverage Differences

  • Significant differences between Colorado and federal law include:

    • Colorado law applies to both residential and commercial properties, while federal fair housing laws apply only to residential real estate.

    • Colorado has fewer exemptions than federal law; it only allows exemptions for housing for older persons from familial status requirements.

  • The state also has broader enforcement capabilities:

    • Administrative law judges and courts can levy fines for any violation in Colorado, not limited to patterns or practices.

Section 3: Local Ordinances

  • Local governments in Colorado may add protections to fair housing laws.

  • Local ordinances cannot diminish rights offered by federal and state law but can expand them to meet community needs.

Additional Protected Classes by Community

  • Specific communities may protect classes beyond federal and state law. Examples include:

    • Aspen, Crested Butte, Telluride: Age is included as a protected class except as exempted by senior housing laws.

    • Boulder: Expands protections based on:

    • Gender variance

    • Genetic characteristics

    • Immigration status

    • Pregnancy

    • Parenthood

    • Source of income (protecting against discrimination based on non-traditional rent payment sources).

Enforcement and Overlap

  • Federal and state laws set the baseline for protections while local ordinances can extend protections but not limit them.

  • Local enforcement may be undertaken by local housing authorities or human rights commissions, in addition to state and federal agencies.

Section 4: Enforcement Mechanisms

  • Understanding fair housing laws entails knowing how to enforce them through established processes.

HUD Complaint Process

  • Individuals can file a complaint with HUD if they feel discriminated against in housing.

    • The complaint process is administrative rather than judicial, designed to be accessible and free for the complainant.

    • Complaints must be filed within one year of the alleged violation.

  • HUD investigates, gathers evidence, and may resolve complaints through conciliation.

    • Remedies may include stopping the discriminatory practice, providing access to denied housing, or compensating for damages.

Court Process

  • Alternatively, individuals may pursue a civil lawsuit in state or federal court within two years of the discrimination.

    • Court remedies can include punitive damages and injunctive relief (orders to compel or prevent actions).

    • Courts may award damages for emotional harm, financial loss, or missed opportunities.

Section 5: Americans with Disabilities Act (ADA)

  • The ADA, enacted in 1990, prohibits discrimination against individuals with disabilities across public life areas, including housing.

Purpose and Scope

  • In real estate, the ADA ensures equal access to services and facilities, applying to:

    • Public buildings like libraries and municipal buildings

    • Brokerage offices

    • Real estate services

Key Provisions

  • Under the ADA, businesses must make reasonable accommodations for individuals with disabilities, for example:

    • Installing ramps

    • Lowering counters

    • Providing accessible parking

    • Offering auxiliary aids like interpreters

  • Accommodations must be readily achievable, considering the business size and resources.

  • New constructions and major renovations must comply with ADA standards, ensuring accessibility.

Support Animals

  • The ADA has specific provisions for service animals, dictating:

    • Service animals cannot be prohibited in public places, even under “no pets” policies.

    • Only two questions can be asked regarding service animals.

    • Landlords may not charge fees for service animals, as these are considered necessary aids, not pets.

Section 6: Antitrust Laws in Real Estate

  • Antitrust laws promote competition and prevent market manipulation in real estate.

Overview of Key Federal Laws

  • Sherman Antitrust Act (1890): Prohibits agreements that restrain trade, including collusion on pricing.

  • Clayton Antitrust Act (1914): Targets practices leading to reduced competition over time and protects union rights.

Prohibited Antitrust Practices in Real Estate

  • Real estate professionals must avoid market-manipulating behaviors, such as:

    • Price Fixing: Collaborating to set commission rates instead of negotiating independently.

    • Example: Two brokerages agreeing to set all commissions at 6 percent.

    • Group Boycotting: Refusal to do business with certain brokerages or agents.

    • Example: A group stopping cooperation with a discount brokerage.

    • Market Allocation: Dividing territories or clients, limiting competition.

    • Example: One firm handling only rural listings.

    • Tie-in Agreements: Conditioning the purchase of one service on buying another.

    • Example: A seller must agree to buy through the same firm to list their property.

Market-Manipulating Discriminatory Practices

  • Discriminatory practices can also violate antitrust principles, such as:

    • Redlining: Lenders refuse loans or charge higher rates based solely on race or neighborhood demographics.

    • Steering: Guiding buyers based on race or religion, limiting choices.

    • Example: Only showing families of one demographic homes in a specific neighborhood.

    • Blockbusting: Scaring homeowners into selling by suggesting demographic changes will lower property values.

    • Example: Suggesting to homeowners that they sell quickly due to new demographics moving in.

Consequences of Violation

  • Penalties for antitrust violations can include:

    • Criminal charges and potential prison sentences for serious violations.

    • Civil penalties like fines, damages, and injunctions against illegal actions.

    • License suspension or revocation for involved real estate agents.

  • Brokerage owners are liable for their agents' illegal conduct if they fail to enforce compliance.

  • Violations do not require signed agreements; any coordinated behavior can trigger enforcement action.

Conclusion

  • This chapter addressed legal protections in real estate, focusing on:

    • The Federal Fair Housing Act and its prohibitions on discrimination.

    • Colorado's enhanced protections and broader application.

    • Local ordinances that may provide additional protections.

    • The Americans with Disabilities Act and its requirements for access and assistance animals.

    • Antitrust laws that prevent market manipulation for fair competition.