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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

 

Three Lines of Defense Against Risk

Keeping Risks Under Control

Controlling Transaction Risks

Agency Disclosure

Avoiding Antitrust Risks

Minimizing Liability from Contracts

Fair Housing Risks

Controlling Personnel Risks

Communications Policies to Minimize Risks

Insuring Against Risks

More Resources: Controlling Business Risks

Code of Ethics: Controlling Business Risks		   Fair Housing: Stories From In the Trenches

Bruce Aydt, senior vice president and general counsel with Prudential Alliance, REALTORS®, in St. Louis, and a REALTOR®Magazine columnist, shares advice on how to handle some common fair housing situations.

Q: What should I do if I'm representing sellers who express an intent to discriminate in violation of the Fair Housing Act —someone who refuses to sell to an African American, for example?

Aydt: This is not the time to be diplomatic. Remind the sellers that they pledged in the listing contract not to discriminate. Review the law, and explain that you cannot honor their request. If the sellers are unwilling to abide by fair housing laws, terminate the relationship and confirm your decision in a letter to the sellers and with a copy in your transaction file.

If the sellers express their feelings in front of a potential buyer, follow the same course of action, plus take an additional step of sending the buyer a letter confirming your commitment to equal housing and indicating that you terminated your relationship with the sellers.

Q: What about buyer discrimination? Is that illegal?

Aydt: The Fair Housing Act doesn't expressly forbid discrimination by buyers or renters who prefer certain locations. However, the U.S. Department of Housing and Urban Development has stated that buyers' representatives could be held liable for violating the Fair Housing Act if they followed the discriminatory instructions of their clients.

Q: Are there any particularly troublesome compliance issues for brokers and sales associates?

Aydt: Some brokers aren't aware of the two additional protected classes that were added in 1989 — people with disabilities and families with children. There's a need for more education in dealing fairly with these clients and customers.

Q: Is it a good idea to establish a relationship with local fair housing agencies, or is it best to keep them at arm's length?

Aydt: It makes sense to establish a good relationship with fair housing groups in your area. Many of them have strong educational programs that you can tap into for your training needs. My company invited representatives from a fair housing group to attend a sales associates meeting to explain what the group does and how we can work with it. Your openness to these organizations signals a commitment to fair housing.


More Fair Housing Tips:

  • Remind the sellers of their fair housing laws and get them to agree in writing to comply with the fair housing obligation as part of the listing agreement.
  • The appropriate response to a discriminatory statement by a client depends in part on whether the discriminatory behavior was intentional, whether anyone was harmed by the behavior, and the extent to which others are aware of the behavior. If a seller makes a remark to you alone, you can first try to educate the seller about the implications of fair housing. If the remark is made in front of clients in a protected class, more serious measures, such as sending a letter of apology to the buyers and possibly resigning the account may be necessary.
  • When buyers ask to be shown properties in a particular ethnic or religious community, turn the request around and ask them what geographic areas they're interested in. Explain that you'll present them with housing opportunities in a few different areas. Direct them to public sources of demographic information, and ask them to find out what areas fit their criteria. Remind them that the Fair Housing Act prohibits you from showing them properties based on discriminatory preferences.


Fair Housing Compliance Checklist >