What Is the Fair Housing Act?

Ben Luthi has been writing about personal finance since 2013, helping people understand how to make the most of credit card rewards and make smart financial decisions. He has written for NerdWallet, Student Loan Hero, U.S. News & World Report, and Bankrate, among others.

The Fair Housing Act is a federal law that prohibits lenders, sellers, landlords, and agents from discriminating against buyers and tenants based on race, color, religion, sexual orientation, nationality, disability, or family status.

Definition and Example of the Fair Housing Act

The Fair Housing Act is a law enacted in 1968 and has been updated several times since its inception. The law is enforced by the U.S. Department of Housing and Urban Development (HUD).

The Fair Housing Act prohibits lenders, landlords, sellers, and agents from discriminating against homebuyers and tenants on account of specific characteristics, including race, color, religion, sexual orientation, nationality, disability, or family status. For example, thanks to the Fair Housing Act, it is illegal to refuse to rent a home to someone because they practice a different religion.

Individual states and local governments can add to the law, providing more protections, but they can't take away from it. According to the Policy Surveillance Program from Temple University's Beasley School of Law, 49 states and the District of Columbia have adopted additional protections.

Note

Examples of additional protections in certain states include ancestry, gender identity, source of income, military status, and pregnancy.

• Alternate name: Title VIII of Civil Rights Act of 1968

How Does the Fair Housing Act Work?

Under the Fair Housing Act, property owners cannot discriminate against people in protected classes. They cannot refuse to provide reasonable accommodation to people who need it, such as people with disabilities. A reasonable accommodation is a change to the policies and practices of a property that will allow an occupant to use and enjoy it.

Nor can the property owner prevent a tenant from making a reasonable modification, at the tenant's expense, that will allow them to use and enjoy the property. To be reasonable, the changes must not cause harm or be an undue burden (financially or administratively) to the housing provider.

Enforcing the Fair Housing Act

Because the Fair Housing Act is a federal law, it's enforced by HUD. If you believe you've been a victim of illegal housing discrimination, you can choose to file a lawsuit in state or federal court, or you can file a complaint directly with the HUD.

If you file a complaint with the federal agency and it finds there's reasonable cause to believe your rights were violated under the act, it will prepare charges of discrimination. You'll then have 30 days to decide whether to have the charge tried in a HUD administrative court or a federal court.

If you proceed with the former, you'll be represented by HUD attorneys. This process typically goes more quickly than a federal trial with a judge or jury, but you're only eligible for compensatory damages—punitive damages won't be awarded. With a federal trial, you'll be represented by attorneys from the U.S. Department of Justice (DOJ), and you could receive both compensatory and punitive damages from the defendant.

Note

The Fair Housing Act can be difficult to enforce because many forms of discrimination aren't overt and, therefore, cannot be documented. However, if you have documentation of discrimination, such as recordings or written records, contact an attorney or local fair housing agency to understand your rights and next steps. When a formal complaint is filed, HUD will investigate the allegation.

If HUD finds a pattern or practice of discrimination or the defendant has discriminated against a group of people to the point that it's an issue of general public importance, it may refer the matter to the DOJ, which may directly file a lawsuit against a defendant on behalf of the victims.

Penalties for Violating the Fair Housing Act

Civil penalties for violating the Act range from $16,000 for a first offense to $65,000 if there have been two or more violations during the previous seven years. If the case is tried in federal district court and the plaintiff wins, the defendant may have to pay actual, punitive, and compensatory damages as well as legal fees.

Types of Discrimination

If you're not sure what counts as discrimination under the Fair Housing Act, here are some examples:

• A seller refuses to work with a prospective buyer because of their race or color, or because they don't fit the demographics of the neighborhood.
• A landlord makes an apartment available but tells a tenant it's been taken when they find out the candidate is a member of the LGBTQ community, only to tell others that it's still available.
• A mortgage lender charges a higher interest rate because the borrower's name appears to be from another nationality.
• A condominium complex doesn't comply with accessibility requirements, such that a prospective tenant who uses a wheelchair won't be able to access the units or parking.
• A landlord refuses to rent to a single woman with children.
• A real estate agent steers a prospective homebuyer to a different locale when they find out the buyer's religion doesn't match the predominant one in the area.

What It Means for Your Family

The Fair Housing Act is designed to help protect certain classes of people who may experience discrimination when trying to buy or rent a place to live. Unfortunately, though, discrimination still occurs, and it's not always obvious enough to document and prove.

If you're concerned about a landlord, lender, seller, or agent violating your rights, try to keep all communication in writing and document your conversations. This way, you can refer back to these documents to prove the discrimination, if needed.

If you believe your rights have been violated, don't hesitate to contact your local fair housing agency or an attorney to determine the next steps you should follow.

Key Takeaways

• The Fair Housing Act prohibits landlords, lenders, sellers, and agents from discriminating against prospective homebuyers and tenants based on race, color, religion, sexual orientation, nationality, disability, or family status.
• Many states have adopted additional protected classes on top of those detailed in the Fair Housing Act, but they cannot take away from the Act's provisions.
• If you're concerned about discrimination from a landlord, lender, seller, or real estate agent, plan communications in a way that makes it possible for you to retain records.
• If your rights have been violated according to the Fair Housing Act, you can pursue legal action against the perpetrator.