Fair Housing and the Code of Ethics

by Michele McCaskill | Mar 22, 2023 | Canopy Realtor® Association

 

One of the primary purposes of the Fair Housing Act (Title VIII of the Civil Rights Act of 1968),  is to protect a buyer or renter from discrimination based on such things as race, color, national origin, religion, sex, familial status and disability. The FHA makes it a violation of federal law to discriminate in housing-related transactions. Article 10 of the Realtor® Code of Ethics (Code) reinforces the FHA and illustrates the Realtors® commitment to fair housing.

It reads:

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. (Amended 1/14)

REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. (Amended 1/14)

 

A Realtor® could be found in violation of Article 10 of the Code if the Realtor®, when involved in the sale or lease of a residence, intends to discriminate against a person or group of persons based on any of the protected classes outlined above. Sometimes, even an unintentional act could be construed as a violation of the Code. Realtors® should be careful to offer equal professional services to every client and not indicate any preferences or limitations when communicating with clients and customers, and when marketing a property or group of properties.

Specifically, when advertising properties, make sure that your marketing does not express a preference that a particular buyer be of a specific racial, ethnic or age group, or of a certain familial status. For example, when adding remarks to the Matrix system, you should avoid phrases that imply that a particular home is perfect for “empty nesters,” “single individuals,” “families with small children” or “married couples.”

 

A property should only be marketed towards age-specific buyers when a listing is in a 55 and Older community. Canopy MLS staff may require agents who mark listings as “55 and Older” to provide a 55 and Older Statement of Qualification to verify that the community is qualified senior housing. Providing the statement is generally required when a 55 and Older community is new or when there is a question about whether the 55 and Older status is still in effect. 

 

Canopy MLS staff monitor the MLS system for potential fair-housing violations. When certain words and phrases are flagged as a potential violation, staff removes the offending language and contacts the Realtor®. Additionally, members can report potential violations by clicking the “report data error” icon available on the Agent Full display of the listing in the MLS system, or by sending an email to [email protected].

 

Staff encourages Realtors® to use words that describe the specific property and not for whom it might be best suited. In addition, refrain from using phrases that describe a neighborhood that could be construed as discriminating against a group of people. For example, avoid describing a neighborhood as “kid friendly” or “primarily Hispanic.” Further, using words like “exclusive,” “private” or “integrated” are also discouraged. These words imply a preference for one group over another and hint at that community’s makeup. Try also to avoid pointing out known racial, ethnic or religious landmarks that may be nearby. Those landmarks are easily identified by potential buyers so it is not necessary to mention the homes proximity to those land marks in your advertising.

 

Realtors® should also be careful not to volunteer information on the racial, religious or ethnic composition of a neighborhood or engage in any activity which may result in panic selling. However, a Realtor® is free to provide factual demographical information to clients if that information is needed to assist with the transaction, and as long as the information is obtained from a reliable and impartial source. The Canopy MLS Realist system provides demographic reports that may be used. Remember, it is what you do with that information and how you present the information that could be considered discrimination and a violation of the FHA and the Code.

 

Case Study

 

REALTOR® A listed a property in a new subdivision. At the instruction of his client, Seller X, REALTOR® A did not enter the listing in the MLS, did not place a “For Sale” sign on the property and did not advertise the property online. Seller X had told REALTOR® A that he wanted the sale handled quietly, with the new purchasers being people who would “fit into the neighborhood — people with the same socioeconomic background” as the other residents of the subdivision.

 

Based on his conversation with Seller X, REALTOR® A’s only marketing effort was mailing a letter to the other residents of the subdivision, inviting them “. . . to play a part in the decision of who your next neighbor will be. If you know of someone who you would like to live in the neighborhood, please let them know of the availability of this home, or call me and I will be happy to contact them and arrange a private showing.”

 

REALTOR® A’s marketing strategy came to the attention of REALTOR® B, whose mother lived in the subdivision. REALTOR® B filed a complaint charging REALTOR® A with a violation of Article 10 of the Code of Ethics.

 

At the hearing, REALTOR® B told the Hearing Panel of receiving a copy of the marketing letter from his mother, who had recently moved to the subdivision. REALTOR® B advised the panel that he had checked the MLS for information on the property, had driven past the house to look for a “For Sale” sign and had searched online for any information on the property. Finding nothing, REALTOR® B concluded that REALTOR® A’s marketing strategy was to limit access to the property to individuals preselected by the current residents. “In my mind,” said REALTOR® B, “this could only mean one thing. REALTOR® A was deliberately discriminating against home buyers from other areas, or those with different backgrounds, who would never have the opportunity to learn about the house’s availability. Obviously, REALTOR® A was directing all of his marketing energies into finding purchasers who would not disrupt the ethnic and economic character of the neighborhood.”

 

REALTOR® A defended his actions by advising the panel that he was acting on Seller X’s instructions. Seller X appeared as a witness for REALTOR® A and confirmed this fact, adding that he and the other residents of his block had an informal agreement that they would try to find “suitable” purchasers for their homes if they ever decided to sell. Seller X felt that by broadening the marketing campaign to include all residents of the subdivision he had increased the chances of finding such potential purchasers.

 

The Hearing Panel found REALTOR® A in violation of Article 10 of the Code of Ethics. In their decision, the panel advised REALTOR® A that no instruction from a client could absolve a REALTOR® from the obligation to market properties without regard to race, color, religion, sex, disability, familial status, country of national origin, sexual orientation, or gender identity, as expressed in Article 10. There was no doubt, in the panel’s opinion, that the exclusive use of “Choose Your Neighbor” letters to market the property was designed to circumvent the requirements of Article 10.