Discriminatory Conduct

1: There is a group home for mentally retarded adults next door to a home I have listed for sale. Does this need to be disclosed to prospective purchasers?

A: No. Under the federal and Ohio fair housing laws, you may not discriminate against persons with a handicap. Therefore, just as you wouldn’t volunteer information regarding the racial or ethnic composition of the neighborhood, you should not volunteer information regarding mentally handicapped neighbors.

2: What if the buyer asks about the racial composition of the neighborhood?

A: REALTORS are often faced with questions from potential buyers about the racial composition of a neighborhood. Federal law, however, prohibits attempting to sell, or refusing to sell based on the racial composition and pose risks to a real estate broker or salesperson. These questions may expose the salesperson and broker to liability depending on how they are answered. Such questions should therefore not be answered.

3: What if the buyer requests to be shown houses in a good white (jewish, integrated, black, etc.) neighborhood.

A: REALTORS must often deal with buyers who have stated a preference for a neighborhood having a specific racial, religious or ethnic character. Federal law prohibits a real estate broker from marketing property based on the racial or ethnic composition of the neighborhood where it is located. Therefore, a REALTOR must take care to insure that he does not discourage or encourage a buyer to buy or refuse to buy because of a neighborhood’s racial, ethnic or religious composition.

A suggested response: “Let me identify a number of homes that meet your other specifications; we’ll look at the ones you want to see, and when you’ve seen and weighed everything, you can make a decision that suits you.”

“The kind of home and surrounding amenities that meet your needs can be found in several neighborhoods. I suggest that you examine all such property so you’ll know you’re making an informed choice.”

“I can help you find a great home, but legally I am precluded from choosing your neighbors. Let me show you several that meet all your criteria for a home and then you can make your decision.”

4: What if the buyer asks if the schools are integrated?

A: Many of the suits filed, and cases which have gone to trial, which allege racial steering involve comments by real estate agents about schools. In fact, professional testers often ask questions about the quality of schools in various neighborhoods hoping to get a response that can be used to show that the real estate salesman was attempting to influence the choice of housing by making either critical or laudatory comments about schools depending on the race of the prospective buyer and the racial characteristics of the school population. Thus, the salesman must be sensitive to questions about schools and answer such questions carefully.

Some suggested responses: “Our office does not maintain statistics regarding the racial makeup of the student body in the schools in our market area. If you would like such information, you should contact either the school itself or the school district’s office. Those sources can also tell you which schools will be available to your children, the class size, the basic curriculum and provide the best answers to your questions. Also, you might want to check with some of your potential new neighbors about how they feel about the schools their children attend.”

“Mr. Buyer, the only school I’m really familiar with is the one that my own children attend. Since I don’t have personal experience with the others, I cannot give you complete information you really want and need. Let me refer you to the school district office which can give you information about curriculum, class size, and the names of the schools which service the various neighborhoods in which you are interested.”

5: What if the buyer asks if the neighbors will boycott me if they see me pull up with you?

A: The Fair Housing Act guarantees every person the right to choose housing without limitation based on his race, color sex, religion, national origin, handicap or familial status.

The Act also prohibits anyone from interfering with, coercing or intimidating anyone who is exercising his rights under the Act. This question suggests a situation in which the buyer is concerned about how the neighbors will react to his looking at a home in the neighborhood. The salesperson should ensure that the buyer exercises his rights as he chooses, that no one interferes with the exercise of those rights and that the salesperson does not in any way discourage the prospect from looking at property based on the reaction of the neighbors.

Suggested Responses: “Mr. Buyer, the law protects your right to purchase a home and my right to show you property anywhere you choose to live. My firm has been doing business in this area for some time and the people who live in our service area know that we comply with the law and our REALTOR Code of Ethics. I don’t anticipate any problems.”

6: What if a seller asks me during a listing presentation if my office works with minorities?

A: The federal fair housing laws and the REALTORS Code of Ethics require REALTORS to provide equal professional services to every person without regard to race, sex, religion, national origin, familial status or handicap. Accordingly, a REALTOR may not exclude any class of persons from doing business with his firm based upon race, sex, religion, ethnic origin, familial status or handicap.

Suggested Responses: “My office works with any person who is qualified to purchase property listed with our firm. Our sole objective is to sell property at the highest price in the shortest period of time on terms most favorable to our seller client. Thus, it would be illogical for us to refuse to market our clients’ property to any qualified buyer, regardless of their race, color, sex, religion, or national origin. But, more important, Mr. Jones, if we did use race to exclude buyers, we, and you, would be in violation of the federal fair housing laws. I cannot afford to risk a violation of those laws, and, I am sure you would find that other real estate brokers in our community feel the same way.”

7: What do I say to a seller who says I should not show his house to minorities?

A: Sellers sometimes ask a REALTOR not to show their property to blacks, Hispanics or other minorities. A seller who discriminates in this manner violates the Civil Rights Act of 1968, whether or not he uses a real estate broker. If a real estate broker is utilized to market the property, both the seller and the broker who implements the seller’s discriminatory scheme are in violation of Section 804(d) of Title VIII of the Civil Rights Act of 1968, which makes it unlawful “to represent to any person because of race, color, religion, sex, national origin, familial status or handicap that a dwelling is not available for inspection, sale or rental when such dwelling is in fact so available.”

Suggested Responses: “Most people have fond memories of places where they have lived and want their “old neighborhood” to stay the same. On the other hand, Mr. Jones, you have put your house on the market and I assume you have hired me to sell your house for the highest price and on the most favorable terms. In order to achieve this goal, I must expose your property to as many buyers as possible. Naturally, any increase in the demand for a product will correspondingly increase the price.

“But, perhaps more important, the federal fair housing laws prohibit both you and me from refusing to market your home to any person on the basis of race, color, religion, sex, national origin, familial status or handicap. I cannot afford the risk of liability under these laws, and I doubt you can either.

“Simply put, Mr. Jones, if you insist on excluding certain racial or ethnic groups from opportunities to purchase your home, your listing is no longer profitable for me and I must withdraw as you agent.”

8: What objection do you have to providing racial/religious/ethnic data?

A: A REALTOR can be well advised to maintain information concerning the race, religion, sex, and nationality of prospects and purchasers to assist in the management and administration of his office.  The development of information concerning the racial, religious and ethnic background of prospects can be invaluable in the event of a complaint of steering since such information can be used to refute a charge that the REALTOR has engaged in a “pattern” of discrimination.

On the other hand, providing data concerning the racial, religious and ethnic background of a prospect to persons or organizations outside of the firm without the express written permission of the prospect or without being required to do so by law is fraught with potential legal liability.

In the first place, an unauthorized disclosure of the race, color, religion, sex or national origin can reasonably be viewed as an invasion of privacy if, for example, a person desires not to be identified by his race, religion or nationality. Sometimes there are personal or professional reasons why such identification can do irreparable damage.

In the second place, the broker is very likely to mis-classify the person unless the person classified assists in the process. In most cases assimilation of nationalities and in many cases assimilation of races and races with nationalities make identification a matter of speculation at best and stereotyping at worst. Such mis-classificaiton can, of course, become the basis of liability for the real estate broker if the mis-classification causes injury to the home seeker.

In the third place, if the person whose race, religion or nationality reported by the broker is subsequently harassed or threatened or otherwise treated in a discriminatory manner, the person may well charge the broker with initiating such treatment or aiding and abetting it.

Suggested Responses: (To the Media) “I object to providing information concerning the race, religion and nationality of my customers for three reasons: first, it’s their private business and you should ask them if you want to know; second, I am not at all confident I can provide that information without their assistance and consent; and, third, I am not convinced that the use to be made of the data will not involve me in litigation and expose me to liability.”

(To the Customer) “The community requires me to advise them of your race, religion, nationality and sex. I’d like you to read and sign this statement they have provided me explaining why they want this information and what they intend to do with it. Will you advise me what your race, religion and nationality is?”

(To the Customer) “The (organization) has asked me to provide them with your race, religion, and nationality. If you will authorize me to give them this information and will tell me what your race, religion and nationality is, I will do so. I will not do so without your consent. Perhaps you should review this statement they have provided explaining why they want this information and what they intend to do with it before you make your decision.”

9: A homeowner calls your agent regarding locating a tenant for his home. The owner tells your agent that he has just had new carpeting installed in the home and does not want a tenant with children or pets. Your agent told the owner that they could prohibit pets but that the fair housing laws prevents prohibiting children. The owner told your agent that he would handle the rental on his own because he was told a homeowner can refuse to rent to children. Can an owner in handling the rental of their own home refuse to rent to families with children?

A: No. Ohio’s Fair Housing Law does not contain an exemption for homeowners handling their own rental. The homeowner is prohibited from discriminating against families with children.

10: Is age a protected class under federal or Ohio fair housing law?

A: No. Age is a protected class for employment purposes but not for fair housing.

11: When advertising a property can handicap accessibility features such as a wheelchair ramp be advertised?

A: Yes. For fair housing purposes, you want your ad to describe the property you are marketing not the buyers or tenants you are looking for. If a property has a wheelchair ramp or any accessibility feature the fair housing laws do not prohibit including this feature in your ads for the property.

12: I have a home listed in an area zoned for single family housing. The city zoning regulation includes a provision that no more than five unrelated people can live together. There is an organization interested in buying the property to set up a group home for recovering alcoholics and drug addicts. There would be 10 to 12 recovering addicts in the group home. If the zoning regulation was challenged, how likely is it that the city would prevail?

A: The Fair Housing Laws prohibit discrimination against the handicapped which includes recovering drug and alcohol addicts. The Fair Housing Laws do permit local authorities to establish reasonable occupancy standards, such as limiting the number of occupants based on the number of bedrooms or size of the unit. However, some cities and towns have tried to restrict group homes in single family neighborhoods by limiting the number of unrelated people who can live together. Historically, the courts have not upheld these zoning regulations. The courts have found the regulations to discriminate against the handicapped and to go beyond the cities ability to set reasonable occupancy standards because they not only limit the number of occupants but also the type of occupants.

13: An agent has found prospective tenants for a home the brokerage manages. Before completing the rental transaction the agent calls the property owners to notify them that a tenant has been found. During the conversation the owners ask if the prospective tenants are black. The prospective tenants are black. Could the agent be found in violation of the Fair Housing Laws if they answer yes and the owners refuse to rent to those tenants?

A: Yes. The owner, the agent and the agent’s brokerage could be found in violation of the Fair Housing Laws. The agent should not participate in the discrimination by responding to the owners question. The agent should remind the owners that federal and state fair housing laws prohibit both the agent and the owners from refusing to rent to any person on the basis of race, color, religion, sex, national origin, familial status or handicap, that the agent will not discriminate against any of the protected classes and that if the owners insist on excluding tenants based on race that the brokerage will no longer manage their property.

14: In the area in which I list properties there is one school district which is a very desirable school district. Is there a fair housing problem if I establish a policy of only advertising the school district for my listings that are in the desirable school district and not advertise the school district on my other listings?

A: There is a potential steering issue. Steering is the channeling of buyers or tenants to a particular area on the basis of race, color, religion, national origin or other protected class. This practice is prohibited by the Fair Housing Laws. If you want to advertise the desirable school district, the cautious approach would be to advertise the school district on all of your listings. It is best to advertise the school district on all your listings or none of them.

15: A listing agent of a property has learned that the seller’s son, who lives in the property has AIDS. Must he disclose this fact to prospective purchasers?

A: Although this fact may be material to some buyers, both HUD and the Ohio Civil Rights Commission have taken the position that AIDS is a handicap. Under federal and state fair housing laws, a REALTOR may not discriminate against persons with a handicap. Therefore, it should not be disclosed that the person living in a property has or did have AIDS. Moreover, ORC Section 3701.244 provides that no person can be held liable for failing to disclose that information to a third person, unless such a disclosure is expressly required by law. No such disclosure is currently required by law. Therefore, a REALTOR cannot be held liable for failing to disclose such information.