Principles of California Real Estate
Lesson 14:
Civil Rights and
Fair Housing
© 2010 Rockwell Publishing
Introduction
Federal and state laws prohibit discrimination:
 based on race, religion, sex, and other
characteristics
 applies to most real estate transactions
Laws vary in:
 groups protected
 activities and transactions covered
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Federal Antidiscrimination Laws
Civil Rights Act of 1866
Civil Rights Act of 1866:
 prohibits discrimination on
basis of race or color
 applies to all types of real estate
transactions:
 residential or commercial
 improved or unimproved
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Federal Antidiscrimination Laws
Civil Rights Act of 1866
Act was passed right after Civil War, but
widely ignored until 1968 Supreme Court
decision Jones v. Mayer:
 Court held that act prohibits “all racial
discrimination, private or public, in sale
and rental of property.”
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Federal Antidiscrimination Laws
Civil Rights Act of 1968
Title VIII of Civil Rights Act of 1968 is known
as federal Fair Housing Act.
 Does not apply to nonresidential
transactions (such as sale of commercial
or industrial properties).
 Applies to sale or lease of:
 residential property
 vacant land to be used for residential
construction
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Fair Housing Act
Protected classes
Fair Housing Act prohibits discrimination
based on:
 race
 color
 religion
 sex
 national origin
 disability
 familial status
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Fair Housing Act
Scope of law
In residential transactions, Fair Housing Act
prohibits discrimination in the following
activities:
 advertising (including real estate ads)
 lending
 brokerage (broker asked to violate act
should decline the listing)
 other services
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Fair Housing Act
Real estate licensees
Fair Housing Act always applies to any
transaction involving real estate agent.
 Exemptions aren’t permitted when agent
is involved.
 Agent may never discriminate.
CA fair housing laws are stricter and offer
even fewer exemptions.
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Fair Housing Act
Exemptions: For sale by owner
Law doesn’t apply to single-family home
rented or sold by its owner if:
 owner owns no more than 3 such homes
 no real estate broker is employed
 no discriminatory advertising used
If owner isn’t most recent occupant, she may
use this exemption only once every 24
months.
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Fair Housing Act
Exemptions: Residential rental
Law doesn’t apply to rental of room or unit in
dwelling with up to four units if:
 owner resides in one of the units
 no real estate broker employed
 no discriminatory advertising used
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Fair Housing Act
Exemptions


Religious organizations may limit
occupancy to members when dealing
with their own property, so long as
membership isn’t restricted based on
race, color, or national origin.
Lodgings belonging to private clubs may
give preference to their own members, if
the lodgings are not open to the general
public.
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Fair Housing Act
Prohibited actions

Refusal to rent or sell residential property
after receiving good faith offer.

Refusal to negotiate for sale or rental of
residential property.

Any other action that would make
residential property unavailable.
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Fair Housing Act
Prohibited actions

Discriminating in terms or conditions of
sale or rental of residential property.

Discriminatory advertising that indicates a
preference or limitation.

Representing that property is not available
for inspection, rent, or sale when it is in fact
available.

Using discriminatory loan criteria.
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Fair Housing Act
Prohibited actions
Federal Fair Housing Act also prohibits:
 blockbusting
 steering
 redlining
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Prohibited Actions
Blockbusting
Blockbusting: When someone tries to induce
homeowners to sell by predicting that:
 members of minority groups will be
moving into neighborhood
 property values and quality of life will
suffer as a result
Also known as panic selling.
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Prohibited Actions
Steering
Steering: Channeling prospective buyers
or tenants to or away from particular
neighborhoods based on their race, ethnicity,
or other protected characteristic.
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Prohibited Actions
Steering
No affirmative duty to show non-minority
buyers houses in minority neighborhoods if
they don’t request it.
 If non-minority buyers ask to be shown
houses in minority neighborhoods, agent
must comply.
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Prohibited Actions
Redlining
Redlining: When lender refuses to make
mortgage loans in particular neighborhood
because of its racial or ethnic composition.
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Fair Housing Act
Disability
1988 amendments to Fair Housing Act
added disability and familial status as
protected categories.
Disability: Physical and mental impairments
that substantially limit one or more major life
activities, including HIV/AIDS, mental illness,
and alcoholism.
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Disability
Reasonable accommodations
Under law, landlord must:
 make reasonable exceptions to rules for
disabled tenants, and
 allow disabled tenants to make reasonable
modifications at their own expense.
Landlord isn’t required to modify property for
tenant, and tenant can be required to restore
property to original condition when tenancy ends.
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Fair Housing Act
Familial status
Familial status refers to adults who have, or
will have, children under 18 living with them.
It’s generally illegal to refuse to rent or sell to
someone because:
 she is pregnant
 he/she has children
 he/she is about to adopt or gain custody
of children
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Fair Housing Act
Enforcement
Discrimination complaints may be pursued:
 with HUD’s Office of Fair Housing and
Equal Opportunity
 via lawsuit in state or federal court
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Fair Housing Act
Enforcement
HUD complaint must be filed within 1 year
of discrimination and lawsuit must be filed
within 2 years.
If a case is found to involve “pattern or
practice,” U.S. Attorney General may
file federal lawsuit.
 HUD may also refer complaints to
state for enforcement, as laws are
similar.

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Enforcement
Administrative hearing
If no conciliation agreement is reached
between parties, and neither party decides to
have case heard in court, an administrative
hearing will be held.
 In hearing, HUD attorneys act on behalf
of complainant, and administrative law
judge will decide the case.
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Enforcement
Penalties
If discrimination is found, administrative law
judge or court might order:
 injunction against discriminatory activity
 affirmative steps to correct violation
 compensatory and/or punitive damages,
including attorney’s fees
 civil penalty paid to federal government
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Federal Antidiscrimination Laws
Equal Credit Opportunity Act
ECOA applies to all consumer credit:
credit used for personal, family, or
household purposes (e.g. residential
mortgage loans)
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Federal Antidiscrimination Laws
Equal Credit Opportunity Act
Prohibits lenders from discriminating against
credit applicants on basis of:
 race
 color
 religion
 national origin
 sex
 marital status
 age
 receipt of public assistance
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Federal Antidiscrimination Laws
Americans with Disabilities Act
ADA makes it illegal to discriminate
against persons with disabilities in places
of public accommodation.
 Public accommodations include real
estate offices, stores, law offices, etc.
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Federal Antidiscrimination Laws
Americans with Disabilities Act
The ADA seeks to protect rights of
disabled to access places of public
accommodation by requiring removal of
architectural and communication barriers.
 Accessibility features must be added
if “readily achievable.” Example:
adding wheelchair ramp.
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Summary
Federal Antidiscrimination Laws
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Civil Rights Act of 1866
Civil Rights Act of 1968
Fair Housing Act
Steering
Blockbusting
Redlining
Familial status
Equal Credit Opportunity Act
ADA
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State Antidiscrimination Laws
California’s antidiscrimination laws include:
 Unruh Civil Rights Act
 Fair Employment and Housing Act
 Housing Financial Discrimination Act
 Real Estate Law and regulations
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State Antidiscrimination Laws
Unruh Civil Rights Act
Law guarantees full use of services provided by
business establishment, regardless of:
race
disability
color
medical condition
religion
sexual orientation
ancestry
marital status
national origin
familial status*
sex
age*
* Additional categories for housing transactions.
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Unruh Act
Business establishments
All business establishments are subject to
Unruh Act. This includes:
 real estate brokerages (and licensees)
 apartment buildings
 condominium and homeowner
associations
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Unruh Act
Penalties
Violators of Unruh Act may have to pay:
 injured party’s actual damages and
attorney’s fees, and
 up to three times the amount of actual
damages or $4,000, whichever is more.
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State Antidiscrimination Laws
Fair Employment and Housing Act
Fair Employment and Housing Act prohibits
housing discrimination based on:
race
national origin
color
ancestry
religion
familial status
sex
source of income
sexual orientation
disability
marital status
Also called the Rumford Act.
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Fair Employment and Housing Act
Prohibitions
Prohibits discrimination in sale, leasing, or
financing of any type of housing.
 Applies to real estate agents and property
managers as well as sellers and landlords.
Unlawful for seller or landlord to ask about
race, religion, or other protected characteristic
of buyer or tenant, but may verify identity and
financial capacity.
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Fair Employment and Housing Act
Prohibitions
The act also prohibits anyone from
advertising housing for sale or rent in
discriminatory terms.
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Fair Employment and Housing Act
Enforcement
Discrimination complaints can be submitted to
state’s Department of Fair Employment and
Housing.
 If warranted, Department will issue an
accusation and hold a hearing.
Case may also be heard in superior court.
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Fair Employment and Housing Act
Enforcement
If discrimination found, violator may have to:
 sell or lease property or similar property
to injured party
 pay actual damages
 pay civil penalty to state
Court may also award punitive damages.
© 2010 Rockwell Publishing
State Antidiscrimination Laws
Housing Financial Discrimination Act
Prohibits residential lenders from discriminating
based on:
 neighborhood characteristics (racial,
ethnic, religious, or national origin
composition)
 borrower’s race, color, religion, sex,
marital status, national origin, or ancestry
This kind of discrimination is called redlining.
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State Antidiscrimination Laws
Real Estate Law
California’s Real Estate Law and
Commissioner’s regulations also prohibit
discrimination by real estate licensees.
Any violation of federal or state fair housing or
civil rights laws is grounds for disciplinary
action under Real Estate Law.
 Real Estate Commissioner could revoke
or suspend violator’s license.
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Discriminatory Restrictive Covenants
Covenants prohibiting sale or lease of
property to non-whites or non-Christians were
once common.
1948 U.S. Supreme Court decision Shelley v.
Kraemer:
 Unconstitutional for state or federal
courts to enforce racially restrictive
covenants.
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Discriminatory Restrictive Covenants
This type of covenant may still appear in
chain of title of some older properties.
Such a covenant does not invalidate deed,
although covenant itself is unenforceable.
 Conveyance can proceed, but restriction
has no effect.
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Summary
State Laws and Restrictive Covenants
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Unruh Civil Rights Act
Fair Employment and Housing Act
Housing Financial Discrimination Act
Real Estate License Law
Discriminatory restrictive covenants
© 2010 Rockwell Publishing