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Fair Housing – Many layers and many players

Fair Housing – Many layers and many players

REALTORS® warned about violations, given tips on how to stay out of hot water


When it comes to fair housing litigation, REALTORS® from Florida have a target on their backs. This was the warning Florida Realtors® General Counsel Juana Watkins, Esq., extended to NEFAR members during her keynote address during NEFAR’s Fair Housing Luncheon May 13.

During her 40-minute talk, Ms. Watkins, who also serves as Florida Realtors® vice president of Law and Policy, advised her audience of more than 175 REALTORS® that it is easy to fall prey to unscrupulous attorneys who make their living using fair housing violations against those in the real estate industry. REALTORS® must take risk management seriously, she said, and is imperative that they remain vigilant about the wording they use in advertising and the way they conduct their professional services.

“We’re No. 1 in membership count, so you know what that means,” said Ms. Watkins, referring to the more than 250,000 members of Florida Realtors®, the largest trade association in Florida and the largest state REALTOR® association in the nation.

“While everyone is cheering that we are No. 1, I am panicked that we are No. 1,” she continued. “I know my fellow lawyers. They like to go after No. 1, and that makes us No. 1 in terms of the potential plaintiff’s pool. We need to remember that. We are adding over 3,000 new agents every single month, and we are still getting sued for these things.”

When it comes to fair housing law, “there are many layers and many players,” emphasized Ms. Watkins, noting that fair housing has a “veritable smorgasbord” of regulations at the federal, state, and local level. “We have 460,000 real estate licensees in Florida, and they are expected to perform honestly and fairly,” she said, adding that REALTORS® are expected to hold to their Code of Ethics, which insists that they not discriminate when they provide professional services and sell property.


Protected classes


During her talk, Ms. Watkins discussed federally defined protected classes such as race, color, religion, national origin, sex, disabilities, and familial status (no children). She also said that the REALTORS® Code of Ethics goes beyond federal law, and she explained about protected classes outside of federal law that REALTORS® need to take cognizance of, including in sexual orientation, gender identity, source of income, age, and actual or perceived status as a victim of domestic violence or stalking.

“Fair housing is not just about saying, ‘No, you can’t live here.’ It is also about denying professional services,” she said.

Advertising causes the most fair-housing lawsuits in Florida, Ms. Watkins emphasized, noting it is critical for REALTORS® to use appropriate language in advertisements and to be watchful in the way they talk to their customers.


Beware. Testers may come calling


Many REALTORS® feel “entrapped” after being served with a lawsuit after testers come to call, said Ms. Watkins. Testers don’t intend to rent or purchase property but act like they do in an attempt to catch real estate industry professionals in fair housing violations, she said.

“Testers are a legitimate part of the Fair Housing enforcement part of the federal government,” said Ms. Watkins. Then she explained that the Department of Justice or a nonprofit with the mission to enforce the Fair Housing Act might send a variety of testers posing as real estate customers to a REALTOR’S® door asking similar questions to see if they get biased responses. The testers could be male or female, a person of color or white, handicapped or able-bodied, all with the intent of seeing whether the REALTOR® responds with fairness and a sense of equality.

According to a report by U.S. Housing and Urban Development (HUD) Department, 7,705 fair housing investigations were conducted in 2020, with a high percentage – 612 – coming from Florida. The top complaint against REALTORS® was prejudice against disabled persons, and many involved emotional support or service animals.

Florida also has a fair housing statute and a Florida Commission on Human Relations to do enforcement, she said, noting over the past year Florida Realtors® has received more than 80,000 calls on its legal hotline. The penalty for first-time violations of the Florida Fair Housing Act can be as high as $20,000, she said.


Intentional vs. unintentional discrimination


“Discrimination can take many forms. There is intentional discrimination such as ‘I will not rent to families with children in this neighborhood because it is quiet’,” she said, using an example of familial status discrimination. However, sometimes discrimination is unintentional – and is not directed against a protected class status holder – such as against people with criminal history.

People who have had trouble with the law in their past do not have protected class status. Yet discriminating against them can be perceived as a back-door way of discriminating against people of color, she said. In 2016, a HUD memo said more people of color had interactions with law enforcement and a third of all Americans in the adult population has a criminal history.

“If we say no criminal history then a third of the American population is going to be homeless and a large portion of that is going to be people of color. This is what we call disparate impact, and it is just as much a violation of fair housing as if you said out of the gate no people of color are allowed here. We can like it, not like it, but it’s the law,” Ms. Watkins said.

In response to the HUD memo, the National Association of REALTORS® (NAR) put out a list of dos and don’ts to help guide members in how to approach clients with criminal history. “What NAR did NOT say was to stop screening tenants with criminal history. We’ve always said you CAN screen tenants with criminal history, but we provided a list of dos and don’ts. An attorney got a hold of the memo and decided he was going to make a business model – a successful one so far – out of suing our members and associations who have policies against renting to people with criminal histories,” she said.

“Please do not create policies that say no criminal history allowed. Take ‘no’ out of your ad and say instead – ‘subject to a comprehensive background screening.’ If you are contacted by any person about a property or your services, the answer is never ‘no.’ Instead, the answer should be, ‘it depends on the content of your application,’” Ms. Watkins advised.


Wheelchairs with fur


So how can REALTORS® ensure they are not unwittingly ensnared in a fair housing violation? Make certain you don’t say ‘no’ to anything in your advertising, Ms. Watkins said. Take, for instance, pets. There should be no such thing as a strict “no pets” policy as far as REALTORS® are concerned.

“You cannot deny emotional support animals or service animals if the proper documentation is supplied to you,” she said. Emotional support animals can be cockroaches, alligators, dogs, or cats. All animals should be viewed as “wheelchairs with fur,” said Ms. Watkins. Even if the homeowner association or insurance company specifies “no pets or pit bulls,” if a pet owner has proper documentation from a doctor, social worker, or psychologist, they cannot be denied, she insisted.


Source of Income


And not saying “no” also goes for potential clients with unusual sources of income. Sources of income is more than just Section 8. Sources of income deals with a variety of ways that people pay their rent and get financing. “We do ourselves a disservice when we reduce things to simplify the language,” Ms. Watkins said.

“Instead of Section 8, say ‘housing choice vouchers’,” she advised. “Be careful. A veteran may say, ‘I can’t get a house because they won’t accept my financing. Someone from Canada may find the HOA has turned them down because they have all their money in a Canadian bank and the association does not want to accept that as proof of income.” But the client can then complain by saying that discriminates against them due to their place of origin.

“When you are presented with a situation that involves income, whether it is a Canadian buyer who is trying to prove source of income or people who are saying their type of financing is not being accepted, call the Florida REALTORS® hotline so we can talk you through it,” Ms. Watkins continued. “Don’t assume it is a non-issue. Everything today is an issue, so be careful.”