You need to know rules for the Real Estate License Exam, as well as the exceptions that go along with them. The 1968 Federal Fair Housing Act was written with certain exceptions, or cases in which people, in a sense, can discriminate in housing issues. In addition to remembering the exceptions themselves for test purposes, you need to remember these two important factors with respect to these exceptions:
Even if an exception is legal for an individual (such as the owner of a single-family home selling her house), a real estate agent is not permitted to participate in the exception. Real estate agents are held to a higher standard in fair housing matters.
Discriminatory advertising may not be used; again, even when the exception itself is legal. The owner of a single-family home can’t use discriminatory advertising in selling her house, even though she could discriminate in the ultimate sale itself.
Don’t forget that regardless of exemptions permitted by the 1968 Federal Fair Housing Act, the 1866 Civil Rights Act permits no exceptions with respect to race. The exceptions in the 1988 Law are as follows.
Age: An exemption is provided to housing protections afforded to age and familial classes intended for older people. Housing may be restricted to people 62 or older or 55 or older in cases where at least one occupant per unit is 55 and at least 80 percent of the units are occupied by people ages 55 or older. In these cases children may be excluded.
Owner-occupied housing: Multifamily housing of two to four units, where one of the units is owner-occupied, is exempt from fair housing laws.
Private clubs: An organization that restricts its membership may provide restricted housing to its members, as long as it doesn’t offer housing to the general public.
Public-law occupancy standards: Local maximum occupancy standards aren’t superseded in their application by the Fair Housing Act. For example, if a local law provides a maximum occupancy of two people per bedroom and you rent out a studio apartment in a building you own, you can’t be forced to rent the apartment to a couple with a child.
Religious organizations: Housing sponsored by a religious organization may be restricted to members of that particular religious organization, provided the religion doesn’t discriminate in its membership policies.
Single-family housing: The sale or rental of a single-family house is exempted from the rules of the Fair Housing Act if the owner doesn’t own more than three units at one time, and neither a broker nor discriminatory advertising is used. If such a property is sold, no more than one house can be sold during every two-year period.