Fair Housing

                 

FAIR HOUSING ADVERTISING:   FOR SALE OR FOR RENT

 It shall be unlawful to make, print, or publish, or cause to be made, printed, or published, any notice, statement, or advertisement with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based upon race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.

 

The Fair Housing Act, § 804(c)

42 U.S.C. 3604(c)

 

Federal Fair Housing Advertising Law

 

With respect to real estate advertising, § 3604(c) of the Fair Housing Act of 1968 provides that “It shall be unlawful . . . [t]o make, print, or publish, or cause to be made, printed or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.”

 

Persons Subject to the Fair Housing Act

This legal prohibition applies to anyone who plays any role in the “making, printing, or publishing” of real estate advertising. This includes newspapers, magazines, multiple listing services, homes magazines, advertising agencies, real estate brokers and other professionals, property management companies, and all of their clients.

 

Forms of Advertising Subject to the Act

This provision applies to every form of advertising for residential real estate including classified ads, display ads, inserts, brochures, direct mailings, radio or television ads, MLS listings, Internet ads, posters, billboards, application forms, church bulletins, postings on bulletin boards, signs, videos, and verbal statements. HUD regulations provide that “It shall be unlawful to make, print or publish, or cause to be made, printed or published, any notice, statement or advertisement with respect to the sale or rental of a dwelling which indicates any preference, limitation or discrimination because of race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation or discrimination. The prohibitions in this section shall apply to all written or oral notices or statements by a person engaged in the sale or rental of a dwelling.”

 

Showing a Preference

A “preference, limitation, or discrimination” may be overtly stated or subtly inferred. Preferences may be shown through the use of discriminatory words, phrases, symbols, directions to the property, area or neighborhood descriptions, or other verbal cues; the selective use of media with limited target audiences; the composition of human models depicted in advertising campaigns and in other visual cues; selective geographic advertising (billboard placement, etc.); and selective use of Equal Housing Opportunity symbols.

A violation of the Fair Housing Act can be found even if the advertiser or publisher did not intend to express a discriminatory preference or limitation. Rather an ad will be judged based upon whether an ordinary reader will believe that the ad suggests a preference or limitation.

 

“Dwellings” Defined

The Fair Housing Act applies to all “dwellings,” which is defined to include any building, structure, or portion of a building or structure that is occupied as, or intended or designed for occupancy as a residence for one or more families or individuals. Thus “dwellings” includes houses, townhouses, condominiums, apartments, co-ops, nursing homes, residential hotels, and any other type of residential housing. “Dwellings” is also defined to include vacant land offered for sale or lease that is intended for the construction of housing. Thus the term includes subdivision lots and residential developments under construction or planned for future construction.

 

Wisconsin Fair Housing Law

 

Wisconsin Fair Housing Law is substantially similar to federal law.Wisconsinlaw provides that “It is unlawful for any person to discriminate by advertising in a manner that indicates discrimination by a preference or limitation.” “Discriminate” means to segregate, separate, exclude or treat a person or class of persons unequally . . . because of sex, race, color, sexual orientation, disability, religion, national origin, marital status, family status, lawful source of income, age, or ancestry.” “Advertise” means to publish, circulate, issue or display or cause to be published, circulated, issued or displayed, any communication, notice, advertisement or sign in connection with the sale, financing or rental of housing.

 

REALTORSÒ Code of Ethics

Article 10 of the REALTOR® Code of Ethics provides that “REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin. 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, or national origin.”

 

REALTORSÒ shall not print, display, or circulate any statement or advertisement with respect to the sale or leasing of a property that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin. (REALTOR® Code of Ethics, Standard of Practice 10-1)

 

Who is protected by fair housing laws?

Federal, state, county, and city fair housing laws vary somewhat over what classes of persons are protected. Generally, you must comply with the law that offers the most stringent level of protection. Normally this is the local ordinance or the state law if there are no applicable municipal ordinances.

 

The following are the protected classes under federal and Wisconsin fair housing laws. Additional classes may be protected under local fair housing ordinances.

 

Protected Classes under Federal Fair Housing Law   

Section 804(c) of the Fair Housing Act (Title VIII of the Civil Rights Act of 1968) prohibits the making, printing, and publishing of advertisements that state a preference, limitation, or discrimination on the basis of the federal protected classes. The prohibition applies to publishers, such as newspapers and directories, as well as to persons and entities who place real estate advertisements.  It also applies to advertisements where the underlying property may be exempt from the provisions of the Act, but where the ad itself violates the Act. The Act provides that it is unlawful to discriminate based upon:

 

                        Race:  a person’s membership in a group possessing characteristics and traits transmitted by descent, e.g. White, African American, Hispanic, etc.

                         Color:  a person’s skin color.

                         Religion:  a person’s religious or spiritual beliefs and practices, or his or her denominational affiliations.

                        Sex:  gender, whether a person is male or female.    

                       Handicap/Disability: whether a person has a physical or mental disability that substantially limits one or more major life activities, has a record of such a disability, or is regarded as having such a disability. Examples include: hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, HIV positive, mental retardation, muscular dystrophy, multiple sclerosis, cerebral palsy, and epilepsy. It does not include a person who currently uses illegal drugs/controlled substances. UnderWisconsin law, a person who currently uses illegal drugs/controlled substances is included if the person is participating in a supervised drug rehabilitation program.

 

                        Familial/Family Status: whether persons are members of families in which one or more children under 18 years old live with a parent, a person who has legal custody, or the designee of the parent or legal custodian (with written permission). It also includes pregnant women and persons seeking legal custody of a minor under both federal and state law.Wisconsin law is broader and also includes person seeking physical placement or visitation rights of a minor child; and persons whose household includes one or more adults or minors in their legal custody, or pursuant to physical placement, visitation rights, or court-ordered care under a guardianship.

 

                        National Origin/Ancestry: the country where a person or his or her ancestors originated or came from. Ancestry means a person’s racial and ethnic background. In other words, ancestry takes you back further in the family tree than does national origin.

  

Protected Classes under Wisconsin Fair Housing Law

The Wisconsin Fair Housing Law, found in Wis. Stat. § 106.04 (formerly § 101.22), prohibits unlawful discrimination in housing on the basis of the classes protected under federal fair housing law and based upon the following additional classes:

                       

                        Marital Status: whether a person is single, married, divorced, separated or widowed.

 

                        Sexual Orientation: whether a person has a preference for heterosexuality,

                        homosexuality, or bi-sexuality; has a history of such preference; or is identified with

                        such a preference.

 

                        Lawful Source of Income: the source of a person’s income, provided that it is legal. This may include lawful compensation or remuneration in exchange for goods or services provided; profit from financial investments; and any negotiable draft, coupon, or voucher representing monetary value such as food stamps, Social Security, public assistance, unemployment compensation, or worker’s compensation payments. Section 8 payments are not considered income under state law.

                         Age:  the age of persons at least 18 years old. Children under 18 years of age are protected on the basis of family status.

  

Local Fair Housing Ordinances 

 

Counties and local municipalities may develop their own fair housing ordinances, so it is important to become familiar with the local fair housing ordinances affecting your area.

These ordinances will tend to offer broader protections and may have more protected classes than federal or state law. Although the protected classes and exemptions may appear similar to what we have underWisconsinlaw, there may be definitions or other provisions that make the ordinances slightly buy significantly different. Some additional protected classes sometimes found under local fair housing law include political beliefs, physical appearance, student status, less than honorable discharge, and arrest and/or conviction record.

 

Exceptions to the General Rules

1. Handicap Accessibility. Advertising may indicate the availability of handicapped accessible housing or describe specific features that make the housing accessible.

 

2. Housing for Older Persons. Advertising for qualified “housing for older persons” may refer to the age of the desired residents. Such advertising is exempt from the Act’s prohibition against familial status discrimination, and the Wisconsin Fair Housing Law’s prohibitions against age and family status discrimination. “Housing for older persons” includes (1) housing for the elderly under special state or federal programs specifically designed and operated to assist elderly persons, as determined by HUD, (2) housing intended and operated for occupancy by at least one person age 55 or older, where at least 80% of the units must be occupied by at least one person who is 55 years old or older and where there are policies and procedures designed to serve that age group, and (3) housing exclusively for persons age 62 or older.

 

3. Roommates. Advertising for roommates may indicate the desired sex of the tenant sought in situations where there are shared living areas or where the advertising is for a dormitory at an educational institution. This exception does not apply if the rental is for separate units in a single or multi-family dwelling.

 

4. Religious organizations. Religious groups and organizations may indicate a preference for or limitation to members of their religion when advertising dwellings they own or operate on a noncommercial basis, provided the religious group does not discriminate on the basis of race, color, or national origin.

 

5. Private clubs. Private clubs may express a preference for or a limitation to members of the club when advertising housing that the club owns or operates on a noncommercial basis.

 

6. Affirmative marketing. References to protected classes may be made, in certain cases, in advertising that is part of an affirmative marketing program designed to attract persons who would not ordinarily be expected to apply for the housing.

  

Occupancy Standards

The federal Fair Housing Act permits local and state governments and the federal government to establish "reasonable" occupancy limitations for housing units. The issue this raises is whether or not an occupancy standard, for example, a certain minimum square footage per person or per bedroom, or maximum persons per bedroom, creates the potential for discrimination against large families, thus violating the familial status provision of the Fair Housing Act.

 

HUD's guidance in March 1991, issued by General Counsel Frank Keating, was recently adopted as a HUD guidance on occupancy standards. HUD has stated that an occupancy policy of two persons in a bedroom, as a general rule, is reasonable under the Fair Housing Act.

      Property owners, in the absence of a state or local occupancy standard, must do their homework before adopting private occupancy restrictions. A limit of one person per bedroom or three persons per two-bedroom unit, without some backing based in physical limitations, e.g., hot water or waste disposal system, may be risky. Even if there is a local ordinance or standard, owners and advertisers may wish to proceed with caution because local ordinances may not be legal or may be selectively enforced in a discriminatory manner.

 

     Wis.Admin. Code § Comm 79.09, which covers existing apartment houses of three or more units, states:  “Every sleeping room shall be of sufficient size to afford at least 400 cubic feet of air space for each occupant over 12 years of age, and 200 cubic feet for each occupant under 12 years. No greater number of occupants than the number established shall be permitted in any such room.”

 

This regulation on apartment housing could create a conflict with the HUD occupancy standards. For example, a single parent with three children under the age of twelve wants to rent a two-bedroom unit; both bedrooms are 500 cubic feet. Under Federal guidelines (two persons per bedroom) the landlord would not be able to refuse to rent to this family based on its size (unless other limitations, such as hot water or sewage disposal, existed). On the contrary, under the State's standards, all three children could not use one bedroom, but the parent and one child could not share a room. In short, the landlord may be left between a rock and a hard place.

While clever ideas seemingly abound for writing catchy advertisements, ads for the sale or rental of housing first must follow some basic legal guidelines. For example, all real estate ads must avoid any false, deceptive, or misleading language and representations.

 

Under federal and state fair housing law, it is illegal for any person  to advertise for housing in a manner that indicates any discriminatory preference or limitation.

 

When writing and placing an advertisement that will not violate fair housing law, many points must be kept in mind. The advertiser must:

1)     Avoid the use of discriminatory words, phrases, symbols, directions, or other verbal cues;

2)     Avoid any discriminatory preferences that may be suggested through the use of human models and other visual cues;

3)     Attend to the use of Equal Housing Opportunity logo and slogans; and

4)     Avoid placing the advertisement in a discriminatorily selective manner.

  

HUD Guidance for Real Estate Advertising

Although there were, at one time, many groups who developed lists of “forbidden words” and words to avoid in advertisements for housing, current HUD standards take a more practical approach. Under current HUD standards, one looks at the entire ad and the context in which words are used instead of making knee jerk decisions based solely on the presence or absence of particular words.

 

Race, color, and national origin:  Real estate advertisements may not state a discriminatory preference or limitation on account of race, color or national origin.  Nor may such advertisements use words describing the housing, the current or potential residents, neighbors or neighborhood in racial or ethnic terms.  However, it is not unlawful to use phrases such as “master bedroom,” “rare find” or “desirable neighborhood” which are deemed to be “neutral” on their face with respect to race.

 

Religion:  Advertisements that contain an explicit preference, limitation, or discrimination on account of religion are prohibited. If an advertisement uses the legal name of an entity that contains a religious reference (for example, Roselawn Catholic Home) or a religious symbol (such as a cross), a religious preference could be implied.  If the advertisement contains an appropriate disclaimer against such preference or limitation, it will not be held in violation of the federal fair housing law. In the long run, however, it may be easier to just avoid all religious references in housing advertisements.


Descriptions of the property (apartment complex with chapel) or the services (kosher meals available) are permissible. Use of terms (Merry Christmas or Happy Easter) or symbols (Santa Clause or Easter Bunny) relating to certain religious holidays do not constitute a violation of federal fair housing law or the HUD advertising guidance.

Sex:  It is unlawful to advertise for single family dwellings or separate units in multifamily dwellings in a manner which explicitly indicates preference, limitation or discrimination on the basis of sex.  It is permissible to use the terms “master bedroom,” “mother-in-law suite” and “bachelor apartment,” which are commonly used ion conversation and writings as physical descriptions of housing units or features.

Handicap:  Real estate advertisements may not contain exclusions, limitations or other indications of discrimination based on handicap.  It is lawful to describe the property (great view, fourth-floor walk-up, walk-in closets), the services or facilities (jogging trails) or the neighborhood (walk to the bus stop).  It is also permitted to describe the conduct required of residents (nonsmoking).  Advertisements may contain descriptions of accessibility features, such as a wheelchair ramp or bathroom grab bars.

Familial Status: Advertisers may not discriminate on the basis of familial status. For example, advertisements which contain limitations on the number or ages of children or state a preference for adults (unless the property meets the housing for older persons exemption), couples or singles are prohibited.  On the other hand, descriptions of the property (two bedroom, cozy, family room), services and facilities (no bicycles allowed) or neighborhoods (quiet streets) are not discriminatory on their face and therefore do not violate the law.

 

 

THE COMMON THEME THROUGHOUT THE GUIDELINES IS:

 

Ordinary Reader Test.

Whenever these advertising guidelines and the case law do not address whether particular terms or phrases (or closely comparable terms or phrases) violate fair housing law, a person writing a real estate ad may apply the “ordinary reader” test. This standard is frequently used by the courts and in administrative hearings to analyze whether real estate ads violate fair housing law. The objective “ordinary reader” standard asks whether the advertisement suggests to an ordinary reader that a particular class is preferred or “dispreferred” for the housing at issue. The ordinary reader is defined to be the law’s traditional “reasonable person” who is neither the most suspicious nor the most insensitive person. There generally will be no liability if any potential preference is not apparent to the ordinary reader.

 

Use of Human Models

Human models in photographs, drawings, or other graphic techniques may not be used to indicate exclusiveness on the basis of race, color, or any other protected class. If models are used in display advertising, the models should be clearly definable as reasonably representing majority and minority groups in the metropolitan area where the ads are published. In other words, the photos or drawings you use should fairly represent the composition of the metropolitan area where your listings are located. If you picture only white people, but the metropolitan area has a variety of ethnic and racial groups, that could be construed as discriminatory. As with other fair housing advertising violations, discriminatory intent is not necessary, and the ads will generally be judged based on the ordinary reader test.

 

The use of human models depicted in advertisements is judged based upon their use throughout an advertising campaign over a period of time. An ad for a particular development or complex generally should not be viewed in isolation, but rather as one of many ads used for a project over a period of weeks or months. An advertising campaign also is examined on a development-by-development basis.

  

The use of the human models should be generally reflective of the make-up of the metropolitan area in which the ads are published. The use of human models cannot merely reflect the make-up of the particular neighborhood or of a particular publication, but rather the racial make-up of the metropolitan area as a whole.

 

A Virginiacondominium agreed to pay $835,000 to settle a claim that they violated the provisions of the FHA by using exclusively white models in advertising. The settlement also included an agreement to use human models in proportions which reasonably represented majority and minority groups in the community. Spann v. Colonial Village, Nos. 94-7075 and 94-7093 (D.C. Cir. dismissed 6-995).

 

A real estate development and management company (company) conducted a series of advertising campaigns promoting luxury residential complexes in Manhattan. The advertisements consisted of various layouts and models, all of which were white. The plaintiffs filed suit claiming that the advertisements suggest that “blacks and minorities were not . . welcome in the particular area, or the particular buildings that these (were presented by) these advertisements.”

           

Although none of the company’s ads using a single white model or even a small group of white models read alone would indicate an impermissible racial preference to the ordinary reader, the court determined that the ordinary reader, when viewing all of the advertisements collectively and as frequently as did the plaintiffs (14-24 times), would naturally infer from these ads that white individuals were preferred as tenants. As a result, the court ruled the company had violated section 3604 (c) of the Fair Housing Act. Ragin v. Harry Macklowe Real Estate Company, Inc., 801 F.Supp. 1213 (S.D.N.Y., 1992).

 

A $2 million dollar award was made against a company that owned, managed, developed, and marketed housing in the Baltimoremetropolitan area. Virtually no African Americans were depicted in the company’s newspaper and television ads. Over a 13-month period, 95 white persons were shown in the company’s print ads, and only one African American was shown as a carpenter building the housing. The Baltimoremetropolitan area was a t the time at least 26% African American. The company had rejected the recommendation of its advertising agency to use ads depicting African Americans. A verdict of over $2 million was returned by a state court jury. Fenwick-Schafer v. Winchester Homes, No. 90066002/CL 110092 (Md. Cir. Ct. 1993).

  

 Equal Opportunity Logo and Slogan

 

HUD regulations provide that all advertising, whether visual or auditory, for the sale, rental or financing of housing should contain the Equal Housing Opportunity logo, statement, or slogan. This is not limited to just newspaper advertisements, but rather applies to all written, radio, television and video advertising.

 

HUD guidelines recommend that all publishers should publish a notice at the beginning of their real estate advertising section that includes language to the following effect:

 

“All real estate advertised herein is subject to the Federal Fair Housing Act, which makes it illegal to advertise any ‘preference, limitation, or discrimination because of race, color, religion, sex, handicap, familial status, or national origin, or intention to make such preference, limitation, or discrimination.’ We will not knowingly accept any advertising for real estate which is in violation of the law. All persons are hereby informed that all dwellings advertised are available on an equal opportunity basis.”

 

The notice may also reference any local fair housing statute or ordinance prohibiting discrimination in the sale or rental of housing, such as theWisconsinfair housing law and local fair housing ordinances -- additional protected classes maybe thereby be involved.

 

HUD guidelines also recommend that all advertising for the sale or rental of housing should contain an equal housing opportunity logo, statement, or slogan. The Equal Housing Opportunity Statement provides that “We are pledged to the letter and spirit ofU.S.policy for the achievement of equal housing opportunity throughout the nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status, or national origin.” The Equal Housing Opportunity Slogan is “Equal Housing Opportunity,” and the Equal Housing Opportunity Logo is the symbol and wording that appears at the beginning of this section.

 

Size of Advertisement

Size of Equal Housing Opportunity

Logo, in Inches

Less than 4 column inches

 

Use slogan:  “Equal Housing Opportunity”

 

 

4 col. inches up to 1/8 page

 

1/2 x 1/2

 

1/8 page up to 1/2 page

 

1 x 1

 

1/2 page or larger

 

2 x 2

 

 

If these sizes are not relevant, such a s in a pamphlet or on a billboard, the Equal Housing Opportunity logo should be at least as big as any other logos in the ad. It should appear in bold and be clearly visible. If the Equal Opportunity Statement is used, it should take up 3-5% of the ad.

 

The selective use of the equal opportunity logo or slogan may be considered discriminatory because its absence in some ads and not others may be construed as limiting choices for consumers.

  

Publication Selection

 

The advertising publications, brochures, or flyers used for real estate advertising should be ones that are widely available to the public. Limiting ads to publications that are distributed to a very selected audience may violate fair housing law. For instance, if you advertise only in a publication catering to older persons, you may be discriminating against families with children.

 

HUD regulations warn against using media or publications that cater exclusively to one particular racial group, ethnic group, religion, sex, or other protected group. Instead, a variety of media outlets should be used which reach diverse groups in the community. HUD regulations are not intended to deter advertising in publications with specialized audiences. However, selective advertising must be used as part of an overall marketing strategy that places advertising in a variety of locations and media that seek to reach all groups in the community.

 

The target audience should always be all qualified buyers. If an advertising program appears to target neighborhoods or other audiences made up predominantly of one racial or other protected group, it is important to include complementary advertising designed to reach other groups in order to avoid legal liability. Non-English publications should be utilized where available, provided that the advertising in the non-English publications is counter-balanced with ads in English publications.

 

Housing advertising should also not be selective on a geographical basis. Billboards, brochure distribution, or direct mailings should be targeted at more than one particular neighborhood or geographical area if the composition of that neighborhood or geographical area is predominately inhabited by a particular ethnic, cultural, or other protected group.

 

“Board Approval Required”

Condominiums, co-ops, and homeowners associations often have the right to screen and approve buyers and tenants. The problem when “board approval required” appears in an ad is that it does not specify what guidelines the board uses to approve a prospective buyer or tenant.  The phrase could be interpreted as meaning that the board is screening applicants according to race or religion, which would be a violation of fair housing law.  It is best to specify the criteria the board will use to give its approval.  For example, “the board will approve applicants based on creditworthiness” gives a standard.

 

Publisher Liability

 

Publishers and advertisers are responsible under the federal Act for making, printing, or publishing an advertisement that violates the Act on its face. Thus they should not publish or cause to be published any ad that on its face expresses a preference, limitation, or discrimination on the basis of race, color, religion, sex, handicap, familial status, or national origin.

  

Likewise under Wisconsin Fair Housing Law, “advertise” is defined to mean “to publish, circulate, issue or display, or to cause to be published, circulated, issued or displayed, any communication, notice, advertisement or sign in connection with the sale, financing or rental of housing.”  The definition of “discrimination” includes “advertising in a manner that indicates discrimination by a preference or limitation.”  Accordingly, a publisher like an MLS is subject to fair housing law advertising liability under both federal and Wisconsin law.  To find liability, however, there will normally have to be MLS material published (Remarks section) that is clearly discriminatory to an ordinary reader.

 

To the extent that the particular terms or phrases used (or closely comparable terms or phrases) are not clearly in violation of the Act by virtue of case law, etc., a publisher is not in violation of the Act for ads where the words used might indicate a preference, limitation, or discrimination, but where such preference, limitation or discrimination is not readily apparent to an ordinary reader.

 

Settlements with the Thrifty Nickel and the Little Paper

In two 1996 fair housing advertising cases from Florida, two local shopping papers, the Thrifty Nickel and the Little Paper, agreed to $7,000 and $11,000 settlements, respectively.  Most of the discriminatory ads appearing in these publications excluded families with children and single women. When the landlords who placed the ads were contacted, they received explanations such as:  “Single women attract men at night.” “We don’t rent to families because of insurance rates.” One landlord who was an attorney commented that “I don’t want other people’s children to interfere with my law practice.”

 

When a tester visited the office of the Thrifty Nickel, the paper’s employee was asked about the wording of two ads the tester purportedly was going to place. The first ad was “Two bedroom apartment, one bath, screen porch, no children, $350 per month.” The employee advised the tester it may be better to indicate “no children preferred” rather than just “no children.” The second ad was “One bedroom efficiency, near schools, Catholic Church, single working man preferred, $225 per month.” The employee saw no problem with this ad. 

 

The editors of many local newspapers were invited to attend a seminar about fair housing law as it applies to advertising, but neither paper attended. The editors were also warned by letter to bring their advertising practices into compliance with fair housing law, but the discriminatory ads continued. It was only when the two papers were sued that they realized the impact of what they were doing. They then settled the cases and began bringing their ads into compliance with fair housing law.

  

Liability for Language Used in MLS Listing Remarks

All rumors to the contrary aside, MLSs must abide by the same anti-discriminatory rules that apply to other forms of advertising. HUD's fair housing advertising guidelines specifically address words that can or can't be used in advertising, and the same rules apply to words used in the "Remarks" section of property listings.

 

Concerned about the threat of huge fines for violations of the federal Fair Housing Act, one MLS tried something new to prevent discriminatory words from ending up in its listings database. One metropolitan board developed software that screens information entered into the "Remarks" section of listings and automatically block certain words and phrases that have been judged to be discriminatory.

 

What started as one MLS participant using the phrase "adults only over 40" in the "Remarks" section of a MLS listing for a condominium unit ended up with a local board MLS knee deep in a federal administrative law proceeding before a HUD ALJ. This was all because the phrase used by the participant discriminated against families with children and, therefore, was prohibited under the Fair Housing Act.

 

The MLS agreed to settle the complaint with HUD reviewing the extent of its liability. Violators of the act face fines of up to $10,000 for each violation. Each time a violation is reprinted in an MLS book, the reprint is counted as a separate violation. As an additional part of the settlement, the MLS agreed to conduct biweekly computerized searches for 67 discriminatory words or phrases, hence the new computer program.

 

There are various measures an MLS service can take to help protect the MLS from liability for fair housing law violations in the MLS listings it publishes. All MLS Participants may be given and asked to sign a receipt for a written policy statement. This statement may be republished regularly and given to each new participant who signs up for MLS. A helpful inclusion may be a “how to” prepare and submit an MLS listing sheet that would include tips for avoiding fair housing problems.  MLS staff may also be given and asked to sign a receipt for a set of these materials, and required to attend some sort of fair housing law training.

 

A policy statement may be prepared for participant offices to adopt regarding submissions to the MLS (similar to the Wisconsin REALTORS® Association Fair Housing Declaration).  Larger participants and/or the Board’s equal opportunity committee may be able to set up a screening program to monitor MLS listings, especially the Remarks section.  All MLS books sent out as well as all computer-generated data and print-outs should include some sort of fair housing message, e.g., “All listing are available as Equal Housing Opportunities.”

 

Other demonstrations of fair housing vigilance may not be as desirable.  These might include implementing a computer program which searches for certain words and phrases (e.g., adult community, bachelor, board approval required, couple, empty nesters, and must be employed), staff pre-screening of all MLS listings, staff immediately changing ads with questionable language (rather than contacting the listing broker and letting them amend the listing contract), or sending copies of all MLS books to HUD.

 

Homes Magazines 

It is not contrary to National Association of REALTORS® policy for a local or regional Board of REALTORS® to provide a homes magazine as an advertising vehicle to better serve its membership. Listing brokers may submit a listing to the MLS and inform the Board that information of interest to buyers and sellers is also to be included in the Board’s homes magazine.

 

It is important to remember that homes magazines are not vehicles through which brokers traditionally offer cooperation and compensation. Rather, they are advertising mediums whose dissemination is envisioned in much broader terms than the limited dissemination and reproduction of MLS compilations of current listing information. Homes magazines are traditionally distributed to members of the public in retail stores or as supplements to local newspapers. While Boards of REALTORS® provide MLS compilations of current listing information to MLS Participants who are capable of offering and accepting cooperation and compensation, homes magazines are more for the general public.

Commonly asked questions about homes magazines include:

 

1. How best should a Board of REALTORS® establish ongoing governance of a Board owned homes magazine? Should the MLS Committee set the guidelines for member use and distribution since all members, even non-participants in the MLS, may advertise in the publication?

 

While this is a matter of Board option, such publications generally are not viewed as part of the MLS but rather as a Board activity and could appropriately be regulated by a Committee of the Board established for that purpose.

 

2. Can the Board limit the right to advertise in the Board owned publication to real estate brokers who are members of the Board? Can the Board place limits on the type of advertising it will include in the publication, such as excluding employment solicitations?

As a general rule, Boards may produce homes magazines and limit the right to advertise in them to members of the Board. Boards may also exercise significant control over the type of advertising accepted for the publication. The antitrust risks associated with these kinds of practices are minimal because in most market places there are significant alternative vehicles available for real estate advertising. The most common of these is the local newspaper of general circulation. In addition, radio advertising, billboards and direct mail advertising is also available. Because of these numerous alternative sources of advertising, the Board owned and operated homes magazine is not ordinarily an advertising medium that is "competitively significant" or "essential" to the practice of real estate brokerage.

 

The same analysis would apply to Board limitations on the type of advertising it will accept for dissemination through a homes magazine. Because persons wishing to advertise in a manner that is not acceptable in the homes magazine have numerous alternatives available to them to communicate their message to consumers, the Board's limitation does not constitute an appreciable restraint of trade.

 

Of course, each Board should carefully consider these issues based upon local market conditions if they elect to create a homes magazine. There may be unique circumstances in their market area that would inflate the competitive significance of such a publication. In these circumstances, the Board should consult with the National Association or competent antitrust counsel before deciding to create such a publication.

 

3. May the Board or MLS have a rule that connects the authority to publish listing information in a homes magazine with the inclusion of that listing in the MLS compilation of current listing information?

 

NAR legal staff has advised that such a practice may place the Board at risk with respect to compliance with anti-trust laws.

 

4. May a Board develop rules that prohibit a member from affixing his business card to copies of the homes magazine produced by the Board and leaving them in public places within the Board's jurisdiction?

 

The response to this question depends on the rules and procedures established for governance of the particular homes magazine. For instance, if members simply pay a fee to include information regarding properties in the publication and do not purchase copies for their own distribution and use, then we believe that it would be appropriate to prohibit members from affixing their business cards. If, on the other hand, the Board sells or gives copies to members so that they can, in turn, distribute them where and when they choose, then we see no basis by which the Board could prohibit the members from affixing their business cards, stamping their firm's name on the cover, etc.

 

We can envision, of course, combinations of the above-referenced systems whereby the Board would be primarily responsible for distributing the bulk of such advertising publications with individual firms purchasing additional copies for their own use. In such a case, it would appear that those copies bought for individual firm use could be "personalized" with a business card.

 

 

Fair Housing Law Enforcement

Federal fair housing advertising law may be enforced by filing an administrative complaint with HUD, or by filing a private lawsuit in federal court. In cases of a pattern or practice of discriminatory conduct, the Attorney General may also file legal action. Remedies awarded may include compensatory damages, including pain, suffering and humiliation; injunctive relief; civil penalties ranging from $10,000 to $50,000, and the award of reasonable attorneys’ fees and costs. In addition, the federal courts may award punitive damages. There have been several cases where the damage award was in the $100,000’s ranging up to $2 million.

 

UnderWisconsinlaw, a complaint may be filed with the Equal Rights Division of the Wisconsin Department of Workforce Development. In an administrative action, the aggrieved party may be awarded compensatory damages, injunctive relief, a civil forfeiture ranging from $10,000 to $50,000, plus attorneys' fees and costs. In a civil action based uponWisconsinlaw, the same remedies are available plus the court may award punitive damages. The Wisconsin Department of Justice may also bring a lawsuit if there is a pattern or practice of discriminatory behavior.

 

The Equal Rights Division may also refer a fair housing complaint against persons holdingWisconsinlicenses (such as real estate salespersons and brokers) to the licensing agency for enforcement action. In those instances, the person may also be subject to revocation, suspension, or limitation of his or her license, along with other remedies including education, reprimand, and forfeiture ($1,000 for real estate licensees).

 

 

Case Law Examples                                     

A landlord’s stated preference for “mature adults” in published advertising was found to discriminate based upon family status in violation of fair housing law. The Seventh Circuit Court of Appeals upheld the original findings of the administrative law judge who had applied the “ordinary reader” test and concluded the landlord was discriminating against families with children. Jancik v. HUD (1995).

 

The phrase “ideal for couple,” when used to describe a two-bedroom cottage for rent, was held to not violate fair housing law. The Wisconsin Court of Appeals, applying the “ordinary reader test,” found that the ad did not disprefer single persons. Rather, it referred to the size of the quarters. The message of the ad was found to be the suitability of the property to the tenant, not the acceptability of the tenant to the owner. Milwaukee Fair Housing Council v. LIRC, 173Wis. 2d 199 (Ct. App. 1992).

A newspaper ad requesting that the tenant for a one-bedroom unit be a “mature Christian handyman” would be interpreted by an ordinary reader to state a discriminatory preference based upon religion. The ad also indicates sex discrimination in violation of fair housing law. (LIRC 1993). Note: If the owner had really wanted to hire a handyman, perhaps the best approach would be to advertise for the job (“Handyman wanted”) and have the apartment available as part of the compensation package.

 

The phrase “retired or working couple” was found not to indicate discrimination based upon marital status. Rather, the ad discriminates based upon lawful source of income. The phrase used was not qualified with a phrase like “ideal for,” or “perfect for” - it bluntly and unequivocally suggests, in the very least, a preference for retired or working persons, and at worst, an outright limitation. (LIRC 1992).

 

 “Perfect For Single Or Couple” In Advertisement. Guider v. Bauer, 865 F. Supp. 492 (Ct. App. 1994). To rent an apartment, the landlord placed the following advertisement in the classified section of a local newspaper:  “Perfect for single or couple. 2 Bedroom Victorian Duplex, 2-story, smoke-free, washer/dryer.”

 

When the prospective tenant called to inquire about the apartment, the landlord confirmed that the apartment was still for rent. The landlord then asked the tenant who would be living with her in the apartment. When the tenant replied it would be her two sons, the landlord informed the tenant that the apartment was not suitable for children because the rooms were too small and then hung up the phone. 

           

Two weeks later, an employee of a local civil rights group (employee) called to inquire about the same apartment. The landlord suggested that she come by and look at the apartment. When the employee told the landlord that she had children, the landlord told her the apartment was rented and hung up the phone.  

           

The court, however, found that the language of the advertisement was not facially nondiscriminatory as a matter of law (i.e., an inference could be drawn from the clearly expressed preference for a single individual or couple). The court declared that the “ordinary reader” test should be used to determine if the FHA has been violated. Ragin v. New York Times Co., 923 F. 2d 995 (2d Cir. 1991) (An advertisement is discriminatory if it suggests to an ordinary reader that a particular familial status is preferred or dispreferred for the housing in question.)

 

Note that direct evidence showed that the newspaper intended to discriminate on the basis of familial status because they failed to pull the advertisement after being given notice that the landlord refused to rent to families with children.

 

“Mature Person Preferred” Used in Newspaper Ad. Jancik v. HLTD, #93-3792, 1995 U.S. Appellate LEMS 198 (CA-7 1-6-95). The Seventh Circuit affirmed a HUD Administrative Law Judge's determination that an Illinois landlord violated the Fair Housing Act by publishing the words “mature person preferred" for rental housing in a local newspaper. Testers for the Leadership Council responded by telephone to the ad and were asked their race and were told that the owner did not want a tenant with children. The HUD Administrative Law Judge awarded the Leadership Council $21,386 in damages, one of the testers $2,000, and imposed a civil penalty of $10,000. They also order the defendant to pay $23,843 in attorney’s fees.

 

“Single Occupancy” Used In Advertisements. Metropolitan Milwaukee Fair Housing Council v. Storm, (DILHR, 1991). The ad in question said:  “FOR RENT, 1 bedroom, single occupancy, no pets.” Applying the “ordinary reader” test, the ALJ determined that an ordinary reader would not have interpreted the phrase “single occupancy” to refer to persons whose marital status is single, but, rather, to mean that the apartment was to be occupied by one person, regardless of the person’s marital status. The ALJ based her determination on direct testimony given by the eventual tenant, who stated that he interpreted the sign to mean one person, and on the landlord’s testimony that it was his intent was to communicate that only one person could occupy the apartment.

 

Does limiting occupancy to one person create a disparate impact on married or widowed persons? In order to make a prima facie case out of discrimination under the disparate impact theory, the Complainant must prove that the challenged practice or policy has a disproportionate impact on the individuals in a particular protected group. In order to do so, disparity between the protected class and the non-protected class is of sufficient magnitude to be considered a “disparate impact.” Racine Unified School Dist., 164Wis. 2d 567, 596 (Ct. App. 1991)

 

Although the Complainant claims that many unmarried people would be adversely affected by a single occupancy requirement, the ALJ ruled that she did not provide sufficient evidence to substantiate such a claim (“a statistical showing is needed”). The ALJ, however, was persuaded by the landlord’s testimony regarding his belief that the apartment was suitable for only one person because of its small size (approx. 600 square feet), the lack of closet space, and the small capacity of the hot water heater.

 

Apartment Advertisements Approving Only Males\Females; Students. Wilson v. Glenwood Intermountain Properties, 876 F. Supp. 1231 (D. Utah 1995). Wilson filed a claim against Glenwood Intermountain Properties (GIP) alleging that GIP violated the discriminatory advertising provisions of the Fair Housing Act by advertising its apartments as being available to female BYU students only. See 42 U.S.C.A. § 3604 (c). GIP, who was under contract with Brigham Young University (BYU) to provide off-campus housing for BYU students, advertised its apartments as being available to female BYU students only. Under the BYU off-campus housing policy, certain apartment complexes are required to rent apartments only to male students, while others are required to rent only to female students.   

           

Under the implementing regulations to Title IX, educational institutions and private landlords are permitted to provide sex-segregated housing to students through “solicitation, listing, approval of housing, or otherwise.” 45 C.F.R. §86.32 (c)(2) (1993). Because such gender segregation is legal, the court determined that the advertising of these legal practices were also legal.

 

  •  In addition, Wilsonclaimed that GIP refuses to rent to individuals with children. Although the court recognized that this practice would be a violation of the FHA, the court determined that Wilson did not have standing to bring their familial status claim against GIP because Wilson had no children of his own. See Lujan v. Defenders of Wildlife, 504U.S. 555, ----, 112 S.Ct. 2130, 2136 (1992) (must have an actual or threatened injury).

 

  • The court also recognized that the FHA does not prohibit rental practices that discriminate against statuses not protected by the Act - - including a person’s status as a student or non-student. See Lee v. Minnock, 417 F. Supp. 436, 439 (W.D. Pa. 1976), aff’d, 556 F. 2d 567 (3d Cir. 1977) (noting the “Fair Housing Act does not include in its proscription discrimination upon the basis of occupation.”).

Phrase “one child” in an ad for rental of a townhouse violates Fair Housing Act by expressing a preference based on familial status. HUD v. Wilkowski, (HUD Office of Admin. Law Judges 1993).

 

Administrative law judge orders respondent to pay $2,500 civil penalty after default judgment on a charge that he violated the Fair Housing Act by advertising a condominium unit for sale with the phrase “No pets or children allowed.” HUD v. Lange, (HUD Office of Admin. Law Judges10-23-95).

 

Developers and advertising agency pay $325,000 to settle lawsuit alleging that they used only white human models in ads for Maryland housing development. Spann v. Potomac Investment Associates, No. CIV. 87-1154 (D.D.C.9-7-89).

 

Developer and advertising agency agree to $155,000 settlement of a lawsuit alleging that the use of all-white models in advertising for a Baltimore condominium complex was racially discriminatory in violation of fair housing laws. Robinson v. Harbor Court Assocs, No. HAR-90-991 (D.Md.10-31-90).

 

Advertising firm agrees to $150,000 settlement in lawsuit alleging that it prepared ads that included only white human models. Spann v. Gerstin, No. 86-3196-HHG (D.D.C.3-30-92).

 

Fair housing group accepts $155,000 settlement in lawsuit alleging that condominium’s ads depicting white human models, but no blacks, discriminated on the basis of race. Robinson v. John Hancock Realty, (D.Md.10-28-92).