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Protective Laws in Real Estate

In the past ten years, new laws have been enacted that protect your rights as an American homeowner or homebuyer. As a result of these laws, you now have rights that didn't exist before. It is up to you to learn what these rights are so you can ensure they aren't taken away or stomped on.

The Big One: The Fair Housing Act
This law protects more than just fair purchasing conditions. It covers all your real estate civil rights.

The Department of Housing and Urban Development (HUD) administer this law. It is the overall discrimination law. It states that it is unlawful to discriminate against a person based on race, color, religion, sex, handicap, familial status or national origin. It also covers discrimination against anyone who is friends with or close to anyone who falls under those protected classes listed above. This is the fraternization part of the law that many people miss.

The law prohibits:

  • Refusing to sell, rent or negotiate with any person.
  • Making a dwelling unavailable for discriminatory purposes.
  • Practicing discrimination in any form, including advertising or statements.
  • Differentiating the terms, conditions or services for discriminatory reasons.
  • Representing a property as unavailable when it is.
  • Altering the conditions or terms of a loan for any reason related to the home if done so for the purpose of discrimination.
  • Making a profit by encouraging owners to sell because of members of a protected class above moving into the neighborhood.
  • Denying participation in or limiting the role in any real estate organization as a means of discriminating.
  • Discriminating against families with children (i.e. the "familial status" portion of the law).

    Let's take a closer look at some of the exemptions to these rights so you have the whole story:

    1. Housing designated for elderly residents can turn away children.

    2. Handicapped individuals who are covered by the law include people with AIDS and other serious illness and disabilities, but those individuals who are addicted to controlled substances are not included in the protection.

    3. The law does not cover homes for sale or rent when owned by an individual who owns fewer than three homes at one time, does the sale alone without an agent or broker, and when discriminating advertising is not used.

    4. Units owned by religious groups may be restricted to people of the same religion, but cannot discriminate any further within that group.

    5. If a private club that is not open to the public owns the unit, they may restrict the rental of the facilities to members as long as the units are not operated commercially. However, the club cannot discriminate when selecting its members.

    6. Owner-occupied dwellings or those that house from one to four families are exempted in the rental regulations.

    Source: Based on information gathered from HUD and The Motley Fool.

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