We are happy to introduce Lina Gallego, an Underwriter in our Professional Liability Department as a Guest blogger today! Lina is very knowledgeable in her position and has been a great asset to the Professional Liability Department since 2011.
Guest Blog: 5 Things You Need to Know About the Fair Housing Act
Property managers and real estate agents are often hired to protect properties, and preserve investments. They have to make crucial decisions on a daily basis, and despite the pre-established and objective criteria used to make these decisions, an allegation of a violation of the Fair Housing Act can be brought against the property manager or real estate agent. Commonly, General Liability policies don’t cover allegations of a violation of the Fair Housing Act, and many Professional Liability policies exclude allegations of a violation of the Fair Housing Act. It is important to understand the Fair Housing Act, who it affects, and how your client’s insurance responds to Fair Housing allegations.
What is the Fair Housing Act?
- The Fair Housing Act prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status and disability.
What are examples of a violation of the Fair Housing Act: Based on race, color, national origin, religion, sex, familial status or handicap…
- Refuse to rent or sell housing
- Refuse to negotiate for housing
- Make housing unavailable
- Deny a dwelling
- Set different terms, conditions or privileges for sale or rental of a dwelling
- Provide different housing services or facilities
- Falsely deny that housing is available for inspection, sale, or rental
- For profit, persuade owners to sell or rent (blockbusting) or
- Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.
- Refuse to make a mortgage loan
- Refuse to provide information regarding loans
- Impose different terms or conditions on a loan, such as different interest rates, points, or fees
- Discriminate in appraising property
- Refuse to purchase a loan or
- Set different terms or conditions for purchasing a loan.
Who is liable? Who does the Fair Housing Act apply to?
- All employees, supervisory staff and partners of the property management company are potentially liable where discrimination is found
- All parties involved in a real estate transaction, including agents, brokers, manager and owners are potentially liable where discrimination is found
What are potential consequences if an allegation of a violation of the Fair Housing Act is brought against the property manager or real estate agent?
- Considerable monetary damages against the defendant
- Blocked sale or rental of a unit
- Loss of real estate license
- Awarded attorney’s fees
- Defense and settlement costs exceeding $1,000,000
What do statistics say about Fair Housing Complaints:
- Over 25,000 complaints are filed every year
- The number of complaints is increasing as is the number of non-profit fair housing orgs.
- A conservative estimate puts the number of violations of fair housing laws at four million every year
- Most courts have agreed that the defendant should bear the burden of proof
- Defense and settlement costs can easily exceed $1,000,000
- The most common type of complaint is discrimination in the terms, conditions, privileges, services or facilities for the sale or rental of housing
Property managers and real estate agents respond to the need of prospects, tenants, property owners, sellers, buyers and investors. Keeping all parties content may prove to be impossible at times, which is why having suitable insurance is vital to the longevity of their business.
