Real estate agents and non-discriminatory behavior toward consumers

As the primary gatekeepers for entry into real estate transactions, such as leases and sales, equal treatment by agents toward the public is crucial to success.

Everyone has an instant “feel” about an agent’s attitude. When their perception is other than getting fair treatment in their need for housing and financing, they become instant messengers of their negative encounter.

In 2021, a national total of 31,216 fair housing complaints became the highest amount of complaints since 2018. However, in the Pacific region, 7,814 fair housing complaints were reported — nearly a thousand less complaints in 2021 than the year prior, according to the National Fair Housing Alliance.

The national increase in fair housing complaints indicates implicit and explicit bias, and thus divisiveness is on the rise within the real estate industry outside the west coast — California. Consumers have had enough with rising adverse attitudes by filing their complaints.

Agents who are able to recognize and stop their discriminatory behaviors while counseling distressed clients, have trained themselves to behave for maximum success in serving consumers.

Discriminatory attitudes for agents to eliminate, include:

advertisements using words and images targeting a group of people as preferential;
inquiries into a potential or current tenant about their protected group status
;
failure to reasonably accommodate a disability;
sexual harassment in the process of handling a transaction;
mortgage or insurance applications rejected based on the agent’s personal bias against a particular group of people, not legal reasoning; and
refusal to rent, lease, mortgage, or sell housing by steering due to the consumer’s general classification.

Real estate agents need to voluntarily expose clients to opportunities available to view, rent, sell or finance property and leave it to the client to decide which suits their needs. The agent never decides what might be best for a client based on the client’s classification —that’s implicit bias. [DRE Reg. §2780(b)]

Real estate agents exercising personal discipline need to ask their clients legally permissible questions to enlighten the agents handling of a transaction, such as:

about the presence of pets;
how many tenants will occupy the property;
how many parking spaces will be required;
whether their present landlord will provide a favorable reference;
whether any of the tenants smoke;
the personal income of the tenant, credit references and credit rating; and
whether any of the tenants intend to use a waterbed in the premises.

To ensure equal treatment, real estate agents need to ask all their clients the same list of standard questions. Additionally, agents ought to limit inquiries to matters that are directly applicable to the clients’ tenancy, finances for creditworthiness, or the care and maintenance of the property.

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How agencies handle discrimination complaints

Consider a residential landlord renting their apartment complex to tenants. The landlord enters occupied apartments without permission and refuses to let female tenants have male guests. Worse, the landlord has a pattern of sexually harassing female tenants. The tenants filed a complaint stating sexual discrimination against females. After a hearing, an order is entered, barring the landlord from future discriminatory practices — such as entering an apartment without a 48-hour notice — and compensation for the tenants at $100,000. [United States v. Claiborne (No. S-02-1099 DFL DAD) (E.D. Cal.)]

An individual who is a member of a protected class and believes another person has discriminated against them for that reason may file a complaint with the Secretary of Housing and Urban Development (HUD). They have one year following the alleged discriminatory housing practice to file. To resolve the dispute, parties are encouraged to enter informal negotiations called mediation, at no expense to the individual.

When mediation fails to resolve the dispute, a judicial action before an administrative law judge may be initiated by HUD to resolve the dispute. Again, at no cost to the individual.

When a real estate broker subjected to a judicial action is found guilty of discriminatory housing practices, HUD is required to notify the California Department of Real Estate (DRE) and recommend disciplinary action.

When a court determines discriminatory housing practices occurred, actual and punitive amounts of money awards may be granted. Also, an order may be issued preventing the landlord or broker from engaging in discriminatory housing behavior.

Any individual with a discrimination complaint may elect to have the claims decided in a civil action in lieu of using an administrative law judge. [See RPI e-book Implicit Bias, Office Management & Supervision, Agency, Fair Housing, Trust Funds, Ethics and Risk Management Chapter 2]

To get on top of fair housing guidelines, take a look at our Implicit Bias, Office Management & Supervision, Agency, Fair Housing, Trust Funds, Ethics, and Risk Management e-book on Realtipedia.

Editor’s note – firsttuesday was the first to obtain DRE-approval for education by video presentation of the implicit bias training and expanded Fair Housing courses.

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