Fair housing exemptions and the Civil Rights Act of 1866
The federal Fair Housing Act has a few narrow exemptions. Exam questions usually test the conditions, because breaking any one of them removes the exemption.
The two owner exemptions (3603(b))
1. Single-family house sold or rented by its owner
| Condition | Rule |
|---|---|
| Houses owned | The private owner owns no more than three single-family houses at one time |
| Recent sales | If the owner was not living in the house (or was not its most recent resident), the exemption covers only one sale in any 24-month period |
| No broker | No real estate broker, agent or salesperson, and no one in the business of selling or renting dwellings, is used in any manner |
| No discriminatory ad | No notice or ad that violates 3604(c) |
Using an attorney, escrow agent, title company or similar professional to complete the transfer of title does not end the exemption.
2. Owner-occupied small buildings
Rooms or units in a dwelling with living quarters for no more than four families living independently, if the owner actually lives in one of them. This is often called the "Mrs. Murphy" exemption.
What the exemptions do not cover
Both exemptions say "other than subsection (c)." The advertising ban always applies. An exempt owner still cannot publish an ad stating a preference based on a protected class.
Religious organizations and private clubs (3607(a))
- A religious organization, or a nonprofit it operates or controls, may limit dwellings it owns or operates for a noncommercial purpose to people of the same religion, or give them preference. This does not apply if membership in the religion is restricted by race, color or national origin.
- A private club not in fact open to the public, which provides lodging as an incident to its main purpose and not for a commercial purpose, may limit that lodging to members or prefer members.
Housing for older persons (3607(b))
Qualifying senior housing may exclude families with children. The familial status rules do not apply to housing that is:
- intended for, and solely occupied by, people 62 or older; or
- intended and operated for people 55 or older, where at least 80 percent of occupied units have at least one resident 55 or older, the community publishes and follows policies showing that intent, and it follows HUD's age verification rules.
This exemption covers familial status only. Senior housing still may not discriminate based on race, disability or any other class.
The Civil Rights Act of 1866
Long before 1968, Congress passed what is now 42 U.S.C. 1982. It says all citizens have the same right as white citizens to inherit, purchase, lease, sell, hold and convey real and personal property.
Two points matter for the exam:
- It is about race. Courts have read it to bar racial discrimination in property transactions, private as well as public.
- The statute contains no exemptions. So an owner who fits a Fair Housing Act exemption still cannot refuse to sell or rent because of race.