Fair housing compliance can be tricky. The Fair Housing Act> (FHA; federal law), Pennsylvania Human Relations Act (PHRA; state law) and the NAR Code of Ethics (for Realtor® members) all apply to your real estate practice, but the rules of each are different in various ways. Those overlapping rules can sometimes make it all very confusing, but some of that confusion may be clearing up based on new regulations from the Pennsylvania Human Relations Commission.
The PHRA already prohibits discrimination regarding housing or commercial property based on a number of criteria, including race, sex and religious creed. But while those terms are used in the law and regulations, they haven’t been clearly defined – until now.
On Thursday, Dec. 8, the Independent Regulatory Review Commission approved new regulations that create detailed and broadly inclusive definitions of those terms. These new definitions will have the effect of increasing the number and types of individuals protected by the law, while also providing additional clarity to employers and housing providers about who is covered by these terms.
For example, the protected class of “sex” will now affirmatively prohibit discrimination based on an individual’s sexual orientation and/or gender (including their gender identity or gender expression), as well as providing protections for pregnancy and related medical conditions. The protected class of “race” will include ancestry, national origin and ethnic characteristics (such as skin color or other typical features of certain racial or ethnic groups). And the category of “religious creed” will include “all aspects of religious observance, practice or belief,” including sincerely held moral or ethical beliefs “held with the strength of traditional religious views” even if not part of an organized religious group.
This expansion is consistent with how the Code of Ethics, the FHA and other federal rules have evolved in recent years. For example, Article 10 of the NAR Code of Ethics was amended in 2011 to state that Realtors® would not discriminate based on an individual’s sexual orientation, and again in 2014 to prohibit discrimination based on gender identity.
At the federal level, a 2020 case from the U.S. Supreme Court held that protections based on “sex” should be read to cover things like sexual orientation and gender identity. Shortly thereafter, HUD announced that it would apply this same definition for housing-related discrimination, and the Biden administration issued a series of executive orders implementing that definition across the entire government.
So… what does this all mean to you as a real estate professional and a Realtor®?
The short, and obvious, answer is that you and your clients will always be better if you simply don’t stand for any level of discrimination in your real estate practice. Discrimination by a client or real estate licensee runs the risk of putting one or both on the wrong end of a messy and expensive enforcement action that’s clearly not going to be worth it for anyone.
The PAR Legal Hotline has taken calls about clients who have said things like “just make sure you don’t rent it to someone who is <blank>” or “before I accept this offer, can you tell me if they are <blank>?” If a client indicates that they want to make decisions about a transaction based on anything remotely related to a protected class, you have two options:
First, if the client is telling you that they think their decision is permitted because of some exception to the fair housing rules, tell them to speak with an attorney and get that in writing before they go any further down that path. Though there are certain exceptions, they are much narrower in Pennsylvania state law and the exception may not actually apply to their situation. And of course you should talk to your broker (and possibly brokerage counsel), because exceptions that may apply to the owner of a property don’t necessarily apply to you as a licensee and Realtor® – meaning that you might be violating the law or Code of Ethics, even if the client isn’t.
Your second option, if the client insists even when their actions don’t appear to be legal, is to talk to your broker about how to quickly and efficiently turn them into an ex-client. There is no “but my client said so” defense to a fair housing complaint, and once the client has shown a discriminatory intent that information could taint the rest of your interactions with the client and expose you to risk if any complaint later gets filed.