Sexual Orientation, Gender Identity Protected Classes in Real Estate

The U.S. Supreme Court issued a decision last year that broadens the scope of the term “sex” as used in federal anti-discrimination laws to provide protection for members of the LGBTQ+ community. Following that decision, HUD announced that its offices would interpret, administer and fully enforce the Fair Housing Act to prohibit discrimination because of sexual orientation and gender identity. Based on this interpretation, sexual orientation and gender identity are protected classes under the Fair Housing Act, which applies to the sale or rental of all housing, lending, occupancy rules and advertising, with very limited exceptions.

The case in question before the U.S. Supreme Court was Bostock v. Clayton County, Georgia, which addressed the claims of individuals against their former employers who fired them simply for being members of the LGBTQ+ community. The individuals claimed that their firings were unlawful discrimination on the basis of sex because they were punished for behavior or characteristics that would have been tolerated and acceptable in an employee of a different gender. The court agreed with this argument and stated that “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”

In January 2021, President Biden issued a series of executive orders, including the Order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation. Citing the recently-decided case of Bostock v. Clayton County, it states that “[p]eople should be able to … secure a roof over their heads without being subjected to sex discrimination. All persons should receive equal treatment under the law, no matter their gender identity or sexual orientation.”

The order goes on to direct the head of each federal administrative agency to review their own policies, programs and regulations which prohibit sex discrimination and consider whether it would be appropriate for them to revise or suspend agency actions or create new procedures, as may be necessary to fully prohibit sex discrimination.

Although Bostock is an employment law case, the protected classes in federal employment laws are similar to those listed in the Fair Housing Act, which prohibits discrimination in the sale, rental and financing of housing based on one’s race, color, religion, or national origin, sex, handicap or familial status. HUD concluded that “the Fair Housing Act’s sex discrimination provisions are comparable to those of [federal employment law] and that they likewise prohibit discrimination because of sexual orientation and gender identity.” HUD explained that this interpretation applies to certain state and local programs, as well, since the laws that establish those programs at the state and local level must be “substantially equivalent” to the Fair Housing Act.

In Pennsylvania, several municipalities prohibit discrimination based on one’s sexual orientation or gender identity, as does the Realtor® Code of Ethics. However, this interpretation of the Fair Housing Act means that these protections are now the law of the land and applicable to most real estate transactions, regardless of the location and Realtor® involvement.