Real Estate Advertising Part II: Big Brother is Watching

In my last post, I discussed discriminatory terms and uses in real estate advertising. This is an example of a Pennsylvania property owner who was prosecuted by the U.S. Department of Housing and Urban Development for using discriminatory terms and practices.

This situation involves the management of a rental property in suburban Philadelphia. To protect the not-so-innocent, I will refer to the property owner as Mainline Jane. Jane owned apartments that she liked to rent to college students, so like any savvy marketer, she posted advertisements on craigslist.com. The advertisements included, among other things, the statements "for 2 upper class college students … no pets/children." The reference to upper class college students, alone is not a violation. However, the reference to no children clearly violates the Fair Housing Act's prohibition against discriminating based on familial status.

HUD initiated this prosecution after receiving a complaint from a regional fair housing organization ("FHO"). As part of its investigation, the FHO conducted a campaign to test Jane's response to different types of potential tenants. In the first test, a single mother of a four-year-old child went to visit the apartment. Jane asked the tester whether she was a single parent and "what happened." Jane also told the tester that the apartment was not convenient for children because of the stairs. Jane told a second tester, who was a student living with her husband, that "this is not for a family, single students, sorry." Here, both testers faced familial status discrimination.

In a second test, a single mother of a seven-year-old child emailed Jane about renting the apartment. Jane's response was "this is for students, not for a family, sorry." When contacted by a second tester, who was a married woman, Jane replied, "Are you a student? If so, please call …." Can you see a pattern developing?

In a third test, Jane told the first tester, a single mother of a five-year-old child, that the apartment would not be convenient for children because of the stairs. However, when told the child might move in with the child's father, Jane told her to call to make an appointment to view the apartment. Tester number two was a single female college student with a roommate who was also a college student, and Jane offered to show her the apartment.

Jane becomes a bit bolder in her discrimination for the fourth test. The first tester was a single mother of a four-year-old child, whom Jane told, "Sorry young children not allowed." So much for Jane attempting to justify her discrimination under the pretext of the convenience or safety of children. The second tester was a college student with a college student roommate. Tester two was told the apartment was available, and was a "nice place for students, all students, only students." Again, Jane clearly demonstrates her discriminatory policy of not renting to families with children.

HUD requested that Jane's discriminatory practices be declared a violation of the Fair Housing Act, that a civil penalty be assessed against Jane (this can total in the tens of thousands of dollars in some cases), and that damages be awarded to the FHO for the resources diverted and expenses incurred to investigate the matter. As you can see, you can face serious consequences for illegally discriminating against real estate consumers.

Attorney with Caldwell & Kearns, which serves as general counsel to PAR. He routinely provides advice and counsel to real estate licensees as one of the voices of the PAR Legal Hotline. A substantial portion of his practice is dedicated to providing counsel on real estate matters and representing real estate salespersons and brokers in civil lawsuits. He may be reached at realcompliance.com.