Question from a Blog Reader
"I have heard that Fair Housing civil penalties have gone up again this year for violations, but I cannot find the new numbers. Where can I find them?"
Answer
Summary: The Fair Housing civil penalties did go up in 2021, and the new numbers can be found in the Federal Register
HERE.
During the pandemic, HUD tells us that complaints of housing discrimination are up. Conscientious owner/agents want to avoid discrimination in any form, ideally because it is the right thing to do. However, a healthy respect for the penalties that can be levied against violators of the Fair Housing Act also realistically provides some motivation!
On March 16, 2021, the U.S. Department of Housing and Urban Development (HUD) published new inflation-adjusted civil penalty amounts for individuals or entities that have been found to have violated a variety of different housing-related laws, including the federal Fair Housing Act. The new civil penalty amounts apply to violations that occur on or after April 15, 2021.
Under the revised amounts, a violator ("respondent") can be assessed a maximum civil penalty of $21,663 for a first violation of the Fair Housing Act. If they had violated the Fair Housing Act in the previous 5 years and are again in violation, they can be fined a maximum of $54,157, and respondents who had violated the Act two or more times in the previous 7 years can be fined a maximum of $108,315 upon another violation.
Please note that these civil penalty amounts are only the portion levied by the government of the overall cost of Fair Housing violations. Think of the speeding ticket a person gets for violating speeding laws. A person who speeds is additionally subject to lawsuits by persons injured by the person's mishandling of a vehicle. Similarly, when the Fair Housing Act is violated there are civil penalties, but people also suffer injury and there are likely actual damages, attorney’s fees, and other costs that may be awarded to someone who has experienced housing discrimination.
Prior to this adjustment, the 2020 penalty amounts were $21,410 for a first violation, $53,524 for a second violation, and $107,050 for a third violation.
Looking for quality online on-demand Fair Housing training? Check out Fair Housing Fundamentals and Fair Housing Fundamentals for Maintenance Professionals. More information on these courses is HERE.
There is a very good chance that the topic of this post is covered in an online on-demand course at Costello University.
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Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act), prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing related transactions, because of race, color, religion, sex (including gender identity and sexual orientation),
familial status, national origin, and disability. In "Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions", the U.S. Department of Housing and Urban Development ("HUD") urges housing providers to exercise caution when implementing criminal history policies or
practices used to make housing decisions. The Fair Housing Act generally prohibits five different types of discrimination in the sale and rental of housing: In addition to prohibiting specific practices involving the sale or rental of dwellings, the Fair Housing Act also prohibits redlining, including discrimination in financing and insuring of housing, as well as discrimination in access to other services, organizations, or facilities that relate to the business of selling or renting dwellings. To learn more about how real estate professionals can comply with the Fair Housing Act, download this
free chapter of Real Estate Brokerage Essentials. Noncompliance with fair housing laws is a risk that responsible real estate professionals simply cannot assume as a cost of doing business. A person who believes they are a victim of a discriminatory housing practice may bring an action directly in
federal court and recover actual and punitive damages, as well as reasonable attorney fees and costs. In addition, an aggrieved person may file a complaint with HUD, which may bring an administrative proceeding against the respondent. As of April 15, 2021, a person may be assessed a civil penalty of up to $21,663 for their first violation of the Fair Housing Act. The maximum penalty increases to $54,157 for a person who violated the Fair Housing Act in the previous five years, and violating the
Fair Housing Act two or more times in the previous seven years brings a maximum fine of $108,315. Monetary damages, attorney fees and costs, and civil penalties are in addition to the significant reputational damage that a real estate professional can suffer for engaging in discriminatory practices. NAR offers a myriad of resources, including the
Fairhaven simulation training, specific tips for avoiding discriminatory practices, and a collection of articles, websites and more. With disparate impact, it is possible that making housing
decisions based on an applicant’s criminal background may violate the Fair Housing Act Legal
What is the Fair Housing Act and what does it cover?
Why is fair housing so important for REALTORS®?
What are the penalties for violating the Fair Housing Act?
Where can I learn more about complying with the Fair Housing Act?
Can denying housing based on criminal history violate the Fair Housing Act?
What does the Fair Housing Act say about criminal history?
HUD's guidance comes on the heels of the Supreme Court's 2015 decision, which held disparate impact claims are cognizable under the Fair Housing Act.1 While persons with criminal records are not a protected class under the Act, HUD stresses that criminal history-based barriers to housing have a statistically disproportionate impact on minorities, which are a protected class under the Act, and as such, creating arbitrary or blanket criminal-based policies or restrictions could violate the Fair Housing Act ("FHA" or "Act"). To be clear, HUD's guidance does not preclude housing providers from crafting criminal history-based policies or practices, but the guidance makes evident that housing providers should create thoughtful policies and practices that are tailored to serve a substantial, legitimate, and nondiscriminatory interest of the housing provider, such as resident safety or the protection of property.
HUD includes context for its guidance, and offers statistical evidence that the United States minority population experiences arrest and incarceration at rates disproportionate to their share of their population. For instance, HUD asserts that in 2014, African Americans were incarcerated at a rate nearly three times their proportion of the general population.
In the context of criminal history policies or practices, disparate impact liability is determined using a burden-shifting framework that first requires a plaintiff or HUD to prove that the criminal history policy or practice has a discriminatory effect, meaning the policy or practice results in a disparate impact on a group of persons because of their race, national origin or other protected characteristic under the Act. In this step of the process, evidence must be provided that demonstrates that the criminal history policy or practice actually or predictably results in a disparate impact. If successful, the burden then shifts to the housing provider to show that the policy or practice in question is justified. Here, the housing provider must show that the policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest of the housing provider, and further, that the policy or practice actually achieves that interest. Finally, if a housing provider is successful, the burden shifts back to the Plaintiff or HUD to prove that the housing provider's interest could be served by another practice that has a less discriminatory effect.
The determination of whether a criminal history-based policy or practice has a disparate impact in violation of the Act is ultimately a fact and case-specific inquiry. However, HUD's guidance provides insight into how to create a legally defensible policy that does not violate or frustrate the FHA's prohibition on the discrimination in the sale, rental or financing of dwellings or in other housing-related activities. We recommend review of HUD's guidance, but have distilled that guidance to assist in reviewing existing criminal history-based policies or practices or in the creation of a new one.
1 Texas Dep't of Hous. & Cmty Affairs v. Inclusive Cmtys Project, Inc., 135 S.Ct. 2507 (2015).
2 42 U.S.C. 3607(b)(4).