Steering

An agent has an elderly buyer looking for a condominium. The agent only showed the buyer properties in condominium associations designated as housing for older persons. Is this possibly illegal steering? 

Steering in real estate generally occurs when a licensee guides or directs a buyer to certain properties based on the buyer’s race or protected class status. In the above scenario, if this buyer did not request showings of only housing for older persons, the broker may be engaged in illegal steering. To avoid claims of illegal steering, buyers should be provided with information about a variety of neighborhoods and homes within their price range and then be permitted to choose where to look and, ultimately, where to live. REALTORS^® should never assume that any area is off limits to anyone based upon their race, color, national origin, ethnicity, religion, disability or any other factor that is treated under fair housing law as a protected class. REALTORS^® may “steer” buyers to properties as long as they are guiding buyers to properties that match the qualifications, search parameters, property features and specified needs that the buyers have designated. Fair housing is about choice. For more information on illegal steering, see the April 2007 Legal Update, “Avoiding Discrimination in Advertising and Racial Steering,” at www.wra.org/LU0704.

Safety or discrimination?

The seller of a waterfront property instructed her agent that no children can be present at showings of the property. The seller said this request is due to liability concerns because she lives on a lake. Is this legal?

Although the seller may be concerned that children would damage the property, be disruptive or possibly be harmed by the proximity to the lake, this type of prohibition may not be the best way to accomplish the seller’s objectives. If the seller excludes children from showings and open houses, this may indirectly send the message that families with children are not welcome or desired as purchasers. This might result in de facto discrimination where the actual effect was not the intended result but is nonetheless illegal.

The listing contract provides on lines 174-182 the seller is to prepare the house to minimize the likelihood of injury, theft or property damage. Storing valuable items and monitoring attendees may serve this purpose. The seller may wish to put up signs asking people to take caution when near the lake. Any language, including the private remarks section of the MLS, that specifically makes mention of children should be avoided.
For more information about fair housing, visit the WRA’s Fair Housing — Equal Opportunity Resources page online at www.wra.org/fairhousing.

Fair housing and real estate advertising

An agent took out advertisements in the local newspaper and homes magazine. The agent said she specialized in a certain community where “two-bedroom condos are kings for singles.” Is this sort of language in real estate advertising considered a fair housing violation? 

It is a violation of the Fair Housing Act “[t]o make, print, or publish, or cause to be made, printed or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.” 

While the agent was not referring to a specific dwelling, the specificity of “two bedroom condos” in a certain town could be seen as advertising for two-bedroom condominiums in that town. Stating that two-bedroom condominiums were “king” for singles could be interpreted as indicating a preference, limitation or discrimination based on familial status in that it may indicate a preference for those without children. 

Wis. Stat. § 106.50(1m)(ad) defines advertise as “to publish, circulate, issue or display, or cause to be published, circulated, issued or displayed, any communication notice, advertisement or sign in connection with the sale, financing or rental of housing.”

Wis. Stat. § 106.50(1m)(h) defines discriminate as “to segregate, separate, exclude, or treat a person or class of persons unequally” because of “sex, race, color, sexual orientation, disability, religion, national origin, marital status, family status, status as a victim of domestic abuse, sexual assault, or stalking, lawful source of income, age, or ancestry.”

Wis. Stat. § 106.50(1m)(nm) defines “member of a protected class” to include marital status.

A broker is working with a potential buyer and reviewed ads for real estate listings on Facebook. The broker found an ad showcasing a property that meets the buyer’s requests. The ad for this property included the language “family-friendly,” as well as “close to schools and zoo.” Are these phrases legal under fair housing law? 

While Wisconsin has not prohibited the use of specific phrases in advertisements, some states have clearly forbidden their use. Because the use of the term “family-friendly” may imply a preference for those who have children, a licensee may reconsider the use of the term in an advertisement. It would be far better to describe the features of the community and the property than use a label that may have different meanings or implications.

The National Association of REALTORS^® (NAR) has provided guidance regarding words and phrases it believes do not discriminate as well as words and phrases that are questionable and may discriminate. One term that many REALTORS^® believe they should always avoid is “family.” REALTORS^® should not say that “families with children” aren’t welcome to rent or buy, but it is acceptable to market features such as “family” rooms. REALTORS^® clearly should ensure they don’t use the term in a manner that suggests that certain buyers may not be welcome.

The broker reviewed real estate advertising placed by agents in the firm. One agent placed ads in the local church bulletin: one ad in the church bulletin stated the property is close to a local school, while another ad in the bulletin stated that the property was a “great starter home.” Did the agent violate fair housing law by placing the ads within the church’s publication? 

When advertising in a church bulletin or any religious publication, the broker should be careful to avoid fair housing law violations. Limiting ads to publications that are distributed to a select audience may violate fair housing law. For example, advertising in a publication targeting older people may be interpreted as discriminating against families with children.

Brokers should avoid strategies that target less than the whole market, such as advertising to a discrete population, in a limited geographic area, or in publications that are designed primarily for certain religious or ethnic groups.

Advertising must not intentionally or unintentionally state a preference for a person or the intent to exclude a person based upon membership in a protected class. This applies to advertising by both real estate licensees and sellers, and covers all media including the MLS, newspapers, billboards, the internet, faxes, email, radio, television, fliers, signs, posters, banners and application forms.

A good rule of thumb is to ask: What is the real message of the ad? Does the ad exclude any groups? Does the ad describe the property and not the target market? 

The following are some helpful advertising guidelines for advertising:

• Avoid strategies that target less than the whole market.
• Do not direct an ad to only one segment of the community.
• Do not advertise in a limited geographic area.
• Do not use particular publications or editions of newspapers.
• Do not use only small-circulation publications that are designed primarily for certain religious or ethnic groups.

See the U.S. Department of Housing and Urban Development’s do’s and don’ts of advertising guidelines at www.hudhomenetwork.net/sites/default/files/Documents/HUD-Advertising-Guidelines.pdf.
For more information, visit the WRA’s Fair Housing — Equal Opportunity Resources page online at www.wra.org/fairhousing as well as the April 2007 Legal Update, “Avoiding Discrimination in Advertising and Racial Steering,” at www.wra.org/LU0704.

Client violation of fair housing law

A seller-client posted on social media and tagged the agent in the post. In the post, the seller makes reference to a preferred type of buyer based on familial status — a violation of fair housing law. The post reads, “Our house is up on the MLS XXXX today! Perfect for a couple with children. 1.3 acres to run and play with the dog! Check it out and tell your friends! Thanks Amy Agent for listing it with XYZ Realty!” Does the agent have an obligation to ask the seller to remove or edit the post, or to remove the agent’s tag in the post?

Whether the seller, who is not a real estate licensee, engages in advertising their property for sale is a matter of contract law. Per the WB listing contracts, unless modified, the seller gives the broker the exclusive right to market and sell the property. If the parties agree to have the seller engage in advertising, the listing may be modified. 

If the listing is modified and the seller engages in advertising, the broker may refer the seller to fair housing law and help educate the seller on how to avoid a fair housing violation. The broker may suggest limiting advertising to descriptions of the property and avoid describing the potential buyer. Advertisements may not contain limitations on the number or ages of children or state a preference for adults, couples, singles or families. Advertisements describing the properties, such as “two bedroom,” “cozy, family room”; services and facilities, such as “no bicycles allowed”; or neighborhoods, like “quiet streets,” are not facially discriminatory and do not violate the act.

In the event the seller advertises her property, the broker may remind the seller that the real estate listing also requires the seller to cooperate with the broker’s marketing efforts. In the event the buyer contacts the seller directly, the listing requires the seller to promptly notify the broker in writing of any potential buyers with whom the seller negotiates and to refer all persons making inquiries concerning the property to the broker. The broker may request the seller to promptly notify the broker of any discussions and the content thereof and remind the seller that the only price at which the broker may offer the property is that which is in the listing contract to avoid different messages to potential buyers.

For further discussion, see pages 2-8 of the April 2007 Legal Update, “Avoiding Discrimination in Advertising and Racial Steering,” at www.wra.org/LU0704.

School district ratings

Are there any regulations or issues to be aware of about posting content from the Wisconsin Department of Public Instruction to a broker’s company website regarding school district ratings? 

How a licensee provides information or responds to inquiries about schools may raise fair housing concerns. Before updating the broker’s website, the broker may review materials discussing different perspectives. For a comprehensive summary of disclosure rules as they relate to school information, see “It’s Report Card Time,” in the November 2012 Wisconsin Real Estate Magazine at www.wra.org/WREM/Nov12/ReportCard and the Department of Public Instruction resources at dpi.wi.gov/standards. Also see NAR’s analysis in the article “Steering, Schools, and Equal Professional Services,” at www.nar.realtor/articles/steering-schools-and-equal-professional-service.

Tracy Rucka is Director of Professional Standards and Practices for the WRA.