Tennessee Fair Housing Guide for the Real Estate Exam

# Tennessee Fair Housing Guide for the Real Estate Exam

Fair housing law is tested on both sections of the Tennessee PSI exam. You must know the federal Fair Housing Act thoroughly, plus understand how Tennessee's regulations interact with federal law.

The Federal Fair Housing Act (1968)

The Fair Housing Act prohibits discrimination in housing transactions based on seven protected classes:

1. Race
2. Color
3. National origin
4. Religion
5. Sex
6. Familial status (families with children under 18, pregnant women, people seeking custody of children)
7. Disability (physical or mental impairment that substantially limits a major life activity)

The Act covers sales, rentals, advertising, financing (mortgage lending), and the terms and conditions of any housing transaction.

Prohibited Practices

Steering: Directing buyers toward or away from specific neighborhoods based on protected class characteristics. Example: telling a buyer of a particular religion that they "would be more comfortable" in a different neighborhood.

Blockbusting: Inducing homeowners to sell by suggesting that a protected class is moving in and will drive down property values. This is also called panic selling or panic peddling.

Redlining: Refusing to make loans or provide insurance in areas based on the racial or ethnic composition of the neighborhood. Primarily a lending industry violation.

Discriminatory advertising: Publishing ads that express any preference, limitation, or discrimination based on a protected class. The phrase "ideal for couples" implies discrimination against familial status.

Exemptions to the Federal Act

• Owner-occupied buildings of 4 or fewer units (Mrs. Murphy exemption)
• Single-family homes sold or rented without a broker and without discriminatory advertising
• Qualifying religious organization housing
• Private clubs' housing for members

Critical: These exemptions do not apply to licensees acting in a professional capacity.

Tennessee State Fair Housing Law

Tennessee's Human Rights Act adds protection beyond federal law. Tennessee prohibits discrimination based on race, creed, color, religion, sex, national origin, and disability in housing. While this largely mirrors federal law, Tennessee has its own enforcement mechanism through the Tennessee Human Rights Commission.

Unlike some other states, Tennessee does not add source of income or sexual orientation as protected classes at the state level for housing (though local ordinances may differ).

ADA and Disability Accommodations

Under the Fair Housing Act, landlords must: - Allow disabled tenants to make reasonable modifications at the tenant's expense - Make reasonable accommodations in rules or policies for disabled tenants (e.g., allowing a service animal in a no-pets building)

Landlords cannot ask about the nature of a disability or require medical documentation beyond what is necessary to evaluate the accommodation request.

Practice Scenario

A landlord in Memphis tells a property manager to "avoid renting to people with young children because they damage the property." What should the property manager do?

The manager must refuse to follow this instruction. Families with children under 18 are a federally protected class under familial status. Following this policy would be a Fair Housing Act violation, and the property manager could face personal liability in addition to the landlord.