The Mom and Pop Exemption laws for Landlords
The Mom and Pop Exemption for Landlords.
Question
I own a duplex rental. I’m curious about the Mom and Pop Exemption, including why this exemption exists and is there any reason why I shouldn’t take advantage of the exemption?
Answer
The exemptions exists because they were required in order to get the necessary votes in Congress to pass Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act), as amended by the Fair Housing Amendments Act of 1988. In other words, some Senators and/or Representatives felt it important to exempt landlords in certain categories from certain provisions of the Act. As you will see from the following discussion, the often-called “Mom & Pop” exemptions are very
narrowly defined and have significant restrictions. Accordingly, landlords must be extremely careful when utilizing them.
Furthermore, even if the federal exemptions are properly used and there is not any conflicting state or local law that nullifies the exemption, a landlord is not immune against lawsuits by either tenants or government agencies who think that there has been discrimination. Also, some Federal Fair Housing provisions, most state and local fair housing laws, and other civil rights statutes still apply to “Mom & Pop” landlords. The costs of defending against discrimination claims on
the basis of the exemptions could be extremely costly even if the landlord eventually wins in court.
In review, Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act), as amended by the Fair Housing Amendments Act of 1988, (42 U.S.C. § 3601 et. seq) prohibits discrimination in housing and housing related transactions based on race, color, religion, sex, national origin, disability, or familial status.
The Department of Housing and Urban Development (HUD) enforces the Federal Fair Housing Act. HUD’s regulations state that: “It shall be unlawful, because of race, color, religion, sex, handicap, familial status, or national origin, to restrict or attempt to restrict the choices of a person by word or conduct in connection with seeking, negotiating for, buying or renting a dwelling so as to perpetuate, or tend to perpetuate, segregated housing patterns, or to discourage or
obstruct choices in a community, neighborhood or development. (24 CFR Part 14, Section 100.70(a)).”
A protected class is a group of people who share common characteristics and are protected from discrimination and harassment. Federal Fair Housing laws prohibit discrimination on the basis of these protected classes:
- Race
- Religion – personal beliefs, faiths, practices
- National origin – association of ancestry, culture, accent, spoken language or surname
- Sex
- Color – characteristics associated with certain races and ethnic groups
- Familial status – having a child under age 18 in the household, whether living with a parent, a legal custodian, or their designee. It also covers a woman who is pregnant, and people in the process of adopting or gaining custody of a
child or children - Handicap (Disability) – a physical or mental disability (including hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex and mental retardation) that substantially limits one or more major life activities, having a record of such a disability or are regarded as having such a disability.
The Fair Housing Act covers most housing. In some circumstances (note underlined words in the 3 exemptions that might be included within the “Mom & Pop” exemptions), the Act exempts:
- Single-family housing sold or rented without the use of a real estate broker or without the use of discriminatory advertising.
- Housing that is intended for and solely occupied by persons 62 years or older or a household with at least one person 55 years or older. To qualify at least 80% of the units must be occupied by at least one person 55 years or
older. Qualified senior housing is exempt only from the Familial Status. - The rental of a unit in a multi-family dwelling with four or fewer units where the owner (or a member of the owner’s family) lives in one of the units.
- The rental of a room or rooms in a private house where the owner (or a member of the owner’s family) lives in the house.
- Lodging owned or operated by private clubs which give preference to their members Religious, charitable, or educational institutions or organizations which are operated, supervised, or controlled by religious institutions or organizations that give preference in real estate transactions to their members, provided the organization does not exclude members of a protected category.
None of the above housing is exempt from Section 804(c) of the Act which states that you cannot make, print, or publish a discriminatory statement. In other words, a landlord cannot advertise their discrimination and the exemption doesn’t apply if a real estate agent is involved in any way. Any exempt housing that violates 804(c) has lost that exemption and can be held liable under the Act.
In the Sale and Rental of Housing, no one may take any of the following actions based on race, color, national origin, religion, sex, familial status, or handicap:
- Refuse to rent or sell housing
- Refuse to negotiate for housing
- Make housing unavailable
- Deny a dwelling
- Set different terms, conditions or privileges for sale or rental of a dwelling
- Provide different housing services or facilities
- Falsely deny that housing is available for inspection, sale, or rental
- For profit, persuade owners to sell or rent (blockbusting) or
- Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.
Fair housing laws of some states and some local jurisdictions define additional protected classes such as sexual preference, gender identity, occupation, income source, educational status, medical status, marital status, military background, political affiliation, or any other arbitrary reason.