Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving discrimination to avoid a similar legal showdown happening to you in your everyday real estate career. And be sure to have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a court battle over fair housing regulations.

A Real Estate agent was hired by a landlord to lease a two-story townhouse that had one bedroom on the first floor and two bedrooms on the second floor, which was also where the only full bathroom was located. The first applicant to view the property informed the agent that his wife was physically disabled and would require accommodations so that she could access the second floor bathroom. He informed the agent that he was willing to make arrangements to have a chairlift installed and provided the required security deposit together with the fee for a credit check.

Problem
Despite the fact the background check revealed that the applicant had an excellent credit rating, the landlord refused to rent the apartment because he did not want the applicant to install the chairlift or otherwise make physical changes to the property. He instructed the agent to inform the applicants that he decided to lease to someone else, even though there were no other applicants.

Mistake
When the agent conveyed the intentions of the landlord, it was a clear violation of Title VII of the Civil Rights Act of 1968, as amended by the Fair Housing Act of 1988.

Result
The applicant sued the landlord and the agent alleging that they discriminated against him and his wife when they were denied the opportunity to lease the property because of her physical disability. Their allegations were bolstered by the fact that the rental unit remained vacant for nearly four months after being informed that it was leased to someone else. Moreover, the eventual tenant testified that she became interested in the property at a date later than the complainants. After incurring thousands of dollars in legal fees, the case settled on behalf of the agent without the agent admitting liability.

Prevention
Prohibited practices that lead to fair housing claims include the refusal to rent, lease or negotiate; offering different terms or affording different treatment; keeping records describing clients/customers; and failing to make reasonable accommodations. Providing equal service to all and not making assumptions of your client’s preferences will reduce the possibility of discrimination claims. And, as evidenced in this case, working with a discriminatory landlord can lead to claims alleging civil rights violations.

Do you have a similar story involving fair housing and discrimination to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!

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