Application of State and Federal Fair Housing Laws to 1-4 unit buildings

I read that 1-4 unit buildings are exempt from the Federal Fair Housing Act. Is this true? If so, are they exempt from state fair-housing laws as well?

No. Be very careful! 1-4 unit buildings are not exempt from the Federal Fair Housing Act, but in some instances they do have fewer restrictions under fair housing laws.

Some of the crucial non-discrimination provisions of the Federal Fair Housing Act set out in 42 U.S.C. 3604, Section 804 do not apply to the rental or sale of rooms or units in 1-4 unit buildings where the owner actually occupies one of the rooms or units in the building. This limitation also applies to single-family residences where the owner does not reside, as long as the owner does not own more than three single-family houses at any one time. (This limitation is available for only one sale within any twenty-four month period, unless you are selling your primary residence.)

In both instances under federal law, for the limitation to apply, the units or rooms must be sold or rented by a private, individual owner (not a rental company, property management company or realtor). Further, in both of these situations the lessor/seller cannot put out any notice or advertisement, with respect to the sale or rental of the unit that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin.

California state fair housing laws (FEHA and the Unruh Act) are even more strict in that they prohibit discrimination in all housing accommodations except for: (1) the rental of a room in an owner-occupied single family residence to a single boarder (you must not put out any notices or advertisements related to the rental indicating any preference or discrimination) or, (2) the sharing of living spaces in a single family home advertised for the use by one sex.

The general rule is therefore simple: do not discriminate. However, if you are renting out space in your own home, you may select the tenant on the basis of any characteristics, but you should never advertise or post notices regarding the rental (even in you own home) that contains even a hint of discriminatory bias. When in doubt, contact your attorney.

By Sally Morin and James M. Millar of Millar & Associates (415)981-8100.