National Real Estate Practice Exam

According to the Federal Fair Housing Act, which of the following is an exception?

1. Real estate owned by public entities

2. For-sale-by-owner transactions of multi-family units

3. Real estate marketed to low-income buyers

4. Properties operated by non-profit organizations

The correct answer is: For-sale-by-owner transactions of multi-family units

The Federal Fair Housing Act aims to eliminate discrimination in housing based on race, color, national origin, religion, sex, familial status, and disability. However, it does provide specific exceptions under certain circumstances. In the case of for-sale-by-owner transactions involving multi-family units, the act does offer an exception for property owners who are selling or renting their own units without the assistance of a real estate agent. This means that if an owner of a multi-family property chooses to sell one or more units themselves, they may not be subject to the same fair housing regulations that apply to professional real estate transactions. This is particularly relevant for small-scale landlords who are renting out a few units. In contrast, real estate owned by public entities, properties marketed to low-income buyers, and properties operated by non-profit organizations are generally subject to the provisions of the Fair Housing Act and are not considered exceptions. These types of properties are closely monitored to ensure compliance with fair housing laws, promoting equal opportunity for all individuals regardless of their background. Understanding this exception is crucial for anyone involved in real estate transactions, as it highlights the nuances of the Fair Housing Act and the circumstances in which certain rules may not apply.