Fair housing violations are tested by scenario, and New York protects more classes than federal law does — including lawful source of income, which covers housing vouchers. Disclosure terms sit alongside these because both concern what an agent must say and must never say.
8 terms you need to know
- Blockbusting
- Illegal practice of inducing owners to sell by suggesting that the racial, ethnic, or religious composition of the neighborhood is changing. Prohibited under federal and NY fair housing law .
- Caveat Emptor
- “Let the buyer beware.” The buyer is responsible for inspecting property; the seller is generally not required to disclose patent defects, though NY law requires a Property Condition Disclosure Statement for most 1-4 unit residential sales.
- Fair Housing Act
- Federal law (42 U.S.C. §3601) prohibiting discrimination in housing based on race, color, religion, sex, national origin, familial status, and disability. NY adds additional protected classes.
- Fraud
- Intentional misrepresentation of a material fact to induce someone to act, causing damage. A serious licensing violation under Article 12-A.
- Property Condition Disclosure Statement (PCDS)
- NY-required disclosure form for most 1-4 unit residential sales. Failure to deliver allows the buyer a $500 credit at closing.
- Puffing
- Exaggerated opinion-based sales statements (“This is the most charming house in town!”). Not actionable misrepresentation unless they cross into false statements of fact.
- Source of Income
- A protected class under NY State Human Rights Law. Landlords cannot discriminate against lawful sources of income including Social Security, disability, child support, or housing vouchers.
- Steering
- Illegally directing prospective buyers or renters toward or away from particular neighborhoods based on protected class. Prohibited under fair housing law.
Commonly confused
Steering vs blockbusting
Steering directs buyers toward or away from neighbourhoods based on a protected class. Blockbusting induces owners to sell by suggesting the character of the neighbourhood is changing. Both are violations even where the client requested it.
Federal vs New York protected classes
New York protects more classes than federal law, including lawful source of income, marital status, age, military status and sexual orientation. Answer New York questions using the New York list.
Puffing vs fraud vs caveat emptor
Puffing is opinion and is permitted. Fraud is a knowing misstatement of material fact and is not. Caveat emptor has been narrowed in New York by the Property Condition Disclosure Statement requirement.
How this is tested
Keep studying
- Fair Housing in New York: Federal, State & NYC
- Source of Income Discrimination
- Free 10-question fair housing quiz
- Full NY Real Estate Glossary — all 161 terms
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