For aspiring real estate professionals in the Free State, mastering fair housing laws is not just about passing the licensing exam—it is the bedrock of ethical, legal, and professional real estate practice. Because state laws often expand upon federal protections, candidates must understand where federal law ends and state law begins. This mini-article covers the Fair Housing Act key provisions you need to know, serving as a vital companion to our Complete Maryland Exam Guide.

Federal vs. Maryland Protected Classes

To succeed on the Maryland real estate exam, you must memorize the protected classes under both the Federal Fair Housing Act (Title VIII of the Civil Rights Act of 1968) and the Maryland Fair Housing Law (Title 20 of the State Government Article).

Federal Protected Classes

The federal government protects seven distinct classes. A common mnemonic used by exam candidates is FReSH CoRN:

  • Familial Status (protects pregnant women and families with children under 18)
  • Race
  • e
  • Sex (expanded by HUD to include sexual orientation and gender identity federally, though MD codified this earlier)
  • Handicap (Disability)
  • Color
  • o
  • Religion
  • National Origin

Maryland's Additional Protected Classes

Maryland law goes further than federal law, strictly prohibiting discrimination based on four additional state-specific protected classes. You will almost certainly see a question about these on your exam:

  • Marital Status: You cannot discriminate against someone because they are single, married, divorced, or widowed.
  • Sexual Orientation: Protected under Maryland law since 2001.
  • Gender Identity: Added to Maryland's protected classes in 2014.
  • Source of Income: Effective in 2020, landlords and sellers cannot discriminate against buyers or tenants based on their lawful source of income. This includes housing choice vouchers (Section 8), alimony, child support, and disability payments.

Typical Fair Housing Complaints in MD (%)

Key Prohibited Practices in Real Estate

The exam frequently tests your ability to identify prohibited fair housing violations through practical scenarios. Pay close attention to the definitions and examples of the following three major violations.

1. Steering

Steering is the act of guiding prospective buyers or renters toward or away from specific neighborhoods based on their inclusion in a protected class.

Exam Scenario: A buyer with young children asks you to show them homes in "family-friendly neighborhoods with good schools." If you selectively show them homes only in certain areas based on your perception of family demographics, you are guilty of steering. Instead, you must show them homes in any neighborhood that meets their objective criteria (e.g., 3 bedrooms, under $400,000).

2. Blockbusting (Panic Peddling)

Blockbusting occurs when a licensee induces panic selling by suggesting that a certain protected class is moving into the neighborhood, implying that property values will decline as a result.

Exam Scenario: An agent distributes flyers in a Baltimore County neighborhood stating, "The neighborhood is changing fast! Sell now before your property values drop!" If this implies a demographic shift related to race, religion, or any other protected class, it is a severe blockbusting violation.

3. Redlining

Redlining is primarily a financial violation where lenders or insurance companies refuse to issue mortgages or policies in specific geographic areas based on the demographics of that area, rather than the applicant's financial qualifications.

Exam Scenario: A mortgage broker refuses to approve a loan for a qualified buyer simply because the property is located in an area with a high minority population. This violates both fair housing and equal credit opportunity laws.

Maryland Fair Housing Exemptions

While the Fair Housing Act is comprehensive, there are specific, highly tested exemptions. However, the Civil Rights Act of 1866 dictates that there are NEVER any exemptions for racial discrimination.

In Maryland, standard exemptions include:

  • Owner-Occupied Dwellings: Maryland law exempts the rental of rooms or apartments in an owner-occupied dwelling containing up to five (5) rental rooms (often distinct from the federal 4-unit "Mrs. Murphy" exemption).
  • Religious Organizations: May limit occupancy of housing they own to members of their own religion, provided membership in the religion is not restricted by race, color, or national origin.
  • Private Clubs: May restrict lodging to members, provided the lodgings are not operated commercially.
  • Senior Housing: "Housing for Older Persons" is exempt from familial status protections if it is solely occupied by persons 62 or older, or if 80% of the units are occupied by at least one person 55 or older.

Crucial Exam Rule: Exemptions are void the moment a real estate licensee is hired to assist in the transaction, or if discriminatory advertising is used.

Advertising and Fair Housing Compliance

When writing property descriptions, agents must focus on the property, not the people who might buy or rent it. Terms like "bachelor pad," "perfect for empty nesters," or "walking distance to the Catholic church" are red flags for discriminatory advertising.

For a deeper dive into how to market properties legally in the state, review our guide on Maryland advertising regulations compliance.

Ethical Conduct and Financial Equality

Fair housing isn't just about showing homes; it extends to how financial obligations are presented and handled. For example, failing to disclose upcoming community fees to certain buyers while disclosing them to others is a fair housing violation. To understand how these fees work, you can read our article on Maryland special assessments explained.

Ultimately, your duty as a Maryland real estate agent is to provide equal professional service to all. For more on your fiduciary and moral obligations, consult our study materials on Maryland real estate ethics and standards.

Enforcement and Penalties in Maryland

In Maryland, fair housing laws are enforced by the Maryland Commission on Civil Rights (MCCR). If a consumer feels they have been discriminated against, they have one year to file a complaint with the MCCR or HUD, and two years to file a civil lawsuit in federal or state court.

Penalties for licensees who violate fair housing laws are severe. They can include actual damages, punitive damages, attorney's fees, and disciplinary action by the Maryland Real Estate Commission (MREC), up to and including license revocation.

Frequently Asked Questions (FAQs)

What are the protected classes unique to Maryland that are not federally protected?

Maryland explicitly adds Marital Status, Sexual Orientation, Gender Identity, and Source of Income to its list of protected classes. (Note: HUD now interprets the federal "Sex" class to include sexual orientation and gender identity, but Maryland has explicitly codified them into state law).

Can a Maryland landlord refuse to accept Section 8 housing vouchers?

No. As of the 2020 expansion of the Maryland Fair Housing Law, "Source of Income" is a protected class. Landlords cannot refuse to rent to a tenant solely because they will be paying with a Section 8 Housing Choice Voucher or other lawful income sources.

Are real estate agents ever exempt from Fair Housing Laws in Maryland?

No. The moment a licensed real estate agent is involved in a transaction (leasing or selling), all fair housing exemptions (such as the owner-occupied exemption) are completely voided. Licensees must comply with fair housing laws 100% of the time.

Who enforces Fair Housing Laws in the state of Maryland?

The Maryland Commission on Civil Rights (MCCR) handles state-level complaints, while the Department of Housing and Urban Development (HUD) handles federal complaints. The Maryland Real Estate Commission (MREC) also enforces disciplinary actions against licensees who violate these laws.

What is the difference between steering and blockbusting?

Steering is directed at buyers or renters, guiding them toward or away from neighborhoods based on a protected class. Blockbusting is directed at sellers, inducing panic selling by claiming a protected class is moving into the neighborhood and will negatively affect property values.