National Real Estate Exam (PSI)Practice of Real EstateHard
An owner who lives in one unit of a duplex rents out the other unit and personally decides not to rent to families with children, without using any advertising or agent assistance. Under the Federal Fair Housing Act, this situation is best described as:
- APotentially exempt under the owner-occupied dwelling exemption
- BAutomatically legal because duplexes are not covered by fair housing law
- CA clear violation with no exceptions available
- DIllegal only if the owner uses a real estate agent
Show answer & explanationAnswer & explanation
Correct answer: A. Potentially exempt under the owner-occupied dwelling exemption
The Fair Housing Act includes a limited exemption for owner-occupied buildings with no more than four units (often called the 'Mrs. Murphy' exemption), provided the owner does not use discriminatory advertising or an agent. This may exempt the owner from familial status claims, though not from all forms of discrimination in some states.
Why the other options are wrong
- B. Duplexes are generally covered by the FHA except under specific narrow exemptions.
- C. An exemption may apply here, so it is not automatically a clear-cut violation.
- D. Using an agent would actually void this exemption, not create the violation itself.
Owner-Occupied Exemption (Mrs. Murphy Rule)
A limited FHA exemption allowing owners of buildings with four or fewer units, who live in one unit, to make certain rental decisions without full FHA liability, provided no discriminatory advertising or agent is used.
- Applies only to buildings with 4 or fewer units where owner resides
- Discriminatory advertising is never exempt
- Does not exempt race discrimination under the Civil Rights Act of 1866
Memory trick: Mrs. Murphy lives next door and picks her own neighbor.