The federal single-family home exemption is a limited exception for certain sales or rentals by private individual owners. Selling without a broker alone is not enough, and the owner does not have to live elsewhere to qualify.
For exam study, distinguish this exemption from the separate rule for small owner-occupied properties. The conditions below come from 42 U.S.C. § 3603(b).
Video correction: The owner is not required to be absent from the home. The 24-month limitation applies to the sales described in the statute, not to every use of the exemption. Use the written explanation below for these points.
What Is the Fair Housing Act?
The Fair Housing Act prohibits housing discrimination based on race, color, national origin, religion, sex, familial status, and disability. It covers most housing. See HUD’s overview for the federal protected classes.
When Does the Single-Family Home Exemption Apply?
The exemption concerns a single-family house sold or rented by its owner. Key conditions include:
- The owner is a bona fide private individual who owns no more than three such houses at one time. The statute also limits interests in, title to, and rights to proceeds from more than three such houses.
- The transaction does not use the sales or rental facilities or services of a real estate broker, agent, salesperson, or a person in the business of selling or renting dwellings, including their employees or agents.
- The transaction satisfies the statutory advertising condition. Section 3604(c), which prohibits discriminatory housing notices and advertisements, remains applicable.
- For a sale where the owner does not reside in the house at the time of sale or was not its most recent resident, the exemption is limited to one such sale within a 24-month period.
The statute permits professional help needed to perfect or transfer title, such as attorneys, escrow agents, abstractors, and title companies. Read the full conditions and the definition of a person in the business of selling or renting dwellings in § 3603(b)–(c).
Does the Owner Have to Live Somewhere Else?
No. Nonresidency is not a universal eligibility requirement. For example, an owner selling a current residence must still meet the ownership, transaction, and advertising conditions; living in the home does not by itself disqualify the owner.
What Protections Still Apply?
This is an exception to specified Fair Housing Act provisions, not permission to ignore all civil-rights laws. Discriminatory advertising remains prohibited. The separate property-rights protection in 42 U.S.C. § 1982 also prohibits racial discrimination in property transactions. State and local fair-housing laws may provide additional protections and different exemptions.
How Is This Different From Other Exemptions?
The Mrs. Murphy exemption concerns a dwelling with living quarters for no more than four families living independently, where the owner actually occupies one of the quarters as a residence. It does not remove the prohibition on discriminatory advertising in § 3604(c), and other applicable laws still matter.
42 U.S.C. § 3607 separately addresses certain noncommercial religious-organization and private-club housing, and qualifying housing for older persons. These provisions have their own conditions. The older-persons exemption concerns familial status; it is not a blanket exemption from every protected class. Calling a community “affinity housing,” or making participation optional, does not itself create a Fair Housing Act exemption.
What to Remember for the Exam
Check the owner, the property, the number of houses owned, the services used, and any applicable sale-timing condition. Remember that the single-family exemption does not require the owner to live elsewhere. For a state-specific question, apply that state’s rules as well as the federal framework.
Review related concepts with our real estate flashcards.
