HUD Archives: News Releases

HUD No. 04-134
Jereon Brown
(202) 708-0685

For Release
November 1, 2004

Broker and homeowner turn down higher bid of African American couple

WASHINGTON, D.C. - The U.S. Department of Housing and Urban Development said today it has charged Lillie Arnett, a Realtor and real estate broker, and her son, Teddy Arnett with violating the Fair Housing Act for refusing to sell a home to Marvin and Stephanie Benton, an African American couple based on their race and color.

On Jan. 24, 2004 the Bentons looked at a house Teddy Arnett was selling in Scott, Ark. Later that afternoon, the Bentons, through their agent, Wayne Smith made an offer to purchase the property for $139,000, the full purchase price. The offer was contingent upon Arnett agreeing to pay up to six percent of the closing and prepaid fees. Additionally, the buyer asked Arnett to pay up to three percent of the downpayment requirement through a buyer assistance program.

Later that day, Lillie Arnett, serving as her son's agent, advised Smith that the offer was not acceptable. While relaying the rejection, Ms. Arnett asked if Smith's clients were African American. Smith declined to answer the question but replied that the inquiry was a violation of the Fair Housing Act. At 7:30 p.m. the same day, Smith submitted another offer on behalf of the Bentons. The second offer waived all requests for additional closing costs, down payment assistance, prepaid fees and offered $135,900 for the home.

On Jan. 26, 2004 Arnett's next-door neighbors, a white couple offered to purchase the house for $138,000, contingent on their ability to obtain financing. Mr. Arnett accepted their offer and Ms. Arnett contacted Smith to advise him that another offer had been accepted. During the conversation Smith advised her that his clients were making a third offer of $139,900. Arnett rejected that offer as well.

Arnett's neighbors were not successful in obtaining the financing so on May 19, 2004 Arnett sold the house to a white male for $130,000.

"Our investigation shows that if not for their skin color, the Benton's would now be residing at 13915 Old River Drive," said Carolyn Peoples, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "The Fair Housing Act plainly states it is illegal to refuse a bonafide offer or refuse to negotiate simply based on someone's race or the color of their skin and HUD will not hesitate to enforce the Act."

A hearing on the charges will be held by a U.S. Administrative Law Judge on January 25, 2005, unless either the complainant or respondent elect to have the case decided by a federal judge in U.S. District Court. An election to go to district court must be made by Nov. 22, 2004.

Housing discrimination charges heard before an ALJ carry a maximum civil penalty of $11,000 for a first offense in addition to actual damages for the complainant, injunctive or other equitable relief, and attorney fees. Sanctions can be more severe if the respondent has a history of housing discrimination and if either party elects to go to federal district court, either party may request a jury trial and punitive damages.

In either forum, a United States Department of Housing and Urban Development attorney or a Department of Justice attorney brings the case on behalf of the complainant. Each party has the right to be represented by his or her own attorney. HUD is the nation's housing agency committed to increasing homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and

People who believe they are the victims of housing discrimination should contact HUD at 1-800-669-9777. Additional information is available at

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Content Archived: April 22, 2010