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The Fair Housing Act, enacted in 1968 as part of the Civil Rights Act, prohibits rental application discrimination based on marital status, sex, gender, age, disability, religion, color, race, or nationality, recognized as protected classes. Landlords cannot deny applicants for being pregnant, having children, or caring for an elderly individual. For landlords, it's crucial to understand the legal grounds for denying applications, ensuring compliance with the law. Tenants should be aware of their rights and have the means to file complaints if they face discrimination. The video further explores both landlord and tenant perspectives on these issues.