In a libertarian world, this would be OK

[Sauron]

http://www.cbsnews.com/stories/2005/...in690088.shtml

'Whites Only' Deed Sparks Lawsuit

AP) The modest brick house, with its yard full of wilting tulips and rusted old cars, isn't a candidate for the pages of Better Homes and Gardens.

But on a spring day in 2002, it was just what Nealie Pitts had in mind. She approached the owner, Rufus T. Matthews, and asked the price.

According to court documents, Matthews said the house was selling for $83,000 - but that a deed restriction meant only whites were eligible to buy it.

"I was hurt and angry, like he had slapped me in the face," Pitts, who is black, said in an e-mail.
[...]
In milder forms, covenants can be used to control things like the color homeowners can paint their houses.

But in the Jim Crow South, they were often used to keep neighborhoods white. Racially restrictive covenants were ruled illegal by the Supreme Court in 1948.

"Many people don't even know they're in their deeds," Chamberlin said, adding would-be homebuyers can ask to have the racist language removed. "That can't be used as a reason to stop a sale."

According to court documents, Matthews told Pitts his house in suburban Richmond was "not for colored. We decided we are going to keep this area right here all white."

The next day she contacted HOME, which sent out a black test buyer.

"Precisely the same thing happened," Chamberlin said. "We have it on tape."

On Thursday, Matthews told The Associated Press that he would sell his home only to a white buyer. But he denied the house was for sale, saying a sale sign he had was for items in his yard. "The house has never been for sale," he said.