Fair Housing Violation?

[Brie Schmidt]

Friends of mine need to get out of their lease in Chicago.  This is a 1900 sq foot duplex down.  It has 2 bedrooms on the main floor with closets and 2 bedrooms in the basement with no closets.

The lease states this about subletting:

4.Sublease and Assignment. Tenant shall neither sublease nor assign this Lease without the prior written consent of the Lessor, which shall not be unreasonably withheld. Lessor may require Tenant to enter a formal written sublease or assignment agreement. Any sublease or assignment of this Lease shall not release Tenant from the Tenant's obligation hereunder, until: a. The Ending Date of this Lease, and

b. The full, specific performance and satisfaction of each and every agreement, covenant and obligation hereunder.

Lessor shall not be required to enter into any sublease or assignment unless the full Security Deposit is tendered by subtenant or assignee. Tenant shall be liable for any monetary and non-monetary breaches of this Lease caused by Tenant's sublessee or assignee. 

I speak with their landlord and her attorney on what would be an acceptable tenant so that they can sublease.  They provide me with criteria in regards to income, credit, evictions, judgements, ect.  I advertise the unit and find potential tenants.  They meet every single requirement provided to me by the lawyer.  They have 2 children (12 yo and 5 mo) that live with them.  They also have 4 other children between the ages of 5 and 10 years old.  2 live there 2 days a week and 2 live there 3 days a week.

There is nothing in their lease about maxium occupancy and since this is a sublet, they will be taking over the terms of the lease in place.  Even if the partial custody children are considered full time occupants they are still within the regulations set forth by the city in terms of space required per person for occupancy.

So I present the tenants to the lawyer, again meeting every criteria he established, and he writes me this:

I think she also has an issue with there being up to eight (8) people living in such a small unit

I tell him that doesn't matter, denying them based on that is a violation of fair housing and familial status.  The next day he says they are releasing my friends from the lease so they now have no legal right to sublet.

Would this be a fair housing violation?