ESA exemption option for small landlords

[Chris B.]

In a prior post from about 2 months ago, Kerry Malarkey and Nathan Gesner mentioned a small landlord is exempt from FHA requirements requiring the acceptance of emotional support & assistance animals if one of the following is true:

"Owner-occupied buildings Properties with four units or fewer that are owned and lived in by the owner
Single-family homes Homes that are sold or rented without a broker by the owner, as long as the owner doesn't own more than three at once" (Quote from Nathan's reply))

https://www.biggerpockets.com/forums/52/topics/1219359-pitbu...

Given this, if a landlord does qualify for the exemption, what exactly does this mean?  I can see a few possible outcomes.  Some of which may not be the intent and may in fact be illegal.  However I haven't found any clarification on this aspect yet.  What are your thoughts?  

A) Landlord denies application from tenant with ESA. (seems straight forward)
B) Landlord denies the request for ESA exemption of pet fee / pet rent, but offers the applicant the unit if they ARE willing to pay fee / rent for the animal as a pet.

Or... Should it simply be one of two choices: deny application or accept application with ESA exemption even if the property qualifies for the FHA exemption?

I can see how this idea could possibly apply to other FHA requests too.