Practice of Real Estate

The difference between an employee and an independent contractor depends on: Select one: A. Scope of work B. Degree of supervision C. Who pays insurance D. All of the above

(broker/salesperson agreements) An independent contractor is retained to do a particular job with little to no supervision. Independent contractors pay their own liability insurance, social security, and income taxes. The correct answer is: All of the above

Which of the following practices would most likely deteriorate the economic status of a neighborhood? Select one: A. Redlining B. Steering C. Overdevelopment of property D. Bulk zoning

(fair housing law) The practice of redlining would most likely lead to an economic decline. Lenders refusing to make loans would greatly restrict the sale of the properties in the neighborhood; thus, tending to depress real estate value. The facts are insufficient to determine the effect of overdevelopment, as this may or may not deteriorate a neighborhood. The correct answer is: Redlining

Which of the following actions is NOT a form of steering? Select one: A. Excluding Hispanic Americans from a Caucasian community B. Attempting to attract only Puerto Ricans into a Puerto Rican neighborhood C. Encouraging Caucasians to sell by saying that African Americans are moving into the neighborhood D. Efforts to keep Asian Americans out of a Caucasian neighborhood

(fair housing laws) Attempting to induce members of one race to sell their properties by saying that members of another race are moving into the neighborhood is BLOCKBUSTING, not steering. Blockbusting and steering are both violations of Fair Housing Law. The correct answer is: Encouraging Caucasians to sell by saying that African Americans are moving into the neighborhood

If a person feels they were discriminated against in a real estate transaction, they would file a complaint with: Select one: A. The Federal Bureau of Investigation B. The Federal Trade Commission C. The Department of Housing and Urban Development D. The Department of Health, Education and Welfare

(fair housing laws) Fair housing complaints may be filed with HUD. The correct answer is: The Department of Housing and Urban Development

According to the 1988 Fair Housing Law, which of the following persons would NOT be considered as handicapped? Select one: A. A person addicted to alcohol B. A person addicted to an illegal drug C. A person who, by their actions, is believed to be insane D. Both A and B

(fair housing laws) Persons addicted to illegal drugs are not handicapped under the Fair Housing Law. However, alcoholics and the mentally ill are protected. The correct answer is: A person addicted to an illegal drug

The Federal Civil Rights Act of 1866 prohibits discrimination on the basis of: Select one: A. Sex B. Race C. Religion D. Marital status

(fair housing laws) The Civil Rights Act of 1866 prohibited discrimination, but this was based upon race. The other restrictions followed in subsequent laws except for marital status, which is not protected by Federal Fair Housing Law. The correct answer is: Race

Many Korean families have purchased homes in a specific neighborhood of your community. Now, local merchants are marketing to the Korean clientele. A Caucasian resident listed his house with your firm and you add the property to the MLS. You also place a bilingual ad in the newspaper and a bilingual "For Sale" sign on the property. Are your actions discriminatory? Select one: A. No, this is proper marketing practice B. No, because you are targeting the market most likely to purchase the property C. Yes, because national origin is protected by the 1968 Fair Housing Law D. Yes, because bilingual ads are a form of steering

(fair housing laws) The actions of the broker in this situation do not constitute a violation of the law. However, showing a preference or limiting the advertisements to one particular group would be a violation. The correct answer is: No, this is proper marketing practice

A broker takes a listing from a seller, who then says that the house must not be shown to a minority. The broker should: Select one: A. Note this on the MLS form B. Make written acknowledgement of the instruction C. Explain that he cannot comply because this violates federal law D. Avoid discussion of the request

(fair housing laws) The broker cannot take a listing under these circumstances. If the broker takes the listing and obeys the instructions (fiduciary duty), he would be in violation of Federal Fair Housing Laws. The correct answer is: Explain that he cannot comply because this violates federal law

Encouraging a homeowner to sell his or her property because minority group families are moving into the neighborhood is: Select one: A. Redlining B. Steering C. Blockbusting D. Puffery

(fair housing laws) This is a textbook example of blockbusting. The correct answer is: Blockbusting

Consistent with Fair Housing Laws, an owner of an apartment building rents exclusively to the elderly. Currently, 70% of his units are occupied and 30% are vacant. To continue renting exclusively to the elderly (without violating Fair Housing Laws), the owner may rent the next unit to all of the following persons, EXCEPT: Select one: A. A couple who are expecting a baby B. A 65 year old handicapped person C. A retired 53 year old widow D. Both A and C

The correct answer is: Both A and C