Unit 21 - Fair Housing and Ethical Practices

three effective means of self-protection for licensees

-Standardized inventories of property listings -standardized criteria for financial qualification -written documentation of activities and conversations

Advertising

Advertisements of property for sale or rent may not include language indicating a preference or limitation. No exception to this rule exists, regardless of subtle or "accidental" wordings.

Housing

a dwelling that includes any building or part of a building designed for occupancy as a residence by one or more families. includes a single-family house, a condominium, a cooperative, and manufactured housing, as well as vacant land on which any of these structures will be built.

Blockbusting

aka panic peddling/selling the act of encouraging people to sell or rent their homes by claiming that the entry of a protected class of people into the neighborhood will have some sort of negative impact on property values illegal

The Illinois Human Rights Act

amplifies federal legislation for Illinois. It bars discrimination on the basis of race, color, religion, national origin, ancestry, age (40+), sex, marital status, physical and mental disability, military service, unfavorable military discharge, familial status, sexual orientation, and order of protection status.

A real estate licensee tells a single man with two small children that homes for sale in a condominium complex are available only to married couples with no children. Which statement is TRUE? a. Because a single-parent family can be disruptive if the parent provides little supervision of the children, the condominium is permitted to discriminate against the family under the principle of rational basis. b. The man may file a complaint alleging discrimination on the basis of familial status. c. Condominium complexes are exempt from the fair housing laws and can therefore restrict children. d. Restrictive covenants in a condominium take precedence over the fair housing laws.

b. The man may file a complaint alleging discrimination on the basis of familial status.

During a listing presentation, a real estate licensee said to the seller, who owned two residential properties, "I hear a family of those people are moving in, and you'd better put your house on the market before values drop!" Has the licensee violated any fair housing law? a. Yes, the licensee is guilty of steering. b. Yes, the licensee is guilty of blockbusting. c. No because the seller owns fewer than three houses. d. No because the licensee does not intend to publicly advertise the property.

b. Yes, the licensee is guilty of blockbusting.

The federal Fair Housing Act prohibits discrimination in housing based on a. sex. b. all of these. c. disability or familial status. d. race, color, religion, or national origin.

b. all of these.

Encouraging people to sell or rent their homes by claiming that entry of a protected class of people into the neighborhood will have a negative impact on property values constitutes a. steering. b. blockbusting. c. a violation of the ADA. d. redlining.

b. blockbusting.

Failure to comply with fair housing laws

both a civil and a criminal violation and constitutes grounds for disciplinary action against a licensee.

A landlord rented an apartment to a person with a disability, and the tenant wants to make certain changes to the unit to accommodate her disability. Which of these does NOT constitute a reasonable modification? a. Widen the doorways b. Lower the kitchen cabinets c. Install a dog run for service animals in the lobby d. Lower the light switches

c. Install a dog run for service animals in the lobby

Which of these is TRUE pursuant to the Fair Housing Act? a. A landlord may unilaterally increase her customarily required security deposit if the tenant is disabled. b. Good intentions are always a defense to allegations of a Fair Housing Act violation. c. Landlords must make reasonable accommodations to existing policies or practices to permit disabled persons to have equal enjoyment of the premises. d. Steering is not illegal if it is based on the licensee's reasonable expectations.

c. Landlords must make reasonable accommodations to existing policies or practices to permit disabled persons to have equal enjoyment of the premises.

The following ad appeared in the newspaper: "For sale: 4 BR brick home; Redwood School District; excellent Elm Street location; next door to St. John's Church and right on the bus line. Move-in condition; priced to sell." Which of these statements is TRUE? a. The ad is appropriate. b. Fair housing laws do not apply to newspaper advertising. c. The ad should not mention St. John's Church. d. The ad should state that the property is available to families with children.

c. The ad should not mention St. John's Church.

Home Mortgage Disclosure Act

requires that all institutional mortgage lenders with assets over $36 million and 1+ offices in a given geographic area make annual reports detailing all mortgage loans made or purchased, broken down by census tract. Enables gov to detect patterns of lending behavior that might constitute redlining.

Title I of the ADA

requires that employers make reasonable accommodations that enable an individual with a disability to perform essential job functions. The provisions of ADA apply to any employer with 15 or more employees.

Title III of the ADA

requires that persons with disabilities have full accessibility to businesses, goods, and public services. business and commercial real estate are fully covered by Title III. building owners and managers must ensure that any obstacle restricting right to full and equal access to businesses and public services is eliminated.

consequences for Violating provisions or restrictions of the Act or the rules

suspension, nonrenewal, or revocation of the violator's license or censure, reprimand, or fine imposed by IDFPR.

two main aspects of the profession that professional ethics in business focus on

-Establish standards for integrity and competence in dealing with consumers of an industry's services. -Define a code of conduct for relations within the industry and among its professionals.

civil rights violation for any licensee to engage in any of the following acts of discrimination based on race, color, religion, national origin, ancestry, age (40+), sex, marital status, physical or mental disability, military service or unfavorable discharge from military service, familial status, or sexual orientation and order of protection status in connection with employment, real estate transactions, access to financial credit, and the availability of public accommodations:

-Refuse to engage in a real estate transaction with a person -Alter the terms, conditions, or privileges of a real estate transaction -Refuse to receive or fail to transmit an offer -Refuse to negotiate -Represent that real property is not available for inspection, sale, rental, or lease when in fact it is available; or fail to bring a property listing to an individual's attention; or refuse to permit him to inspect real estate -Publicize, through any means or use, an application form that indicates an intent to engage in unlawful discrimination -Offer, solicit, accept, use, or retain a listing of real property with knowledge that unlawful discrimination is intended

discriminatory acts against children that constitute a civil rights violation

-Require, as a condition to the rental of a housing accommodation, that the prospective tenant will not have one or more children younger than 18 residing in his family at the time the application for rental is made -Insert a condition in any lease that terminates the lease if one or more children younger than age 18 are ever in the family occupying the housing -Any agreement or lease that contains a condition such as "the above is legally void as to that condition"; the lease itself remains in force, but the clause is void and unenforceable

The Department of Housing and Urban Development (HUD)

-administers the Fair Housing Act -established rules and regulations that further interpret fair housing practices -distributes the equal housing opportunity poster

the Fair Housing Act exempts

-owner-occupied buildings with no more than four units -single-family housing sold or rented without the use of a real state licensee -housing operated by organizations and private clubs that limit occupancy to members.

The Fair Housing Act prohibits discrimination based on

-race -color -religion -sex -national origin -disability -familial status.

The sale or rental of a single-family home is exempt when

-the home is owned by an individual who does not own more than three such homes at one time (and who does not sell more than one every two years), -a real estate licensee is not involved in the transaction, -discriminatory advertising is not used.

Source of income

If source of income is established as a protected class, then a landlord or property manager cannot refuse to rent to someone based upon the fact that the tenant's source of income may come from a source other than employment. Examples are social security, welfare, disability income, or any other legal source

Intent and Effect

Owners and licensees must examine their activities and policies to determine whether they unintentionally appear to engage in discriminatory actions, because if so they are considered discriminatory, regardless of intent

when a judgment in either a civil or criminal proceeding has been made against a licensee for illegally discriminating

The Act requires that , his license must be suspended or revoked unless an appeal is active

Ethics

a high moral system of principles, rules, and standards that are based on personal values.

disability

a physical or mental impairment. It is unlawful to discriminate against prospective buyers or tenants on the basis of such disability. Landlords must make reasonable accommodations to existing policies, practices, or services to permit persons with disabilities to have equal enjoyment of the premises. Persons with disabilities must be permitted to make reasonable modifications to the premises at their own expense. -Failure to permit reasonable modification constitutes discrimination. -landlord is allowed to require that the property be restored to its previous condition when the lease period ends. The landlord may not increase the customarily required security deposit for persons with disabilities. -landlord may negotiate provision that tenant pay into interest bearing escrow account to ensure sufficient funds for restoration at end of tenancy with interest benefitting tenant. In newly constructed multifamily buildings with an elevator and four or more units, public and common areas must be accessible to persons with disabilities, and doors and hallways must be wide enough for wheelchairs. The entrance to each unit, light switches, electrical outlets, thermostats, and other environmental controls, kitchen and the bathrooms; bathroom walls should be reinforced to accommodate later installation of grab bars. Ground-floor units must meet these requirements in buildings that do not have an elevator.

code of ethics

a written system of standards for professional, values-based conduct.

As an office policy, a sponsoring broker requires that sponsored licensees show prospective buyers from racial or ethnic minority groups only properties that are in certain areas of town where few members of their groups currently live. The sponsoring broker prepares a map illustrating the appropriate neighborhoods for each racial or ethnic group. Through this policy, the sponsoring broker hopes to achieve racial balance in residential housing. Which of these statements is TRUE regarding the sponsoring broker's policy? a. Because the effect of the sponsoring broker's policy is discriminatory, it constitutes illegal steering regardless of his intentions. b. While the sponsoring broker's policy may appear to constitute blockbusting, application of the effects test proves its legality. c. The sponsoring broker's policy clearly shows the intent to discriminate. d. While the sponsoring broker's policy may appear to constitute steering, application of the intent test proves its legality.

a. Because the effect of the sponsoring broker's policy is discriminatory, it constitutes illegal steering regardless of his intentions.

Which of these is legal? a. Negotiating with a person with a disability to establish an escrow account for the cost to restore a property after it has been modified b. Charging a family with children a higher security deposit than those with no children c. Picturing only white people in a brochure as the "happy residents" in a housing community d. Refusing to sell a house to a person who has a history of mental illness

a. Negotiating with a person with a disability to establish an escrow account for the cost to restore a property after it has been modified

A woman owns two multiunit apartment buildings: a two-flat on Oak Street and a 12-unit building on Main Street. She lives in an apartment in the Main Street property. Which of her properties, if any, is exempt from the Illinois Human Rights Act? a. Neither property b. The Oak Street property only c. The Main Street property only d. Both properties

a. Neither property

Under the Fair Housing Act, which action is legally permitted? a. Restricting occupancy in an apartment complex to senior citizens, if qualified and registered as housing for seniors b. Altering the terms of a loan to discriminate against a member of a minority group c. Refusing to rent an apartment to an individual because of his physical disability d. Telling a minority individual that an apartment has been rented when in fact it has not

a. Restricting occupancy in an apartment complex to senior citizens, if qualified and registered as housing for seniors

Under the Americans with Disabilities Act (ADA), which of these is TRUE? a. The ADA requires that employers make reasonable accommodations that enable a person with a disability to perform essential job functions. b. Business and commercial real estate are exempt from the ADA. c. The provisions of the ADA do not apply to employers with fewer than 50 employees. d. The ADA does not apply to public buildings.

a. The ADA requires that employers make reasonable accommodations that enable a person with a disability to perform essential job functions.

Which of these is NOT permitted under the federal Fair Housing Act? a. The owner of a 20-unit residential apartment building rents to white men only. b. An expensive club in Chicago rents rooms only to members who are graduates of a particular university. c. A Catholic convent refuses to furnish housing for a Jewish man. d. An owner refuses to rent the other side of her duplex to a family with children.

a. The owner of a 20-unit residential apartment building rents to white men only.

After a broker takes a listing of a residence, the owners specify that they will not sell their home to any Asian family. The broker should a. explain to the owner that the instruction violates federal law and that the broker cannot comply with it. b. advertise the property exclusively in Asian-language newspapers. c. abide by the principal's directions despite the fact that they conflict with the fair housing laws. d. require that the owner sign a separate legal document stating the additional instruction as an amendment to the listing agreement.

a. explain to the owner that the instruction violates federal law and that the broker cannot comply with it.

Americans with Disabilities Act (ADA)

addresses the rights of persons with disabilities in employment and public accommodations

When a landlord rented an apartment in his six-unit building to a young couple, he didn't notice that the woman was pregnant. After the baby was born, the landlord canceled their lease, citing the lease's no-children clause. Which of these statements is TRUE? a. The landlord is acting legally under an exemption to the Illinois Human Rights Act. b. The landlord must give the tenants 60 days in which to find a new apartment. c. The landlord is violating the Illinois Human Rights Act regarding the exclusion of children. d. The landlord may refuse to rent to families with children only if he lives in the building.

c. The landlord is violating the Illinois Human Rights Act regarding the exclusion of children.

Housing for Older Persons

certain properties can be restricted to occupancy by elderly persons. Housing intended for persons 62 or older or housing where 80% of the units are occupied by individuals 55 or older is exempt from the familial status protection.

The 2010 ADA Standards for Accessible Design

contains detailed specifications for designing parking spaces, curb ramps, elevators, drinking fountains, toilet facilities, and directional signs to ensure maximum accessibility

If a seller refuses to sell her home to a buyer on the basis of that buyer's race, what law is violated? a. ADA b. Fair Steering Act c. Fair Advertising Act d. Fair Housing Act

d. Fair Housing Act

Which of these is TRUE pursuant to the Illinois Human Rights Act? a. Tenants can never be held liable for any damages to the premises caused by a service animal. b. It is not a civil rights violation to discriminate against a person who is blind. c. It is not a civil rights violation to discriminate against a person who is hearing impaired. d. It is a civil rights violation to refuse to sell or rent because the prospective buyer or tenant has a service animal.

d. It is a civil rights violation to refuse to sell or rent because the prospective buyer or tenant has a service animal.

A licensee entered into a buyer agency agreement with Japanese man. The licensee showed him only properties where it was obvious that other Japanese people lived. Has the licensee violated any fair housing law? a. Yes, the licensee is guilty of blockbusting. b. No because a Japanese buyer would want to live in a Japanese neighborhood. c. No because as a buyer agent, it is the licensee's responsibility to make decisions for the buyer. d. Yes, the licensee is guilty of steering.

d. Yes, the licensee is guilty of steering.

A Lithuanian American real estate broker offers a special discount to Lithuanian American clients. This practice is a. legal in certain circumstances. b. legal but ill-advised. c. an example of steering. d. illegal.

d. illegal.

A lender's refusal to lend money to potential homeowners attempting to purchase properties located in predominantly African-American neighborhoods is called a. blockbusting. b. steering. c. prequalifying. d. redlining.

d. redlining.

equal housing opportunity poster

declares that the office in which it is displayed promises to adhere to the Fair Housing Act and pledges support for affirmative marketing and advertising programs. should be displayed in every real estate office.

"effects test"

is applied by regulatory agencies to determine whether discrimination has occurred. There are two different principles under which one may be charged

local fair housing regulations

local municipalities (cities, villages and counties) can establish by ordinance additional protected classes for source of income and Section 8 voucher tenants

The Civil Rights Act of 1866

prohibited discrimination in housing based on race or color.

Familial status

the act's protections extend to families with children. Unless a property qualifies as housing for older persons, all properties must be made available to families with children under the same terms and conditions as anyone else. It is illegal to advertise properties as being for "adults only" or to indicate a preferred number of children. Occupancy standards (the number of persons permitted to reside in a property) must be based on objective factors such as sanitation or safety.

Steering

the channeling of homeseekers to particular neighborhoods or discouraging potential buyers or renters from considering certain areas. An illegal limitation of a purchaser's options licensee and brokerage firm subject to civil lawsuit

Redlining

the practice of refusing to make mortgage loans or issue insurance policies in specific areas for reasons other than the applicant's financial qualifications. literally or figuratively drawing a line around particular areas. often based on racial grounds rather than any real objection to an applicant's creditworthiness.

Title VIII of the Civil Rights Act of 1968

usually called the Fair Housing Act

Disparate Treatment

when one's actions are specifically discriminatory or seek to discriminate

Disparate Impact

when the effect/impact of one's actions are discriminatory.

reporting fair housing violations

within 1 year of alleged act complaint reported to HUD can be initiated by aggrieved person or HUD