Aceable Principles 1 combined,

The NAR Code of Ethics was adopted in

1913 to establish a widely held code for conducting business in a proper fashion. Over time, the Code of Ethics has evolved to keep pace with practices and business concepts that may have changed or developed throughout the Code's life span

The Six Canons

According to the Canons of Professional Ethics and Conduct, the primary duty of the real estate agent is to represent the interests of the agent's client. So, how do you accomplish that? By following the six Canons of Professional Ethics and Conduct, a.k.a. Rule §531: Fidelity Integrity Competency Consumer Information Discriminatory Practices Information About Brokerage Services

Civil Action

Both the complainant and the individual charged with the violation have the right to resolve the matter by a civil action, rather than an administrative proceeding. If the person being charged elects to have the matter resolved by a civil action, then HUD will request that the lawsuit be filed by the Attorney General. The court in such a civil action has the authority to assess sizable financial penalties, which can also include reparations and relief, court costs, and attorney's fees. In any civil action, the burden of proof is on the person making the complaint. In order to have a legal basis for a case, a complainant must show that: They are a member of a protected class. They applied for and were qualified to rent or purchase the property but were rejected. The property remained available after the rejection - i.e., the property was rented or sold to someone else after it was denied to the qualified person making the complaint.

Fair Housing Poster

Every real estate office should display a special fair housing poster in a prominent location so that all can see it as they come and go. This poster is a declaration from the broker that the personnel of the company will give equal treatment to all who enter the office. HUD has stated that if an office is being investigated and this poster is not up, then it could be used as an indication that this office does not concern itself with Fair Housing matters. Failure to display the poster can shift the burden of proof to the brokerage firm in an alleged discrimination complaint.

Service Animals

HUD and DOJ have also provided guidance on service animals through the release of HUD Notice 13-060A and DOJ's ADA Service Animal Fact Sheet. Service animals are not treated as pets under the law and are not required to be certified. Because they are not pets, residents with a disability who have a service animal are not required to pay a pet deposit or other associated pet fees and service animals are not subject to type, breed, weight, and size restrictions established by the property's tenant selection and eligibility criteria. A request for a service animal may be denied, however, if there is reliable, objective evidence that an assistance animal poses a direct threat to the health and safety of others.

Self-Testing

In the 1997 Omnibus Appropriations Act, Congress established "a privilege for lender-initiated self-tests of residential real estate related to lending transactions" as part of their efforts to ensure fair lending practices. In essence, this privilege allows lenders to conduct self-tests to evaluate their lending practices. If they find discriminatory practices in their business, then they are allowed to remedy these without federal lawsuits. This Act encourages lenders to be critical about their lending practices and to engage in self-testing, which will ideally lead to more equitable lending practices.

Owners of TDHCA monitored rental properties must:

Keep properties suitable for occupancy and in good repair consistent with Uniform Physical Condition Standards ("UPCS") published by HUD. Estimate utility costs at the property, annually review them, and make them available for inspection. Provide residents with a certain number of property amenities and/or services. Operate the property in accordance with its Land Use Restriction Agreement ("LURA"), whether or not owners or managers change. Offer written leases with specific terms (usually six months for the Housing Tax Credit (HTC) program and one year for HOME and other federal programs). Provide tenants with written notice in the event of lease termination or non-renewal. Provide reasonable accommodations for tenant's disability at the Owner's expense (except in some HTC properties awarded before 2001).

Protected Classes

Race Color National origin Sex Familial status Religion Disability

Fair Housing Act of 1968

Simply put, the Fair Housing Act says that it is unlawful to refuse to sell, rent to, or negotiate with any person because of that person's inclusion in a protected class.

Conciliation

Sometimes complaints may be the result of a simple misunderstanding, or an investigation may reveal issues that require additional clarification. If HUD believes this is the case, then it can hold an informal meeting to help resolve the issue. In the federal Fair Housing Act, this type of informal conference is referred to as conciliation. Conciliation is an attempt to resolve the issues raised by a complaint or an investigation through informal negotiations between the aggrieved person, the respondent, and the HUD Secretary. With the exception of actual, written agreements that may result from conciliation, nothing said during the course of informal conferences may be made public or used as evidence in subsequent proceedings without the written consent of all parties concerned. The respondent and the complainant can reach an agreement during conciliation. For any such conciliation agreement to be binding both parties must accept it; the agreement may also be subject to the HUD Secretary's approval. Such agreements must be made public unless there is an agreement to the contrary that is accepted by both the respondent and the complainant.

Steering

Steering is the illegal act of channeling buyers or tenants to certain areas based on demographics. Typically, steering is premised on the notion that the potential buyer will be either incompatible or unacceptable to the residents of a housing area due to their membership in a certain protected class,

Eviction

TDHCA does not determine if an owner has a good cause or if a resident has violated their lease terms. Tenants who have received a copy of an eviction or non-renewal notice may contact one of the Legal Aid offices listed on the "How To File a Complaint" page or access other legal help at TXLawHelp.org.

TRELA and TREC Origins

TRELA Remember: The Texas Real Estate License Act (TRELA) is a law that governs the licensing, education, and activities of real estate license holders practicing brokerage in Texas. In 1939, the Texas Legislature passed the Texas Real Estate License Act to govern the licensing and practice of real estate in Texas. It was originally called the Real Estate Dealers License Act but eventually took upon the name Texas Real Estate License Act (TRELA). Today, TRELA is a part of the Texas Occupations Code, Chapter 1101. TREC Remember: The Texas Real Estate Commission (TREC) is a group of nine appointed people who regulate real estate activity and licensees in Texas to ensure laws are followed and consumers are protected. In order to enforce the provisions of TRELA, the Texas Legislature created the Texas Real Estate Commission (TREC) in 1949 (10 years later). TREC's purpose is to oversee the licensing, education requirements, and ethical standards of practice for real estate sales professionals and real estate inspectors within the State of Texas. TREC has the authority to adopt and enforce rules for governing real estate practitioners.

TDHCA

Texas Department of Housing and Community Affairs

First Fair Housing Law

The Civil Rights Act of 1866 was essentially the first law to introduce a protected class (in this case, race) and prevent housing discrimination based on this class.

HUD

The Department of Housing and Urban Development, commonly referred to as HUD, enforces the Fair Housing Act.

Housing and Community Development Act

The Housing and Community Development Act was a 1988 amendment to the Fair Housing Act that added familial status and disability to the list of protected classes.

Civil Rights Act of 1964

Then came the Civil Rights Act of 1964, which included a prohibition against discrimination on the basis of race, color, and national origin in any program or service funded by the federal government. Even after the passage of this law, discrimination still ran rampant through society, so little changed.

In Case of Emergency

There is a passage in the Texas Property Code that states a landlord may not prohibit or penalize a tenant for summoning police, fire, or EMS when there has been family violence.

Elderly Exemption

There is one exception to the familial status prohibition: what the Fair Housing Act calls "housing for older persons." A dwelling is exempt from the requirement to accommodate families if: That dwelling is provided under any state or federal program that the Secretary of Housing and Urban Development determines is designed and operated to provide assistance to the elderly That dwelling is intended for and occupied solely by people who are 62 years of age or older At least 80% of all occupied units in that dwelling house at least one person over the age of 55 and the landlord generally adheres to a policy with the demonstrable intent of housing persons over 55

Fiduciary Duty: Obedience

While an agent will understandably want to use their expertise to guide the client to a good decision, ultimately the final decision is the client's alone to make. Letting a client make an unadvisable choice can be one of the hardest things to do — but that's just what obedience entails.

What is a protected category according to Texas fair housing laws, but not national ones?

ancestry

Reconciliation

appraiser will compare estimates they made based on the cost approach, sales comparison approach, and/or income capitalization approach.

Keating Memo.

"...the Department believes that an occupancy policy of two persons in a bedroom, as a general rule, is reasonable under the Fair Housing Act... However, the reasonableness of any occupancy policy is rebuttable..." and nothing "implies that the department will determine compliance with the Fair Housing Act based solely on the number of people permitted in each bedroom."

§531.1 Fidelity

(a) A real estate broker or salesperson, while acting as an agent for another, is a fiduciary. Special obligations are imposed when such fiduciary relationships are created. They demand: (1) that the primary duty of the real estate agent is to represent the interests of the agent's client, and the agent's position, in this respect, should be clear to all parties concerned in a real estate transaction; that, however, the agent, in performing duties to the client, shall treat other parties to a transaction fairly; (2) that the real estate agent be faithful and observant to trust placed in the agent, and be scrupulous and meticulous in performing the agent's functions; and (3) that the real estate agent place no personal interest above that of the agent's client. treat all parties honestly and fairly.

§531.3 Competency

(a) It is the obligation of a real estate agent to be knowledgeable as a real estate brokerage practitioner. The agent should: (1) be informed on market conditions affecting the real estate business and pledged to continuing education in the intricacies involved in marketing real estate for others;(2) be informed on national, state, and local issues and developments in the real estate industry; and(3) exercise judgment and skill in the performance of the work. §531.3 Competency: Say What? In order to demonstrate competency, a license holder might ask themselves the following: What are my strengths and deficiencies? Do I attend classes to improve my services to my clients or customers? How often? Which resources are available to help me maintain my competence? Do I keep abreast of market conditions in the area in which I practice? How? Am I aware of trends in real estate practices? How do I usually find out about these trends? Do I read TREC and trade publications? Which ones? How do they help me maintain my competence? Can I identify local, state, and national issues that are currently under development or consideration?

§531.19 Discriminatory Practices

(a) No real estate license holder shall inquire about, respond to or facilitate inquiries about, or make a disclosure of an owner, previous or current occupant, potential purchaser, lessor, or potential lessee of real property which indicates or is intended to indicate any preference, limitation, or discrimination based on the following: race; color; religion; sex; national origin; ancestry*; familial status; or disability. (b) For the purpose of this section, disability includes AIDS, HIV-related illnesses, or HIV infection as defined by the Centers for Disease Control of the United States Public Health Service. §531.19 Discriminatory Practices: Say What? As a real estate license holder, you are prohibited from answering questions from clients that would cause you to make disclosures about race, color, religion, sex, national origin, ancestry, familial status, or disability (the protected classes under fair housing laws). For example, if a client asks you about the race or religious identities prominent in certain neighborhoods, you must NOT provide them with an answer. Consider responding instead with the truth, which is: "Federal and state laws prohibit me from making disclosures of that nature." If the client still demands answers at that point, you must walk away from that transaction, as complying with their request could break federal and state law and put your real estate license at risk.

§531.18 Consumer Information

(a) The Commission adopts by reference Consumer Protection Notice TREC No. CN 1-2. This document is published by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188, www.trec.texas.gov. (b) Each active real estate broker shall provide the notice adopted under subsection (a) by: (1) displaying it in a readily noticeable location in each place of business the broker maintains; and (2) providing a link to it in readily noticeable place on the homepage of each business website, labeled: (A) "Texas Real Estate Commission Consumer Protection Notice", in at least 10 point font; or (B) "TREC Consumer Protection Notice," in at least 12 point font. (c) For purposes of this section, business website means a website on the internet that: (1) is accessible to the public; (2) contains information about a license holder's real estate brokerage services; and (3) the content of the website is controlled by the license holder. (d) For purposes of providing the link required under subsection (b)(2) on a social media platform, the link may be located on: (1) the account holder profile; or (2) a separate page or website through a direct link from the social media platform or account holder profile. Every broker must display the Consumer Protection Notice TREC No. CN 1-2 in a readily noticeable location in each place of business the broker or inspector maintains. The homepage of the business website must also have a link to the Notice in at least 10-point font. No teeny tiny links allowed. 🚫 The Consumer Protection Notice lets consumers know that TREC regulates brokers and agents, and that there are options for anyone who wants to check the license status of a real estate professional or file a complaint.

§531.20 Information About Brokerage Services

(a) The Commission adopts by reference the Information About Brokerage Services Notice, TREC No. IABS 1-0 (IABS Notice). The IABS Notice is published by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188, www.trec.texas.gov. (b) Each active real estate broker and sales agent shall provide: a link to a completed IABS Notice in a readily noticeable place on the homepage of each business website, labeled: (A) "Texas Real Estate Commission Information About Brokerage Services," in at least 10 point font; or (B) "TREC Information About Brokerage Services," in at least 12 point font; and the completed IABS Notice at the first substantive communication as required under §1101.558, Texas Occupations Code. (c) For purposes of §1101.558, Texas Occupations Code, the completed IABS Notice can be provided: by personal delivery by the broker or sales agent; by first class mail or overnight common carrier delivery service; in the body of an email; or as an attachment to an email, or a link within the body of an email, with a specific reference to the IABS Notice in the body of the email. (d) The link to a completed IABS Notice may not be in a footnote or signature block in an email. (e) For purposes of this section, "business website" means a website on the internet that: is accessible to the public; contains information about a license holder's real estate brokerage services; and the content of the website is controlled by the license holder. (f) For purposes of providing the link required under subsection (b)(1) on a social media platform, the link may be located on: the account holder profile; or a separate page or website through a direct link from the social media platform or account holder profile. (g) License holders may reproduce the IABS Notice published by the Commission, provided that the text of the IABS Notice is copied verbatim and the spacing, borders and placement of text on the page must appear to be identical to that in the published version of the IABS Notice, except that the Broker Contact Information section may be pre-filled.

ADA's Areas of Discrimination

1. Employment: Employers with 15 or more employees are required to provide reasonable accommodation to individuals with disabilities, and they may not discriminate against an individual with a disability when they are making decisions about hiring or promotions. Employers may ask about a potential hire's ability to perform a job but cannot ask whether they have a disability or about the extent of that person's disability. 2. Public Transportation: Buses and trains, as well as their stations, must be accessible to persons with disabilities. 3. Public Accommodations and Commercial Facilities: Reasonable modifications must be made to policies, practices, and procedures to avoid discrimination against people with disabilities in public areas. This means that physical barriers that interfere with the activities of people with disabilities must be removed. All new construction and alterations of facilities must be compatible with making those facilities accessible to people with disabilities. 4. Telecommunications: Companies offering telephone service must offer telephone relay services to allow communications access for people with speech and hearing impairments. 5. Miscellaneous: This section contains a variety of provisions relating to the ADA as a whole, including its relationship to other laws, state immunity, its impact on insurance providers and benefits, prohibition against retaliation and coercion, illegal use of drugs, and attorney's fees. Visualize It!

he Texas Real Estate License Act (TRELA) was passed in

1939

the Texas Real Estate Commission (TREC) was created in

1949

Standards of Practice

A Standard of Practice gives an example of how a particular Article has been applied. In order to file a complaint with the local REALTOR® association or board, one must cite an Article that the complainant believes has been violated. A Standard of Practice may only be cited as support for the argument that an Article of the Code has been violated. Complaints may be filed by other REALTORS® or by members of the public. Be a Good Person The NAR Code of Ethics establishes a basis for professionalism and codifies a set of rules for REALTORS®. The Code of Ethics aims to make it a little bit easier for you to make good choices in your capacity as a real estate professional. It demands that you treat ALL parties fairly and honestly — not just those you represent. Remember that success can be measured by the respect clients and peers have for agents. 👍

Actual or Perceived

A disability can be actual or perceived. This means that if a real estate professional believes that a prospect may have a disability of any kind, and, as a result, refuses to rent, offer services, or show housing, then that professional has violated the federal Fair Housing Act. This is true regardless of whether or not the person actually has a disability. Exceptions to the Rule Although you may not discriminate against people because of a disability, it is NOT illegal to refuse housing to prospective tenants or to evict current tenants who have a physical or mental impairment that poses a direct threat to other tenants.

disability

A disability is defined as a physical or mental impairment that substantially limits one or more of an individual's major life activities. An individual qualifies as having a disability if: There is a record of them having such an impairment. They are regarded as having such an impairment.

Redlining

A process by which banks draw lines on a map and refuse to lend money to purchase or improve property within the boundaries.

Fiduciary Duty: Loyalty

An agent has a duty of loyalty to their principal. Their job is to represent their principal's best interests, even over their own

No License Needed These people do NOT need a real estate license:

An attorney licensed in this state (they have already acquired the license to practice law in this state) An attorney in fact authorized under a power of attorney to conduct a real estate transaction A public official while engaged in official duties An auctioneer licensed under Chapter 1802 while conducting the sale of real estate by auction if the auctioneer does not perform another act of a broker or salesperson A person conducting a real estate transaction under a court order or the authority of a will or written trust instrument A person who is employed to sell or rent land and/or structures by the owner An on-site manager of an apartment complex An owner or the owner's employee who leases the owner's improved or unimproved real estate Any transactions for the sale, lease, or transfer of mining or mineral interests Any transactions for the sale, lease, or transfer of cemetery lots Any transactions for the lease or management of a hotel or motel

Informing Commercial Clients About the ADA

Any commercial real estate that a license holder shows to a potential buyer, customer, or buyer-client will most likely fall within the scope of the ADA's requirements. This means that the license holder should inform the client or customer that these ADA requirements apply to the property. If the space does not already comply with ADA accessibility requirements, then the finish-out (i.e., the adaptation of a space for the buyer or tenant's use) must include any alterations necessary to ensure that the space is accessible and complies with ADA standards.

Who Needs a License?

Anyone who helps another party (such as a client) complete a real estate activity (such as buying, selling, leasing, or listing to sell) for a fee ($$$) must have a real estate license. Consider the following people: The parties who need a license include: Sales agents Brokers Sales Agent A sales agent is defined as a person who is associated with (sponsored by) a licensed broker for the purpose of performing any of the practices of real estate as described above and by TRELA. A licensed salesperson must be associated with a broker to practice real estate on behalf of another and for compensation or a fee. This section also defines a few other terms that the license holder should know in order to understand TRELA. Broker A broker is a person or business entity who is licensed to represent one of the parties in a real estate transaction in exchange for a commission or other valuable consideration. After you get your license, you could later become a broker if you choose.

Article 16: Respect Existing Agreements

Article 16 says: Realtors® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other Realtors® have with clients. Don't try to steal clients

Community Reinvestment Act

As the name of the Community Reinvestment Act (CRA) suggests, this piece of legislation aims not only at preventing unethical discrimination, but also at reversing the abandonment and decay of residential property. It helps commercial banks and savings associations meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Passed in 1977, the Act requires lenders to assist their local communities by participating in community development projects. The Act also says that lenders need to submit an annual statement including public comments about their attempts to help low-income communities. The CRA extended and clarified the long-standing expectation that banks will serve the convenience and needs of their local communities.

Fair Housing Act Exemptions

As you know, there are exemptions to which the Fair Housing Act does not apply. Religious Organizations: A religious organization operating housing units for non-commercial purposes may restrict housing to people of the same faith, such as a seminary with dorms. Note: The religious organization may not discriminate against people because of their race, color, or national origin. Private Clubs: If a private club owns rental units, the club may reserve the rental units for member-only use. This exception only applies to temporary dwellings. Note: The club cannot restrict club membership due to a protected class. Housing for Older Persons: "Housing for older persons" may legally have rules that prevent younger adults and families with children from joining their community. Drug Use Record: Landlords can decide not to lease to potential tenants who have been convicted of using or selling illegal drugs. This exemption exists so a landlord can attempt to keep tenants out who would be interested in producing and selling drugs out of the rental property. Owner Transactions: An owner's sale of their home or rental of units in their personal dwelling is exempt. To qualify for this exemption, the owner cannot own more than three houses. Note: This exemption is not valid if the owner uses the facilities or services of a real estate license holder as license holders must always adhere to the Fair Housing Act. Exemption Caveat: There are never any permissible exemptions regarding the protected classes of race and color, which were established by the Civil Rights Act of 1866.

Reasonable Accommodations

As you've learned, a reasonable accommodation is a change in rules, policies, or practices that may be necessary to afford a person with a disability an equal opportunity to use or enjoy a dwelling, such as assistance in filling out a rental application or allowing a unit transfer. This could also include reasonable structural modifications or changes like (but not limited to): Installing grab bars in the bathroom Widening doorways Removing under-the-counter cabinets Installing ramps Requests can be made orally or in writing and are not required to be entered on specific forms, though management may provide a form for this purpose. It is a violation of fair housing law to discriminate against applicants or residents because of their disability or the disability of anyone associated with them and to treat persons with disabilities unfavorably as a result of their disability. Housing providers may not refuse residency to persons with a disability or place conditions on their residency because a person with disabilities may require a reasonable accommodation.

Blockbusting

Blockbusting refers to the practice of encouraging the panic selling of homes below market value, generally by raising fears that an influx of individuals belonging to a particular minority group will decrease property values in a neighborhood and affect the area negatively. Because it requires this kind of special effort, license holders are unlikely to engage in blockbusting accidentally and without malicious intent; nonetheless, they should remember that intent is not required for their actions to be a violation of the Fair Housing Act. Blockbusting may also be referred to as panic selling or panic peddling. Those wishing to foster this panic selling often cite effects such as a decline in the quality of education and an increased crime rate, even though there is no justification for making these claims.

CMA

Comparative Market Analysis. A report that compares the prices of sold homes that are similar to the subject property. Not the same as an appraisal

Approaches to value

Cost to replace: a method of estimating the value of a property by determining how much it would cost to replace the building or other improvements, minus the cost of depreciation, plus the value of the land itself Sales comparison approach: a property appraisal method that estimates value by comparing the subject property to the sales prices of similar properties in the same market area Income approach: a method of estimating the value of a property by applying a rate of return to the net income it produces

Summary of NAR Code of Ethics

Do the Right Thing If you work and act in an ethical way, clients and customers will respect that. If you earn their respect, those people will sing your praises in the community and more business will come to you. It's all about doing the right thing, even when no one is looking. Follow your moral compass and keep a copy of the NAR Code of Ethics nearby as reference material. Clowning Around Other organizations besides NAR have a code of ethics for the members of their groups. Even professional clowns have a code of ethics! It does not mention people who are afraid of clowns, but it does give strong requirements on how clowns should conduct themselves, boiled down into eight commandments. Visualize the Code While we discussed only a few articles at length, it's good for you to have an overview of all the articles. Here you go!

Disability Protections

Federal laws define a person with a disability as any person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such impairment; or is regarded as having such an impairment. Impairments Physical or mental impairments can include: Hearing Mobility Visual impairments Chronic alcoholism Chronic mental illness AIDS AIDS-Related Complex Intellectual disabilities Major Life Activities As the definition is concerned, major life activities include: Walking Talking Hearing Seeing Breathing Learning Performing manual tasks Caring for oneself Exceptions Someone who is currently using illegal drugs is not protected under the Fair Housing Act. The act also exempts actions taken (such as eviction) against someone who has proven to be a danger to the health, safety, and property of others. A few legal cases have decided that a recovering drug addict or alcoholic is protected under the definition of disability. And, of course, as mentioned earlier in this course, someone with AIDS or HIV is protected under this law. Americans with Disabilities Act The Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities in employment, transportation, public accommodation, communications, and governmental activities. The ADA also establishes requirements for telecommunications relay services. While the federal Fair Housing Act establishes accessibility guidelines for residential spaces, the ADA establishes accessibility guidelines for public and commercial spaces. More about the ADA later in the level.

Occupancy Standards

HUD has issued guidelines regarding the enforcement of occupancy standards that may violate fair housing laws due to their adverse impact on families with children. TDHCA has proposed minimum occupancy standards in its draft Tenant Selection Rule based on the guidance offered in HUD's Keating Memo. Currently, TDHCA recommends that occupancy standards should allow at least two persons per bedroom in the absence of local code or ordinance stating otherwise.

Testing

HUD has testers who regularly visit offices to see how potential clients are treated. A person or persons who belong to a certain protected class will enter an office, playing the role of speculative clients with a defined set of parameters. A few days later, someone who is not a member of that protected class will arrive with the same parameters. Afterward, the testers will compare notes to see how the service received compared. Unless there was a violation of some kind, the office does not know that it was tested. However, if there was an infraction, the broker will be notified and a complete investigation will begin. Scenario: Religious Discrimination Suppose someone files a fair housing complaint alleging religious discrimination. A Jewish family has complained that a real estate license holder only showed them properties near synagogues, even though they had expressed no interest in living near a synagogue. When they asked to see properties in other areas, they were told that the properties they were being shown were those that best fit their needs. The tester in this situation would likely be a non-Jewish family whose housing requirements and qualifications are quite similar to those of the Jewish family. The testers would be sent to the same real estate office. If the non-Jewish family were then shown properties that were not near synagogues, the results of the testing would incriminate the real estate office.

Penalties and Civil Proceedings

If HUD determines that a discriminatory practice has occurred or is in the process of occurring, then it can order an administrative hearing on the charges. If an administrative hearing takes place and concludes that there has been a violation of fair housing law, then the person or group who violated the law can be ordered to: Compensate the complainant for actual damages, including humiliation, pain, and suffering. Provide injunctive or other equitable relief, for example, making the housing available to the complainant. Pay the Federal Government a civil penalty. The maximum penalties are $10,000 for a first violation and $50,000 for a subsequent violation within seven years. Pay reasonable attorney's fees and costs. In addition, if the person charged with the violation is licensed, then the licensing agency must be notified of the decision.

Harassment

If a tenant is experiencing harassment, the property manager needs to do everything possible to end the harassment if they have the power to do so. A property manager should be vigilant in making sure no harassment is occurring.

Texas Code and Laws

In addition to rights under the Fair Housing Act, there is also the Texas Property Code, which includes an overview of people's basic rights as tenants in a rental property, and the Texas Fair Housing Act. Texas Department of Housing and Community Affairs In addition, to help protect and expand affordable housing, there's the Texas Department of Housing and Community Affairs. Here are its three major functions: Develop affordable housing Regulate properties qualifying as affordable Set and enforce standards on property maintenance for affordable housing TDHCA Laws The Texas Department of Housing and Community Affairs, or TDHCA, also has created laws to govern Texas fair housing. And while they are essentially the same as the federal law, we'll go over their differences on the upcoming screens. See if you spot any slight differences! Note: While the Texas Department of Housing and Community Affairs has laws on housing, the TDHCA DOES NOT resolve disputes between landlords and tenants.

Landlord's Responsibility

Landlords, after all, have to allow tenants to make modifications to their property in order to accommodate a disability. The modifications must be paid for by the tenant and the landlord can require the property to be put back to its original condition when the tenant moves out. Landlords cannot forbid assistance animals even if they have a no-pet policy. Of course, the tenant will be responsible for any damages caused by the animal when the lease is over. Denying people with assistance animals service in a restaurant or access to a building is a violation of laws and is treated as discrimination.

Regulation

Let's take a closer look at what and who TREC regulates. What TREC regulates the activities of: Real estate brokers Sales agents Inspectors Education providers (that's me!) who offer real estate and inspection courses The Commission also regulates the activities of: Residential service companies Timeshare developers Easement or right-of-way developers Who TREC regulates all of the following individuals: Real estate inspectors 🔎 Easement/right-of-way agents 🛣 Education providers for real estate & inspection courses 📚 Developers of timeshares ⛱ Residential service companies 🏠 Real estate brokers and sales agents 🕵️ As a future real estate sales agent, you'll be under the regulation of TREC.

Fiduciary Duty: Disclosure

License holders are required, whether working as an agent for someone or not, to disclose "material facts." Material facts are facts, oftentimes related to the condition of the property, that might cause a buyer or seller to change their mind about a transaction. The disclosure of material facts is a duty of disclosure owed to everyone, but a fiduciary duty of disclosure goes beyond that. It is a duty to disclose EVERYTHING an agent knows or learns about related to a transaction that would serve the interest of their client. Some of this, of course, would NOT be disclosed to the other party in the transaction.

Fiduciary Duty: Accounting

License holders owe their clients a duty of accounting — agents must account for records and all funds entrusted to themselves. License holders are not to use a client's funds for their personal funds, nor can they store them in the same account. Commingling Mixing a client's funds with an agent's personal funds is known as commingling and is illegal. Mixing money that belongs to another person with personal money is both messy and unethical. Handling of Escrow Funds If a license holder receives escrow funds in a real estate transaction, that money must be deposited within a reasonable amount of time into a separate account. Agents (and any sales agents acting on their behalf) cannot wait any longer than the close of the second business day after the signing of a contract to make these deposits. The money will then be held in the escrow or separate account until closing, at which time the agent must release the funds to the appropriate party. Likewise, license holders may not disburse money deposited in a custodial, trust, or escrow account before the completion or termination of the real estate transaction. Note: As with the fiduciary duty of confidentiality, the duty of accounting exists beyond the termination of the agency relationship — as long as there remain any outstanding funds to be settled.

Owners of TDHCA monitored rental properties are prohibited from:

Locking out or seizing property of tenants who have not paid rent (except by judicial process or as expressly allowed under Texas Government Code Section 2306.6738). Charging rents in excess of program-specific rent limits that are published each year. Using certain lease provisions that restrict tenant rights to court and appeals processes or decisions, excuse owners from responsibility, or require tenants to pay court fees if a proceeding is won against the owner. Denying households for rental housing on the sole basis of the household's participation in the Section 8, HOME TBRA, or other federal rental assistance program. Evicting tenants for other than good cause under the lease, including retaliation for renters making discrimination complaints or assisting others in exercising their fair housing rights or rights to request reasonable accommodations. Requiring households participating in Section 8, HOME TBRA, or other federal rental assistance programs to demonstrate a monthly income of more than 2.5 times the household's share of the monthly rent (households with less than $50 of monthly income are not required to demonstrate more than an annual income of $2,500).

Buyer-Customers

One of the challenges with working with buyers as customers (as opposed to clients) is that when they spend time with agents, the buyers can fall under the impression that the agent is on their side and looking out for them in the transaction. Timely Disclosure That is why it is so important for an agent to disclose upfront to the buyer the exact nature of their relationship. By doing so, the agent will meet the state requirement, but also put the buyer on notice that the license holder does not have a duty to represent them unless they become a client. Don't Forget the IABS Notice Has anyone ever walked on a car lot and thought that the salesperson was looking out for them in a purchase of a car, trying to get them the best deal possible? Doubt it. And yet, buyer-customers might make the mistake of thinking that the listing agent is representing the buyer. Upon the first contact with anyone, license holder or customer, the agent should inform the person whom they are representing. That person should also receive a copy of the Information About Brokerage Services Notice (IABS). This is not a fiduciary duty; it's just a requirement. Turn It to Your Advantage The license holder may have to remind the buyer every so often that they are not representing the buyer. That could be a good lead-in for the agent to say, "But, I could represent you in finding your home." As with sellers, a lot of buyers don't really understand all the benefits of having an agent fully representing them. Show 'Em What They're Missing Many agents create a presentation to show customers all the amazing ways they could help them if they were to form an agency relationship. Once a buyer sees the value in that relationship, the license holder could become that buyer's agent. By being a buyer's agent, the license holder is more likely to be sitting next to them on closing day. The agent should always be aware of whether or not they are creating an intermediary agency relationship, though. From Customer to Client The transformation in the way the agent conducts themselves when a customer turns into a client is amazing. That's because when a buyer becomes a client, the agent's very job is to save the buyer as much money as possible. Doesn't everyone want someone on their team trying to save them money at every corner? Of course!

Failing to Make Reasonable Accommodations and Modifications for individuals with a disability

One way that a license holder could be in violation of the Fair Housing Act would be if they failed to make a reasonable accommodation for a person with a disability. it's not always obvious that a person needs special accommodations. So, when a request is made for an adjustment to be made to a property, the property manager should be very careful if they plan on denying it. Landlord Responsibility: Landlords must allow tenants to make reasonable modifications so that people with disabilities can enjoy their properties. Tenant Responsibility: Landlords may require tenants to pay for modifications and may require tenants to return the property to its unmodified condition at the end of the lease.

Protected Classes

Race Color Religion National origin Sex Disability Familial status

Article 3: Cooperation with Other Brokers

Realtors® shall cooperate with other brokers except when cooperation is not in the client's best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker. Article 3 refers to a situation in which the seller-client would tell the listing agent that the owner does not want the listing company to cooperate with a particular company. The first time this happens to a license holder, they may not know how to respond. But Article 3 requires REALTORS® to cooperate with the other broker, with one exception. The exception is that a REALTOR® does not have to work with the other office if it is not in the client's best interest to do so.

Examples of Reasonable Accommodations

Reasonable accommodation requests may include (but are not limited to): Requesting to keep a service or companion animal despite a "no pets" policy Requesting a unit transfer from an upper floor to a ground floor unit because of a mobility disability Requesting interpreters or auxiliary aids to effectively communicate with management because an applicant or tenant has a hearing impairment Requesting that carpeting be removed from a unit or that maintenance staff not use certain chemicals inside or near a unit due to severe respiratory disabilities Requesting a reserved parking space close to a unit because of a mobility disability

What the Fair Housing Act. outlaws

Refusal to sell or rent a dwelling to any person because of race, color, religion, sex, disability, familial status, or national origin Discrimination based on race, color, religion, sex, disability, familial status, or national origin in the terms, conditions, or privileges of sale or rental of a dwelling Advertising the sale or rental of a dwelling indicating preference, limitation, or discrimination based on race, color, religion, sex, disability, familial status, or national origin Coercing, threatening, intimidating, or interfering with a person's enjoyment or exercise of housing rights based on discriminatory reasons or retaliating against a person or organization that aids or encourages the exercise or enjoyment of fair housing rights

Sunset Act

Sec. 1101-006 provides that the commission is subject to the Sunset Act (Chapter 325 of the Government Code). The Sunset Act is a common state law, which, in Texas, requires the Sunset Commission to evaluate all state agencies every 12 years with respect to their: Efficiency Need for their continued services The Texas Real Estate Commission has been reviewed many times under this Act and has received approval each time. In 2019, TREC was recommended to be renewed. If it gets reviewed and doesn't pass for some reason, you'll be sure to know.

Civil Rights Act of 1968

Shortly after the assassination of civil rights leader Dr. Martin Luther King Jr., Congress, with the help of Texan Lyndon B. Johnson, passed the Civil Rights Act of 1968. The Civil Rights Act of 1968 did a lot for the cause of equality, but it did not make things totally equal. Title VIII of this act, also known as the Fair Housing Act, prohibits discrimination in real estate practices.

Local Ordinances

States, cities, counties, and other municipalities can all have their own fair housing laws, in addition to the federal Fair Housing Act. Texas fair housing laws include the same protected classes as the federal laws we went over in the last chapter, but TRELA also includes the addition of ancestry as a protected class. And some Texas cities have additional protected classes, such as sexual orientation. Real estate license holders must be aware of any additional protected classes in their areas of expertise. Preventing Discrimination Against the LGBTQ Community Austin, Dallas, El Paso, Fort Worth, and San Antonio have all passed local ordinances against discrimination of LGBTQ individuals. Each agent should know the local laws to avoid an impropriety. NAR Code of Ethics You should also know that a 2014 amendment to the REALTOR® Code of Ethics added sexual orientation and gender identity as protected classes. REALTORS® cannot discriminate against people because of their sexual orientation or gender identity. Article 10 of the NAR Code of Ethics reads as follows: REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.

The Canons of Professional Ethics and Conduct

TREC's Canons of Professional Ethics and Conduct are the ethical and professional standard for the real estate industry in Texas. Like all other TREC Rules, they are published by the Secretary of State in the Texas Administrative Code. The Canons can be found in Chapter 531 of the Texas Administrative Code. These are not laws, but official rules for the conduct of license holders in the practice of real estate. The Canons are made up of six individual rules written and enforced by TREC.

Texas Real Estate Commission

TRELA gives a lot of power, duty, and responsibility to the Texas Real Estate Commission. The Texas Real Estate Commission (TREC) is a group of nine appointed people who regulate real estate activity and licensees in Texas to ensure laws are followed and consumers are protected. TREC and TRELA TRELA is an Act, so it lays out rules. But rules don't do very much if they aren't enforced. That's part of why TREC is so important: TREC enforces the rules and regulations laid out in TRELA. Think of it this way: If real estate were a country, TRELA would be that country's constitution and TREC would be the government who enforces that constitution. TREC members propose new rules, enforce laws, and talk a lot about the good and bad of the real estate business in an effort to keep improving it. Purpose TREC's purpose is to help protect the public by regulating licensed real estate agents, brokers, and practitioners, among others. Because TREC shares a similar purpose to TRELA, it makes sense that TREC enforces TRELA.

Apartment Complexes

Texas has regulations especially for multi-family dwellings like apartment dwellings. Apartment managers must be extremely careful that fair housing laws are not violated. For instance, all of the various areas in an apartment complex must be open to ALL of the tenants. (Requiring supervision of children in pool areas or workout areas is, of course, permitted.) All landlords need to be aware of the possibility of making exceptions to policies if necessary for a person with a disability. For example, providing a reserved parking place for a person in a wheelchair may be needed to allow the person to live in that dwelling.

Affected Businesses

The ADA affects a wide array of businesses and establishments, both public and private. Here are the kinds of businesses and establishments affected by the ADA: Businesses with 15 or more employees Any facilities or offices affiliated with state or local government Public and private schools Hospitals and dental offices Restaurants Hotels and motels Grocery and retail stores Shopping malls Libraries and museums Banks Theaters Amusement and recreation parks

Fair Housing Accessibility Guidelines

The Americans with Disabilities Act prohibits discrimination against people with disabilities in commercial and public spaces. Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act, remember?) protects people with disabilities from unfair housing practices. HUD recognized the need for clear and measurable standards to determine compliance with the Fair Housing Act. Consequently, it adopted the Fair Housing Accessibility Guidelines. These guidelines provide technical directions for satisfying specific accessibility requirements. As you've learned in this level, a common phrase in housing accessibility is "reasonable accommodations." Trying to establish a specific definition for the term "reasonable" in this phrase led to a degree of controversy. In an effort to resolve this disagreement equitably, HUD enlisted help from the Southern Building Code Congress International, National Association of Homebuilders, and National Coordinating Council on Spinal Cord Injuries. These organizations developed a series of proposals defining the phrase "reasonable accommodation," which were subsequently published in June of 1990 for public comment. Not Mandatory Compliance with HUD's Fair Housing Accessibility Guidelines is not mandatory. It is, however, a way to help ensure the equitable treatment of all potential clients and customers. Compliance can also provide evidence of non-discrimination in the event of a lawsuit. Covered Dwellings The Accessibility Guidelines only apply to covered multifamily dwellings, which are defined by the Fair Housing Act as "buildings consisting of four or more dwelling units if such buildings have one or more elevators, and ground floor dwelling units in other buildings consisting of four or more units."

Buyer-Clients

The agent who represents the buyer must always keep in mind that their client's interests come first. The Commission Conundrum I say this because a buyer's agent's commission is based on the sales price, and, yet, it is the job of the buyer's agent to get their client the lowest price possible. If the agent is successful in this endeavor, it will result in the reduction of their potential compensation. Now that's some true loyalty, right there! Loyalty = More Business = More Commission However, if you provide a high level of service and don't obsess about the dollar amount of the commission, the buyer client will recognize your skill and professionalism. They will sing your praises throughout the community and more business will come to you as a result. Giving good service means repeat business and referral business in real estate — and that will mean more commission!

Transparency

The criteria that a property manager would use to decide who will or will not become a tenant not only has to be exact, it also has to be available for others to view. If anyone is turned down for a lease and they ask for the criteria, it must be given to them. Some of the most common causes of denial are insufficient income, poor credit screening, and criminal history. Criminal History Let's talk more about criminal history. Felons are not in a protected class, and potential tenants may be rejected based upon their past history. That tenant may fit into one of the other protected classes, but the refusal is based on the criminal history and that is sufficient enough.

Marital Status

The definition of "marital status" set out in the ECOA differs in important ways from the definition of "familial status" established by the federal Fair Housing Act. You see, under ECOA, lenders may not deny a loan to an individual merely because that person is divorced, widowed, or unmarried. Whereas the federal Fair Housing Act's familial status protection focuses on the presence of children (dependents under the age of 18), the marital status protection afforded by ECOA aims to prevent discrimination against people without spouses. 👍

Familial Status Protections

The federal Fair Housing Act protects families who have children under 18. This protection also covers pregnant women and people in the process of obtaining legal custody of a child. So even if a landlord doesn't want children living in their building, they cannot legally refuse to rent to families with children.

OLD CAR

The fiduciary duties an agent owes a client have been organized into six categories or areas of responsibility. A great way to help you remember the fiduciary duties is the acronym OLD CAR. Obedience (if legal) Loyalty (100%) Disclosure (full) Confidentiality (forever) Accounting (forever) Reasonable care

Fiduciary Duty: Confidentiality

The fiduciary duty of confidentiality is connected quite closely to that of loyalty and disclosure, in that private information given to the agent by the client will be kept secret (unless the client wants to have the information shared). It should be noted that the duty of confidentiality is one that extends beyond the relationship, meaning that after termination of the agency relationship, regardless of whether or not the objectives of the relationship were met, the agent must keep confident anything learned during the relationship.

The Guidelines of ADA

The guidelines ask landlords to ensure that: Public use and common use portions of the dwellings are readily accessible to and usable by persons with disabilities All doors within such dwellings that are designed to allow passage into and within the premises are sufficiently wide to allow passage by persons in wheelchairs All premises within such dwellings include the following features of adaptive design: An accessible route into and through the dwelling Light switches, electrical outlets, thermostats, and other environmental controls in accessible locations Reinforcements in bathroom walls to allow later installation of grab bars Usable kitchens and bathrooms that can be navigated by an individual in a wheelchair

The Golden Rule (treat your clients, other agents and everyone like gold)

The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal. In the interpretation of this obligation, REALTORS® can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, "Whatsoever ye would that others should do to you, do ye even so to them."

What three qualities best define a REALTOR®? According to the Code of Ethics' Preamble:

The term Realtor® has come to connote competency, fairness, and high integrity. How to display competency: Perform your duties as a real estate professional with expertise. How to display fairness: Be fair and considerate in your dealings with others at all times. How to display integrity: Always behave ethically in a manner consistent with the NAR Code of Ethics, as well as any laws and Rules of the Commission (TREC).

Quality Housing and Work Responsibility Act of 1998

This act required HUD to set reasonable limitations on the number of occupants allowed in a dwelling. HUD concluded that a "two occupants per bedroom" rule — taking other factors into consideration — constitutes a good basic model.

Sales Comparison Approach

This approach bases its valuation on the local real estate market. The appraiser is concerned with local market demand for the property.

Acceptable Questions for lenders to ask

To get a better sense of the types of questions that ARE acceptable, let's check out the following list of rules: A lender may not ask if an applicant is divorced or widowed, but may ask if a borrower is married, unmarried, or separated. The lender may not ask about the receipt of alimony or child support unless the borrower intends to use that money to qualify for the loan, but may ask if a borrower must pay alimony or child support. A lender may not ask about a borrower's birth control or intentions for childbearing. A lender may not ask about a borrower's spouse unless that person will be involved in the contract. A lender may not discount or exclude any income because of the source of that income. A lender must report credit information on married couples separately in the name of each spouse. A lender may not ask about the applicant's race or national origin.

Home Mortgage Disclosure Act

Unfortunately, enforcing the prohibition against redlining can be difficult. But to help prevent discrimination in lending, in 1975, Congress passed the Home Mortgage Disclosure Act. This act requires lenders to disclose specific lending information, which HUD then uses to map lending patterns. In essence, lenders must now disclose how many loans they offer to specific communities, as well as the types of loans and the terms of those loans. This allows HUD to spot problematic lending patterns and helps support lawsuits or other disciplinary measures that HUD deems necessary.

Jones v. Mayer

Unlike the federal Fair Housing Act, there are no exceptions to the Civil Rights Act of 1866. This means that you may never turn away a qualified tenant or purchaser because of race or color. Nor can you publish an advertisement that discriminates against someone on this basis. For example, in the U.S. Supreme Court case Jones v. Mayer Co. (392 U.S. 409 [1968]), the refusal to sell a home because of the prospective buyer's race was found to be a violation of the law. Joseph Lee Jones, an African American man, claimed that the Alfred H. Mayer Co., a real estate company in St. Louis County, Missouri, refused to sell him a house in a particular neighborhood because he was African American. The court decided that the defendant had violated the Thirteenth Amendment as well as 42 U.S. Code 1982, which provides that all citizens "shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property."

Real Estate Brokerage Sec. 1101.004 outlines what constitutes as "engaging in real estate brokerage" and what does NOT fall under that umbrella.

What It Is If a license holder, with the expectation of receiving valuable consideration, directly or indirectly performs or offers, attempts, or agrees to perform for another person any act described by Section 1101.002(1), they are engaging in real estate brokerage. Many actions fall under this umbrella, but compensation typically remains the same: if you're getting paid you often need a license! What It Isn't This section also outlines what is NOT considered engaging in real estate brokerage. This includes: Constructing, remodeling, or repairing a home or other building Sponsoring, promoting, or managing, or otherwise participating as a principal, partner, or financial manager of, an investment in real estate Entering into an obligation to pay another person that is secured by an interest in real property For instance, a person who is employed to sell or rent land and structures by the owner of those structures does not need a real estate license.

NAR Standard of Practice 11-1

When REALTORS® prepare opinions of real property value or price (like a comparative market analysis), other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shall include the: Identification of the subject property Date prepared Defined value or price Limiting conditions, including statements of purpose(s) and intended user(s) Disclosure of whether and when a physical inspection of the property's interior was conducted Any conflicts of interest Any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants Basis for the opinion, including applicable market data If the opinion is not an appraisal, a statement to that effect (Amended 1-01)

A Unique Industry

Working in real estate is a unique career for three reasons: 1) Real estate agents work with their competitors at other offices to share inventory and negotiate transactions to a closing. 2) Agents have fiduciary duties to their clients. Attorneys and medical doctors have a similar emphasis on fiduciary duties, but this commitment to always putting the client's interests first is rare in many other industries. The Extra Mile You could say that real estate license holders go further in giving these kinds of services to their clients than any other industry. However, in a court of law there are confidential pieces of information that lawyers and doctors cannot share. The confidentiality of a real estate agent may not extend quite that far and may have to stop when giving testimony in a courtroom. An agent should always consult an attorney if they are unsure whether or not they should keep something confidential. Second Nature This may sound difficult, but as new sales agents develop their skills in real estate, putting the client first becomes a natural part of their work life. And if you think about these fiduciary duties often, it will probably enhance not just your business, but maybe your personal relationships as well!

How the ADA Affects Real Estate

You see, many brokerages fall within the scope of the ADA, either because of their location (perhaps in a mall or other retail facility, which is bound to follow the requirements of the ADA) or because the brokerage has 15 or more employees. This means that, while every brokerage should work to protect and honor the rights of people with disabilities, brokerages in locations that fall under ADA guidelines and brokerages with at least 15 employees must be especially certain to fulfill the legal obligations that the ADA imposes on them. Modifications and Accommodations Such brokerages will need to make any physical modifications that are necessary for the office to be accessible to a person with a disability. In addition, the brokerage may need to make other reasonable accommodations, such as providing notetakers, Braille documents, assistive listening devices, accessible restrooms, or interpreters. ADA and Fair Housing Act If, however, the ADA does not apply to a specific brokerage, the license holders who work there are still bound by the Fair Housing Act. This means that even license holders working at brokerages with fewer than 15 employees must make every effort to provide fair housing access for potential clients and customers with disabilities. Get a Lawyer! The guidelines for ADA compliance are extremely complex and professional assistance is recommended. Any brokerage with questions about its office's accessibility or general compliance should seek legal counsel.

Fiduciary Duty: Reasonable Care

You, as a license holder, will be hired to do more than just find a willing and able buyer or locate an adequate property. When hired, you are held to a high standard of care that requires knowledge concerning real estate. In other words, the exercise of your expertise as a real estate professional is an expectation and requirement if you are to fulfill your duty of reasonable care. You must use reasonable care when doing such things as: Filling out paperwork Writing an offer Inputting information into MLS Preparing graphics, taking pictures, mailing flyers, and staging properties Completing a listing and showing properties Writing agreements Knowing what to say and when to keep quiet. In short, take care of the client the way that you would want to be taken care of yourself, using the education, experience, and expertise you have gained during your career as a sales agent. This duty is based on what could be reasonably expected for a professional real estate agent to do.

§531.2 Integrity

a) A real estate broker or salesperson has a special obligation to exercise integrity in the discharge of the license holder's responsibilities, including employment of prudence and caution so as to avoid misrepresentation, in any ways, by acts of commission or omission. Firm adherence to a code of especially moral or artistic values; incorruptibility. Integrity Don'ts DON'T do the following: Exaggerate, misrepresent, or conceal any important facts relating to a property or transaction Feel obligated to discover latent defects in the property Advise on matters outside the scope of your real estate license Disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law

BPO

broker's price opinion. process used by a hired sales agent to determine the potential selling price or estimated value of a real estate property. Reasons for a BPO. 1. The people in the home have asked to refinance the home and the lender does not want to pay for a full appraisal, but they do want to have some assurance that the home is valued at or above what the loan will be. 2. The people in the house are about to be foreclosed on and the lender wants an inexpensive estimate of value.

Equal Credit Opportunity Act (ECOA)

he Equal Credit Opportunity Act (ECOA) makes it illegal for a lender to discriminate against borrowers based on their membership in a protected class. Specifically, the Act makes it illegal to: Refuse borrowers credit if they qualify for it Discourage anyone from applying for credit Offer anyone credit on terms that are less favorable (example: higher interest rate) than terms offered to someone with similar qualifications Close their account Protected Classes It is illegal for lenders to discriminate on the basis of: Race or color Religion National origin Sex Marital status Age (as long as they are old enough to enter into a contract) Receipt of income from any public assistance program Exercising in good faith their rights under the Consumer Credit Protection Act

Article 12: Issues with Advertisements

he complaint filed most often under the code is regarding Article 12. It says: Realtors® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. Realtors® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.

Executive Order 11063 of 1962

in 1962, President John F. Kennedy issued Executive Order 11063, which prohibited discrimination in the selling or leasing of property owned or funded by the federal government, including those properties relying upon Veterans Administration (VA) and Federal Housing Administration (FHA) loans. Because only a few transactions were done with federal involvement in those days, the law had few results.

REALTORS® are different from other real estate practitioners because the Code of Ethics and Standards of Practice of the National Association of REALTORS®*

requires a higher standard than the law requires.

Disability

the law states that a disability is any physical or mental impairment that limits one or more of a person's major life activities, such as walking, talking, hearing, seeing, breathing, learning, performing manual tasks, and caring for oneself. This definition thus includes a variety of conditions, such as having HIV or AIDS, being an alcoholic, having a drug addiction, and having a learning disability. In fact, according to the Pew Research Center, 12.6% of Americans have a disability. (It is worth noting here that while alcoholism is considered a disability, addiction caused by the current illegal use of controlled substances is not.)