Ch 42 Fair Housing

Fair Housing Amendments Act

handicap and familial status. was added in 1988

Title VI of the Civil Rights Act of 1964

was enacted to prohibit discrimination on the basis of race, color, or national origin in programs and activities receiving federal financial assistance.

New Construction and Renovation

If a client is planning to build a new facility or modify an existing one, he or she needs to consult the ADA Standards for the specific requirements. Renovations or modifications are considered to be alterations when they affect the usability of the space, for example, installing a new display counter, replacing fixtures or flooring, or replacing an entry door. However, simple maintenance such as repainting a wall is not considered an alteration by the ADA. A model home in a real estate development is not normally required to comply with the ADA. However, if the home is also the development's sales office, the area where the sales are conducted must comply with ADA since it is a public accommodation. NOTE: Many communities also have State or local accessibility codes enforced by local building inspectors. When a local accessibility code exists, the owner must follow both the code and the ADA requirements.

Disability or Handicap

If a person has a physical or mental disability or handicap (including hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex and mental retardation) that substantially limits one or more major life activities, has a record of such a disability or is regarded as having such a disability, a property owner may not: Refuse to let the person make reasonable modifications to the dwelling or common use areas, at his or her expense, so he or she can use the housing. (Where reasonable, the landlord may permit changes only if the person agrees to restore the property to its original condition when he or she moves.) Refuse to make reasonable accommodations in rules, policies, practices or services if necessary for the disabled person to use the housing. For example: A building with a "no pets" policy must allow a visually-impaired tenant to keep a guide dog.

Testers

Private fair housing groups, along with government agencies, have developed an investigative tool to uncover housing discrimination. This tool, known as "testing" is defined as "a simulated housing transaction designed to obtain evidence of differential treatment based on an individual's protected class status." Basically, what this means is that testers with similar profiles and housing needs, but different in their protected class status (for example, in race or sex), visit a real estate office and ask to see the same available unit to ascertain if they are treated differently because of this protected class status. Testing, coupled with good documentation and record keeping, can also clearly demonstrate a real estate agency's innocence when faced with a fair housing complaint.

Based on these laws, the list of protected classes of the Federal Fair Housing Act are:

Race Religion Color National origin Sex Handicap Familial status Important Note: Kentucky's fair housing law doesn't include any additional protected classes.

List three activities that are considered discriminatory in real estate. (See screen 21 for other correct answers.)

Refusing to sell, rent or negotiate with any person who is a member of a protected class telling persons that a property is not for sale or rent when it is Denying membership in any multiple listing service (MLS) or any broker's organization

Dealing with Testers

The Supreme Court has ruled that testing is legal. Testing for fair housing compliance must be recognized as a risk and a cost of doing business. If you think you are being tested, be aware of the following: 1. Do not attempt to frustrate the tester. 2. Treat the tester as any other buyer you encounter, even if you know you are being tested. 3. Respond only to the questions asked and never volunteer information concerning any fair housing violation. 4. It is naïve to think you have the ability to know if someone is or is not a "tester." It is always best to treat all of your prospects as testers. Providing all prospects with equal professional services will keep everyone free from jeopardy. 5. A tester does not have to admit what he or she is doing or identify the fact that he or she is a tester.

Face-to-face meetings between sellers and prospective minority buyers have several values:

The broker is relieved of the problem of articulating the seller's reasons for withdrawal. The prospective buyer is able to see that it is the seller and not the broker who has made the decision. The mere bringing of seller and buyer together for a final discussion supports the objective role of the broker. The prospect of confrontation may well discourage the seller whose reasons for withdrawing the property are not substantial or honest.

Fair Housing Enforcement

The federal Fair Housing Act is administered by the Office of Fair Housing and Equal Opportunity (FHEO) under the direction of the secretary of Housing and Urban Development (HUD). Any person who believes he or she has been discriminated against may file a complaint with HUD within one (1) year of the alleged act. HUD can also initiate a complaint on its own. When HUD receives a complaint, it will start an investigation. Within 100 days, HUD will determine if there is reasonable cause to charge discrimination or it will dismiss the complaint. During the investigation period, HUD can attempt to resolve the complaint by getting assurance from the person against whom the complaint was filed that he or she will remedy the alleged violation. This is called conciliation. A conciliation agreement must protect both the person filing the complaint and the public interest. If an agreement is signed, HUD will take no further action on the complaint. However, if HUD has reasonable cause to believe that a conciliation agreement is breached, HUD will recommend that the Attorney General file suit. If the case goes to an administrative hearing, HUD attorneys will litigate the case for the person filing the complaint. That person may intervene in the case and choose to be represented by his or her own attorney.

An Administrative Law Judge (ALJ) will consider evidence from both the complainant and the respondent. If the ALJ decides that discrimination occurred, the respondent can be ordered:

To compensate for actual damages, including humiliation, pain and suffering. To provide injunctive or other equitable relief, for example, to make the housing available to the complainant. To pay the Federal Government a civil penalty to vindicate the public interest. The maximum penalties are $10,000 for a first violation and $50,000 for a third violation within seven years. To pay reasonable attorney's fees and costs. In addition to or instead of filing a complaint with HUD, a person may file a suit in a Kentucky or federal court within two (2) years of the alleged violation.

This discussion and the listing agreement should make it clear that the agent will observe five rules in dealing with the listing and resulting prospective buyers:

1, The prospective buyer will only be described in terms that do not include race, religion, color, national origin, sex, handicap, familial status or other protected-class status. 2. The prospective buyers will be identified not by name but by occupation, present residence, or other characteristics of the buyer which could not identify them as members of a protected class. 3. The facts of the offer should be carefully documented so that the broker cannot be charged with failure to present the offer in a fair and nondiscriminatory manner. 4. The listing will be terminated if the seller refuses to consider an offer because the prospective buyer is a member of a protected class. 5. The supervisor and broker will be informed of any suspected attempts by the seller to illegally discriminate.

If you follow these rules, you will greatly reduce your risk in dealing with fair housing issues.

1.Know your job. 2. Know the law. 3. Sell the seller. 4. Practice equal professional service. 5. Keep good records. 6. Be consistent in: Behavior Service Paperwork 7. Keep up to date with law changes.

Unless a building or community qualifies as housing for older persons, it may not discriminate based on familial status. That is, it may not discriminate against families in which one or more children under 18 live with one of the following persons:

A parent A person who has legal custody of the child or children The designee of the parent or legal custodian, with the parent or custodian's written permission. Familial status protection also applies to pregnant women and anyone securing legal custody of a child under 18.

How is "testing" defined?

A simulated housing transaction designed to obtain evidence of differential treatment based on an individual's protected class status

If the court finds that discrimination has occurred, the person filing the complaint may be entitled to

Actual damages Punitive damages Attorney's fees and costs

The owner of a commercial property might have to make changes to a building to bring it into ADA compliance. Such changes might include:

Adding ramps to the front entrance or accessible parking spaces Widening doorways or aisles Installing elevators Improving restroom facilities by adding wider stalls, higher toilets or grab bars

Alex Jones owns a duplex and lives in one unit. He refuses to rent the other unit to families with children. What would you say about Alex's actions?

Alex is within the guidelines of the Fair Housing Act since he is the owner of a dwelling that has less than four units, one of which is owner-occupied.

1988 Amendments

As we said, the 1988 amendments added handicap and familial status to the list of protected classes.

Fair Housing laws also prohibit these activities.

Blockbusting Sterring Redlining

What is blockbusting?

Blockbusting is making a profit by inducing owners to sell by telling them that persons of a protected class are moving into the neighborhood which will have detrimental results.

Why is it important for licensees to understand the Americans with Disabilities Act?

Brokers need to evaluate whether they need to make physical changes to their office space to comply with the law. Licensees should inform their commercial and investor clients of the need to have their leases professionally evaluated and their offices inspected for compliance.

Steering

Channeling homebuyers toward or away from homes in certain neighborhoods in order to preserve or alter the makeup of that neighborhood. Some examples of steering would be showing a white couple properties in areas that are occupied only by other whites or showing African-American buyers homes that are in integrated areas or areas occupied only by African Americans.

Advertising Awareness

Compliance with anti-discrimination laws is critical when doing advertising.

Describe the exemption that exists for familial status discrimination.

Housing for older persons is exempt if one of the following conditions is exists.The HUD Secretary has determined that it is specifically designed for and occupied by elderly persons under a Federal, State or local government program. It houses at least one person who is 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates the intent to house persons who are 55 or older. It is occupied solely by persons who are 62 or older.

What is significant about the Fair Housing Amendments Act of 1988?

It added handicap and familial status to the list of protected classes.

Blockbusting

Making a profit by inducing owners to sell by telling them that persons of a protected class are moving into the neighborhood which will have detrimental results, such as the lowering of the property values, an increase in criminal behavior or a decline in the quality of the schools in the area. Blockbusting - also called panic peddling or panic selling -includes subtle as well as obvious actions or inducements.

In buildings that are ready for first occupancy after March 13, 1991, and have an elevator and four or more units:

Public and common areas must be accessible to persons with disabilities. Doors and hallways must be wide enough for wheelchairs. All units must have all of the following: An accessible route into and through the unit Accessible light switches, electrical outlets, thermostats and other environmental controls Reinforced bathroom walls to allow later installation of grab bars Kitchens and bathrooms that can be used by people in wheelchairs If a building with four or more units has no elevator and will be ready for first occupancy after March 13, 1991, these standards apply to ground floor units. These requirements for new buildings do not replace stricter standards that apply in state or local law.

Discriminatory activities in real estate include:

Refusing to sell, rent or negotiate with any person who is a member of a protected class Changing terms, conditions or services for different individuals as a means of discrimination Stating or advertising that the property is restricted Telling persons that a property is not for sale or rent when it is Denying membership in any multiple listing service (MLS) or any broker's organization Using discriminatory advertising

Redlining

Restricting the number of loans in certain areas of a community because of its racial or ethnic makeup. The usual justification for redlining is that the lender wants to limit the risks in a deteriorating area. The lender then discriminates against the whole class of risks rather than distinguishing among the individual risks.

Violations

The Department of Justice may file lawsuits in federal court to enforce the ADA, and courts may order compensatory damages and back pay to remedy discrimination if the Department prevails. The Department of Justice may also obtain civil penalties of up to $55,000 for the first violation and $110,000 for any subsequent violation.

Fair Housing Exemptions

The Fair Housing laws allow for exemptions in some areas. However, please note as we stated earlier there are absolutely no exemptions, exceptions, or excuses for racial discrimination.

Exemption: Housing for older persons is exempt from the prohibition against familial status discrimination if one of the following conditions exists:

The HUD Secretary has determined that it is specifically designed for and occupied by elderly persons under a Federal, State or local government program. It is occupied solely by persons who are 62 or older. It houses at least one person who is 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates the intent to house persons who are 55 or older.

The Federal exemptions to the 1968-88 laws:

The sale or rental of a single family home by an owner is exempt if the owner does not own more than three homes at one time, does not use discriminatory advertising and does not use a real estate agent. Rental of units in an owner-occupied, one-to-four family dwelling is exempt, as long as the owner does not use an agent to secure tenants. Religious organizations may restrict housing to members of the same religious organization. Non-profit religious organizations can add a surcharge to the sale or rental of a property to a person that does not belong to their religious group, as long as the membership in the group is not limited by race, color or national origin. Private clubs may restrict rental or occupancy of its dwellings to members only, as long as the dwellings are not commercially operated. However, the club may not discriminate in its membership requirements. Senior citizen housing is exempt if the residents are at least 62 years old or 80% of the units are occupied by at least one person 55 or older (as we discussed on the previous screen).

Discrimination in Mortgage Lending

These practices are also considered discriminatory: Refusing to give a loan Refusing to provide loan information Giving different terms for loans, such as interest rates or fees Discriminating when doing a property appraisal Refusing to purchase a loan Setting different conditions for a loan purchase In mortgage lending, keep in mind that it is also illegal to: Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right. Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act.

Legal Responsibilities of the Office

Violations of fair housing laws carry penalties and fines, so brokers must be careful about avoiding these violations. Fines, hearings and court appearances will cost a firm both time and money and will negatively impact the firm's operation. There is also the issue of the firm's reputation, which would suffer greatly if violations are filed and proven. Many errors and omissions liability policies do not cover fair housing issues.

What testers look for

When the tester entered the office, which of the following actions took place? From the time the tester entered the office, how long did he or she wait to be interviewed? Offered drink? offer literature of homes? asked to be seated? chat with tester? Which of the following best describes the place where the tester was interviewed? Ask any information on what real estate they are looking into buying?

Responsibilities of the Agent

Why is it important for the agent to know the law? There is more than one answer to this question. Here are a few reasons why knowing the law is necessary for a real estate professional: 1. It's the law. Real estate licensees must obey all federal, state, local rules and regulations. 2. It's right. Everyone should have an equal opportunity in our country to own or rent the property of his or her choice. 3. It reduces risk. It is risky business to attempt to violate fair housing rules. Besides the penalties, a court case and attorney fees could cost a licensee time, money, and loss of license.

If a person feels like he or she has been discriminated against, how long does that person have to file a complaint?

With HUD - within one year of the alleged act In state or federal court - within two years of the alleged act

Discriminatory advertising

is defined as advertising that indicates a preference, limitation or discrimination based on race, color, religion, handicap, sex, familial status or national origin. But it is sometimes difficult to know what actually constitutes discriminatory advertising.

Title VIII of the Civil Rights Act of 1968, also known as the Fair Housing Act of 1968

prohibited discrimination in housing based on race, color, religion or national origin. In 1968 in a landmark decision, the Supreme Court in Jones v. Mayer ruled that discrimination on the basis of race is strictly prohibited. This means there can be NO EXEMPTIONS OR EXCEPTIONS with regard to race.

Community Reinvestment Act

requires the periodic evaluation of a lender's lending record. In a process known as filtering down, dwellings that were formerly occupied by middle- and upper-income families decline in quality and value and become available to lower-income families. Lenders are encouraged to make loans on these properties to lower-income families to prevent the deterioration of the community

Housing and Community Development Act

sex was added to the protected list in 1974

Americans with Disabilities Act (ADA)

which became effective in 1992. Mmandates that persons with disabilities have equal access to jobs, public accommodations, government services, public transportation and telecommunications. It prohibits discrimination in the "full and equal enjoyment of goods and services" provided by public places, including hotels, shopping centers and offices, and it applies to the lease and operation of commercial facilities.

Civil Rights Act of 1866

which prohibited discrimination in housing based on race.