Chapter 28 Fair Housing

Which of the following best describes the place where the tester was interviewed?

A room with one or more desks and no separate rooms or partitions A room with one or more desks separated by partitions A private office Other (specify)

Americans with Disabilities Act (ADA)

ADA mandates 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.

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

Fair Housing Amendments Act

And in 1988, the Fair Housing Amendments Act added handicap and familial status.

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.

Tester issues of interest continue to be very specific. The tester is not simply asked, "Do you think you were discriminated against because of your color/sex/familial status?" Instead, he or she is asked very specific questions to provide factual evidence of possible discrimination. Testers will be asked:

Did the licensee request any information about your income? Did the licensee request any information about your spouse's income?

Advertising Awareness

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. It is probably safe to say that any advertising that describes the property would be considered acceptable, while advertising that describes buyers could be considered discriminatory, especially if the buyers are from a protected class.

conciliation

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.

Civil Rights Act of 1866

Fair Housing law first began with the Civil Rights Act of 1866 which prohibited discrimination in housing based on race. However, at that time the federal government did not provide solutions, and the individuals involved had to provide their own remedies. Because those being discriminated against had limited access to legal help, many victims of discrimination were left without recourse.

When the tester entered the office, which of the following actions took place?

Greeted by a secretary or receptionist and referred to a sales associate. Greeted by a secretary or receptionist and referred to someone else. Greeted by a sales associate and interviewed by the same sales associate. Greeted by a sales associate and referred to someone else. Greeted by a person identified as the manager or head of the firm and then referred to someone else. Required to make the first approach and then greeted. Ignored, even after making the first approach. Other (specify).

Your Opinion

If a client asks you a specific opinion question, such as, "Would you live in this home or this neighborhood?" it is illegal to voice an opinion based on race, religion, color, national origin, sex, handicap, familial status or any of the protected classes. It is okay to make factual statements based on various features within the home. The same applies to questions you may receive about your opinion of the neighborhood. If you make comments about the neighborhood's features in relation to their location within the city, closeness to shopping, or other benefits, that's okay. Make sure your voiced opinions do not relate in any way to race or any of the other protected classes.

Community Reinvestment Act

In an effort to help lenders meet the needs of the persons in their respective communities, including low-income persons, the 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.

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.

Questions About Buyers

If, as a real estate professional, you are posed questions about the buyer that have nothing to do with the sale, you have to handle the situation carefully. If you are asked about the color, religion, ethnicity, familial status or other "protected class" characteristics of the buyers, you must tell the seller it is inappropriate for you to give out such information. The seller cannot withhold property from a "protected class" individual, and the real estate professional must definitely not be involved, should this happen. If so, both the seller and the agent or broker could be found in violation of the law. In the same way, the seller cannot, legally, decline to show a property to minorities or members of other protected classes. Both the seller and the real estate professional could be sued for violating fair housing laws.

Housing and Community Development Act

In 1974, the Housing and Community Development Act added sex to the list of protected classes.

suit in an Oklahoma

In addition to or instead of filing a complaint with HUD, a person may file a suit in an Oklahoma or federal court within two (2) years of the alleged violation. 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

What if a buyer asks you a question about the minorities living in a specific area?

It would be inappropriate and dangerous for you to answer this question. You could be in a lot of trouble for doing so. However, you could refer the buyer to experts in this field -- someone who would actually be in possession of the demographics in a particular area. This way, the buyer gets a factual answer to his or her question, and not your opinion, which may or may not be a representation of the true statistics. Even if your opinion is fairly accurate, you are safest to avoid answering questions of this nature.

Owners of small businesses that serve the public must remove physical "barriers"

It's important for investors and commercial clients to understand the impact of the ADA. Owners of small businesses that serve the public must remove physical "barriers" that are "readily achievable," which means easy to accomplish without much difficulty or expense. The "readily achievable" requirement is based on the size and resources of the business, so larger businesses with more resources are expected to take a more active role in removing barriers than small businesses. The ADA also recognizes that economic conditions vary. When a business has resources to remove barriers, it is expected to do so; but when profits are down, barrier removal may be reduced or delayed. Barrier removal is an ongoing obligation - the owner is expected to remove barriers in the future as resources become available.

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

Know your job. Know the law. Sell the seller. Practice equal professional service. Keep good records. Be consistent in: Behavior Service Paperwork Keep up to date with law changes.

From the time the tester entered the office, how long did he or she wait to be interviewed?

Less than five minutes. Five minutes or more but less than 10 minutes. Ten minutes or more but less than 15 minutes. Fifteen minutes or more but less than 20 minutes. Twenty minutes or more but less than 30 minutes. Asked to return at a more convenient time. Asked to leave without being invited to return. Left the office after waiting 30 minutes without being interviewed. Other (specify).

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.

And finally, how many houses in all were volunteered to you as serious possibilities by the licensee?

No houses One house Two houses Three houses Four or five houses Six or more houses

Did anyone in the office do any of the following for the tester?

Offer something to drink, reading matter, etc. Offer literature on homes available or on home buying in general. Ask the tester to be seated. Chat with the tester informally while waiting. Other act of courtesy (specify).

Did the licensee request (either verbally or in written form) any of the following information about the tester's housing needs?

Price or price range Size Location by neighborhood or jurisdiction Style or type of housing Special features or amenities of house (e.g. garage, basement, yard space (specify) Special features or amenities in neighborhood (specify) Down payment able to make Type of financing desired Other (specify)

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.

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.

list of protected classes of the Federal Fair Housing Act are:

Race Religion Color National origin Sex Handicap Familial status Important Note: Oklahoma's Fair Housing Law adds "age" as a protected class.

Discrimination in Mortgage Lending

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

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.

Fair Housing Act of 1968

Since the last half of the 20th century, there have been an increasing number of remedies provided under this act. 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.

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.

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.

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: Do not attempt to frustrate the tester. Treat the tester as any other buyer you encounter, even if you know you are being tested. Respond only to the questions asked and never volunteer information concerning any fair housing violation. 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. 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.

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

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. 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. 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. The listing will be terminated if the seller refuses to consider an offer because the prospective buyer is a member of a protected class. The supervisor and broker will be informed of any suspected attempts by the seller to illegally discriminate.

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 licensee. 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 page).

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.

Civil Rights Act of 1964

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.

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.

1988 Amendments for Familial Status

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.

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.

Responsibilities of the Licensee

Why is it important for the licensee 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: It's the law. Real estate licensees must obey all federal, state, local rules and regulations. It's right. Everyone should have an equal opportunity in our country to own or rent the property of his or her choice. 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 the licensee requested any of the above information, did he record any of this information or ask you to record it?

Yes, on what appeared to be a standard printed or duplicate form, file card, or a log book, etc. Yes, but not on a standard printed or duplicate form, file card, log book, etc. No, did not record anything even though licensee requested information. No, licensee did not request any information.

Questions About Ethnic Makeup

You may run across a buyer who is genuinely interested in living in an area where he will be surrounded by members of his own race. If someone asks for the "black" or "Jewish" areas, what do you do? Well, for one, you need to explain to the buyer that you, ethically and legally, cannot recommend housing based upon the race, religion, color, national origin, sex, handicap, or familial status makeup of the neighborhood. Remember, selecting properties based on the ethnic makeup of the neighborhood could easily bring about a "steering" charge against you.

When the basis for deferring a decision is ambiguous

it is important that you or your sponsoring broker attempt to remove the ambiguity by forcing the seller to articulate his or her concerns. If the concerns are founded in bias, you can take action to remove or overcome the bias or repudiate any support for it. On the other hand, the sellers' concern may be the product of considerations or impressions which you or your sponsoring broker can either clear up or explain in non-discriminatory terms.