Legal Aspects of Real Estate Ch. 13; Fair Housing Laws

What 1977 Act prohibits financial institutions from discriminating in loan activities on the basis of race, color, religion, marital status, national origin ancestry or sex?

"The Housing Financial Discrimination Act of 1977, also known as the Holden Act, prohibits financial institutions from discriminating in loan activities on the basis of race, color, religion, marital status, national origin, ancestry, or sex."

When HUD receives a complaint, how many days may pass to determine if there is reasonable cause to charge discrimination?

100

Advertising Awareness (Handicap)

A licensee should never write a real estate advertisement which contains explicit exclusions, limitations, or other indications of discrimination based on handicap. For example, phrases such as no wheelchairs, able-bodied persons only, no deaf, or no handicapped parking are considered to be discriminatory. On the other hand, advertisements that include descriptions of the property, services or facilities, or neighborhoods are not considered discriminatory advertising. For example, a licensee could use phrases such as great view, fourth-floor walk-up, walk-in closets, jogging trails, and walk to bus-stop without violating anti-discrimination laws. A licensee could also describe in an ad the conduct that is required of residents without it being viewed as discriminatory. For example, a licensee could use the phrases non-smoking or sober. It is also within the law to write an ad that gives descriptions of accessible features, such as wheelchair ramp.

Fair Housing Enforcement (cont.)

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, suffering, embarrassment, and emotional distress. 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 $16,000, for a first violation of the Act; $37,500 if a previous violation has occurred within the preceding five-year period; and $65,000 if two or more previous violations have occurred within the preceding seven-year period. 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 state or federal court within two (2) years of the alleged violation. Note - Federal civil penalties can reach as high as $150,000. If the court finds that discrimination has occurred, the person filing the complaint may be entitled to Actual damages Punitive damages Compensatory damages Attorney's fees and costs

In general terms, what kind of advertising would be considered acceptable and what would be considered discriminatory?

Any advertising that describes the property would be considered acceptable, while advertising that describes buyers could be considered discriminatory

Advertising Awareness (Familial Status)

As we've seen with the other protected classes, when writing an ad, a licensee should never state a precise preference, limitation or discrimination that is based on familial status. Advertisements may not contain limitations on the number or ages of children, or state a preference for adults, couples or singles. For examples, a licensee should never use phrases such as couples only, empty nesters, single person, no families, mature individuals or senior discount. As we discussed on the previous page, advertisements that include descriptions of the property, services or facilities, or neighborhoods are not considered discriminatory advertising. For example, a licensee could use phrases such as two bedroom, cozy, family room, no bicycles allowed, or quiet streets without violating anti-discrimination laws. In light of what we have just discussed, it's important for licensees to view any advertising from the perspective of all the protected classes. When composing advertising, licensees should ask themselves how they would feel if they were a member of a minority and were reading the ad. This is a good guideline to help in determining whether or not the licensee should publish the ad.

Federal Fair Lending Laws

As you may recall from a previous chapter, federal lending laws protect consumers from discrimination related to applying for and obtaining financing.

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.

Department of Fair Employment and Housing (DFEH)

California government agency responsible for administering the Fair Employment and Housing Act (FEHA), including investigation of complaints and issuing right-to-sue letters and/or prosecuting possible violations; Also regulates Unruh Act

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.

There are a variety of miscellaneous California statutes that prohibit discrimination in housing. They include:

Civil Codes 51.2 through 51.4 and 51.0 through 51.1 address the need for accessible senior citizen housing by setting age limitations and qualifications for acceptable senior housing. Civil Code 51.9 specifically prohibits sexual harassment of a tenant by a landlord or property manager. Civil Code 53 prohibits discriminatory provisions in written instruments related to conveyance, encumbrances, leasing, or mortgaging real property. Civil Code 54.1 declares that blind persons, deaf persons, or any other disabled persons are entitled to full and equal housing accommodations. Civil Codes 782 and 782.5 void any discriminatory provisions in deeds and other written instruments related to real property. Health and Safety Code 33050 forbids discrimination related to community redevelopment projects on the basis of race, color, religion, sex, marital status, national origin, or ancestry Health and Safety Code 33769 requires that housing dwellings constructed with redevelopment agency funds are available without regards to race, color, religion, national origin, or ancestry. Health and Safety Code 37923 requires that housing accommodations constructed or rehabbed with community development funds be available without regards to race, color, religion, nation origin, or ancestry. Government Code 12956.1 allows anyone who holds an ownership interest in a property that possibly has a restrictive covenant violating fair housing laws to file a complaint with the DFEH

When an applicant applies for credit, a lender may not do the following: Under the Equal Credit Opportunity Act

Discourage the applicant from applying because of sex, marital status, age, race, national origin, or because he or she receives public assistance income. Ask the applicant to reveal sex, race, national origin, or religion. A lender may ask the applicant to disclose this information (except for religion) voluntarily if applying for a real estate loan. This information helps federal agencies enforce anti-discrimination laws. Ask if the applicant is widowed or divorced. Ask about marital status if the applicant is applying for a separate, unsecured account. However, a lender may ask the applicant to provide this information if he or she lives in a "community property" state. Inquire about the applicant's plans for having or raising children. Ask if the applicant receives alimony or child support, unless the applicant will rely on these payments to get credit. The lender may ask if the applicant has to pay alimony or child support.

What does the Equal Credit Opportunity Act prohibit?

Discrimination against applicants on the basis of race, color, religion, national origin, sex, marital status, age, or dependency on public assistance

Give four examples of words or phrases that would be considered discriminatory, and three that would not, with regard to handicap when writing an ad. (See page 20 for other correct answers.)

Discriminatory - no wheelchairs, able-bodied persons only, no deaf, or no handicapped parking Non-discriminatory - fourth-floor walk-up, walk-in closets, wheelchair ramp

What is the definition of discriminatory advertising?

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.

Housing discriminations can bring

Divisiveness Anger Discomfort Social upheaval Discrimination obviously affects the person or persons who are the target of the discrimination, but it also affects others as well. It is the responsibility of the real estate community to see to it that we have no part in perpetrating discrimination in our marketplace. It would hopefully be our goal that all real estate agents will renew their ongoing commitment to uphold the spirit and intent of the Fair Housing Laws.

Dealing with Testers

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.

Exception for the Familial Status of the 1988 Fair Housing Amendments Act

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 a property 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.

Fair Employment and Housing Act (FEHA)

Fair Employment and Housing Act (FEHA) The FEHA makes it illegal for an owner to do any of the following: Discriminate or harass any person associated with a protected class Make either a written or oral investigation concerning the protected class of a person seeking housing accommodations. Harass, evict, or discriminate against anyone who files a fair housing complaint or helps another person exercise their fair housing rights. It's important to point out the FEHA specifically defines an "owner" as: A real estate broker or salesperson Lessee Sub-lessee Assignee Managing agent Any person having legal or equitable right of ownership or possession or the right to lease or rent housing There are two exemptions under FEHA: The rental or lease of a portion of an owner-occupied single-family home when the sharing of living areas is involved. However, the owner must still comply with FEHA's regulations on discriminatory notices, statements, and advertising. Religious organizations which own or operate housing accommodations for non-commercial purposes, either directly or through a related non-profit institution or organization, may give a preference to persons of the same religion in the sale, rental, or occupancy of such accommodations. While the Federal Housing Amendments Act includes additional exemptions, those are overridden by the FEHA. Therefore, even if someone is not violating federal fair housing laws, there is still cause for a discrimination case in California if it violates California's more stringent fair housing laws.

In addition to the federal fair housing laws we've been discussing, California also has fair housing laws and regulations that address housing discrimination:

Fair Employment and Housing Act (FEHA) Unruh Act Holden Act Miscellaneous California Statutes

Loan Application Register (LAR)

Financial institutions are required to submit their LARs electronically every year in March to the Federal Financial Institutions Examination Council (FFIEC), an interagency body that administers HMDA. institution must disclose a modified version of the LAR and make it available to the public at its home office within three business days after it is posted on the FFIEC website Also, an institution must make its loan application register available to the public after deleting the following fields which specifically identify a loan: application or loan number, date application received, and date of action taken. These deletions/modifications are required to protect the privacy interests of applicants and borrowers. The modified HMDALAR for a given year must be publicly available for the previous calendar year by March 31 of the following year for requests received on or before March 1, and within 30 days for requests received after March 1.

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 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

New Construction and Renovation On PAR with the ADA requirements

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.

Enforcement OF ( Rumford and Unruh )

If a complaint is filed with DFEH within the required time-frame (a year from the incident unless the violation is a hate crime), the DFEH will conduct an investigation, determine if the claim is valid, and attempt to reach a settlement between the two parties. If a settlement cannot be reached, and the DFEH believes the complaint is valid, the person being accused of violating rights will have to appear at an administrative hearing or civil suit. It is not required to file a complaint with DFEH in order to file a private lawsuit. However, if a person chooses to file a private lawsuit, the DFEH will not act on a complaint associated with the lawsuit. Essentially, you can do one, but not both.

Advertising Awareness (Religion )

If a licensee creates an ad which is explicit in its preference for or limitation of any particular religion, the ad is discriminatory. For example, licensees should never use phrases such as no Jews or Christian home. Advertisements which use the legal name of an entity which contains a religious reference or ads which contain a religious symbol, standing alone, may designate a religious preference. For example, the name Roselawn Catholic Home or a picture of a cross could imply a preference for someone of that religion. However, if the licensee uses a disclaimer in the ad - such as the statement "This Home does not discriminate on the basis of race, color, religion, national origin, sex, handicap, or familial status" - it will not be considered discriminatory advertising. If a licensee creates an ad which contains descriptions of properties or services which do not indicate a preference for the kind of person who would use those facilities, the ad would not be considered discriminatory. For example, phrases such as apartment complex with chapel or kosher meals available are not discriminatory. NOTE: A licensee can use common terms that relate to religious holidays, such as Santa Claus, the Easter Bunny, or St. Valentine's Day, or phrases such as Merry Christmas and Happy Easter without violating discrimination laws.

Advertising Awareness (Race, Color, or National Origin)

If a licensee uses words that describe the housing, the current or potential residents or the neighbors or neighborhood in racial or ethnic terms, he or she will create liability for discriminatory advertising. For example, phrases such as white family home or no Irish are discriminatory. However, if the licensee creates ads which are racially neutral, he or she will have no liability. For example, phrases such as master bedroom, rare find, or desirable neighborhood are not considered discriminatory.

Advertising Awareness (Sex)

If a licensee writes an ad for a single-family home or a separate unit in a multi-family dwelling, the ad must not have an overt preference for or limitation of any person that is based on gender. For example, an ad should never read males only, men only, women only, females only, or other like phrases, unless the ad is describing shared living areas or homes used exclusively as dormitories by educational institutions. There are some terms that may appear on their face to be a reference to sex, but since they are commonly used as physical descriptions of housing units, they are not considered discriminatory advertising. For example, terms such as mother-in-law suite and bachelor apartment fall into the category of nondiscriminatory terms. Also, the term master bedroom is not a violation of either the gender or race discrimination provisions, so it too can be used freely

Jones v. Mayer

In a 1968 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.

Buchanan v. Warley (1917)

In the city of Louisville, Kentucky, a state law prohibited blacks from living in neighborhoods where the majority of homes were occupied by whites and also restricted whites from residing in majority black neighborhoods. A white seller sued a black purchaser who claimed that their contract was void because the law barred him from buying the home. The Supreme Court held that the law violated the fourteenth amendment and therefore was unconstitutional. The court reasoned that while the objective may have been legitimate, laws cannot deny rights protected by the Constitution.

Brown v. Board of Education (1954)

In this landmark case, the Supreme Court prohibited racial segregation of public schools. The court said that the "separate but equal" doctrine adopted in Plessy v. Ferguson had no place in the field of public education.

What remedies does the Department of Fair Employment and Housing provide to victims of fair housing discrimination?

Injunctions requiring the sale or rental of the housing Actual or punitive damages (no limits) Civil penalties up to $50,000

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

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

Home Mortgage Disclosure Act 1975

It requires financial institutions to maintain and disclose data about home purchases, home purchase pre-approvals, home improvement, and refinance applications involving 1 to 4 unit and multifamily dwellings. This data must be disclosed annually. HMDA also requires branches and loan centers to display a HMDA poster. The Federal Reserve Board designed HMDA to: Help public officials to distribute public-sector investments. Discover if financial institutions are serving housing needs of communities. Identify where there are discriminatory lending practices.

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 Not only does the reputation of the industry depend on it, but the consequences for violations are serious. A licensee could lose substantial income if his or her license is suspended or revoked.

Why is it important for licensees to know fair housing laws?

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.

Licensees share in the responsibility of complying with fair housing laws. Licensees should:

Know the fair housing laws and their responsibilities for compliance. Act in accordance with the law at all times. Learn to keep clear and accurate records. Attend fair housing training seminars periodically. Know the resources to use if misconduct needs to be reported.

Some examples of discrimination that we still see today include:

Landlords and sellers requesting only specific types of persons be shown their homes and apartments Sellers showing concern over what their neighbors would say or do if a minority person or family were to move in Buyers and renters making derogatory statements about parts of the community Buyers and renters asking very pointed and discriminatory questions about "aspects" of the neighborhood Buyers and renters refusing to view properties in parts of the community where certain people live

Brokers should also do the following.

Maintain the concept of fair housing in all forms of advertising. Provide ongoing training and education to all affiliated licensees by holding seminars and workshops, watching videos, and bringing in guest speakers. Appropriate training is also available through NAR, state, and local boards and real estate schools. Report blatant misconduct by other licensees. This can prove to be a very uncomfortable situation for a broker, but when violations are obvious, the behavior should be reported to the proper authority. Put a system in place to monitor the activities of all affiliated licensees with regard to fair housing compliance. Ask licensees to keep records of all prospects, their qualifying information, and the prospects reactions to the property they were shown. Review the records periodically to help identify any situations where the licensee may be in violation of fair housing issues. Include a Fair Housing Policy for their office in the Policy and Procedures Manual.

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.

More prohibited activities include the following.

Making an effort to discourage or prevent a sale or rental through the representation of actual or alleged community opposition Representing desirability of particular properties Agreeing not to show property Advertising or causing advertising to be done in a manner that indicates discrimination Using wording that indicates preferential treatment Selectively advertising in a way that will cause discrimination Maintaining different pricing, rent, cleaning, or security deposit structures for different groups Financing in a discriminatory manner Discriminating when providing management services Discriminating against owners, occupants, visitors, or guests Making an effort to encourage discrimination among other licensees or their employees Establishing or implementing discriminatory rules in multiple listings and other services Assisting anyone who intends to discriminate

Which additional discriminatory classes does the California Fair Employment and Housing Act include that the Federal Fair Housing Act does not?

Marital status, ancestry, sexual orientation, and source of incomeNote - the FEHA clarifies that the protected class of "sex" includes gender identity.

More on Advertising

Newspaper ads comprise a large percentage of the advertising done by real estate licensees. It's important that newspaper ads do not give so much as a hint of discrimination, even unintentionally. Here are some guidelines to follow: Be sure to use a wide variety of newspapers, so that you don't give an impression of racial steering. For example, if you list a home in a predominantly minority neighborhood, be sure to advertise in a city-wide newspaper and not just that neighborhood's weekly newspaper. When using pictures of people in your advertising, be sure the pictures show that the housing is open to everyone. For example, don't use all white people in an ad if the area's population is 32% non-white. Use the Equal Opportunity logo or slogan in all of your advertising. In addition, a broker should have the Equal Opportunity Poster displayed prominently in all of his or her offices.

Barrier Removal Requirements

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.

Describe panic selling.

Panic selling is inducing someone to sell by saying that persons of a certain protected class are moving into the neighborhood. It is specifically outlined in California Code as an illegal business practice.

List two steps a broker should take to ensure compliance with fair housing laws. (See page 46 and 47 for additional correct answers.)

Prominently display in all offices the Equal Opportunity Poster that HUD distributes. Provide ongoing training and education to all affiliated licensees by holding seminars and workshops, watching videos, and bringing in guest speakers.

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. In response to the 1988 Fair Housing Amendments Act

Examples of discrimination in lending include:

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

The discriminatory practices based on race, color, sex, religion, ancestry, handicap, marital status, familial status, sexual orientation, national origin, or source of income that California prohibits include the following activities, some of which we've already discussed.

Refusing to negotiate for the sale, rental, or financing of a property Refusing or failing to show, rent, sell, or finance a property Discriminating against any person in the sale or purchase, collection or payments, or performance of services in connection with contracts or loans Refusing to negotiate for the sale, rental, or financing of a property Refusing or failing to show, rent, sell, or finance a property Discriminating against any person in the sale or purchase, collection or payments, or performance of services in connection with contracts or loans Discriminating in the terms, conditions, or privileges of sale, rental, or financing of a property Discriminating in processing applications or referring prospects to other licensees because they belong to a protected class Representing real property as not available for inspection, sale, or rental when it is Processing an application more slowly or delaying a transaction Making an effort to encourage discrimination in the showing, sale, lease, or financing of property Refusing to assist another licensee in negotiating a sale, rental, or financing Making an effort to obstruct, hinder, or discourage a purchase, lease, or financing in a certain neighborhood Performing acts or making statements which express or imply a limitation, preference, or discrimination Coercing, intimidating, threatening, or interfering with a person's enjoyment of a property or retaliating against someone who filed a fair housing complaint Soliciting sales, rentals, or listings restrictively Maintaining restrictive waiting lists Seeking to discourage or prevent transactions because of the presence or absence of members of a protected class Discriminating in the terms, conditions, or privileges of sale, rental, or financing of a property Discriminating in processing applications or referring prospects to other licensees because they belong to a protected class Representing real property as not available for inspection, sale, or rental when it is Processing an application more slowly or delaying a transaction Making an effort to encourage discrimination in the showing, sale, lease, or financing of property Refusing to assist another licensee in negotiating a sale, rental, or financing Making an effort to obstruct, hinder, or discourage a purchase, lease, or financing in a certain neighborhood Performing acts or making statements which express or imply a limitation, preference, or discrimination Coercing, intimidating, threatening, or interfering with a person's enjoyment of a property or retaliating against someone who filed a fair housing complaint Soliciting sales, rentals, or listings restrictively Maintaining restrictive waiting lists Seeking to discourage or prevent transactions because of the presence or absence of members of a protected class

What is an example of discrimination in lending?

Refusing to purchase a loan "Examples of discrimination in lending include 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; and setting different conditions for a loan purchase."

Examples of discrimination 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 a 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

List three examples of discriminatory practices in real estate. (See page 43 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

Remedies Available

Remedies available from the Department of Fair Employment and Housing include: Injunctions requiring the sale or rental of the housing Actual or punitive damages (there is no limit on the amount) Civil penalties up to $50,000 Private lawsuit remedies involving the Unruh Act include: Actual damages Penalty up to three times the amount of actual damages Injunctions Attorney's fees Private lawsuit remedies involving the Fair Employment and Housing Act include: Actual, compensatory, and punitive damages Injunctions Attorney's fees

Community Reinvestment Act of 1977

Required banks to make credit available in poor communities, preventing the decay of low—income neighborhoods in inner cities revent redlining and to encourage banks and thrifts to help meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods. It expands and clarifies the expectation that banks will serve the convenience and needs of their local communities.

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. 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.

Salesperson Sally tells her senior citizen buyers that the home they want to view is located in a neighborhood with several small children and loud teenagers. She tells them they would not be comfortable in this home and she shows them a list of homes in other neighborhoods she thinks would be more appropriate. What would you say about Sally's behavior?

Sally is guilty of steering which is prohibited by Fair Housing laws.

the Federal Fair Housing Act covers many of the same discrimination categories. However, it's important to note that the California Fair Employment and Housing Act also prohibits housing discrimination based on marital status, ancestry, sexual orientation, and source of income. It's important to address a couple of important definitions outlined in the FEHA:

Sexual orientation specifically prohibits discrimination based on heterosexuality, bisexuality, lesbian, gay, etc. Source of income means that a housing provider cannot discriminate based off where lawful, verifiable income is received. However, the housing provider is allowed to ask information on specific amounts of income and their source. Sex is defined to include gender identity. This includes gender related appearance and expression, regardless if the expression is stereotypically associated with the person's sex as assigned at birth. For example, a housing provider may not discriminate if a male tenant or client dresses in female clothing.

What describes the channeling of home buyers toward or away from homes in certain neighborhoods in order to preserve or alter the makeup of that neighborhood?

Steering

Because the Supreme Court has ruled testing is legal, how should agents view the practice of testing in real estate?

Testing for fair housing compliance must be recognized as a risk and a cost of doing business.

What is testing?

Testing is a simulated housing transaction designed to obtain evidence of differential treatment based on an individual's protected class status.

How can testing be beneficial?

Testing, coupled with good documentation and record keeping, can clearly demonstrate a real estate agency's innocence when faced with a fair housing complaint.

What does the Home Mortgage Disclosure Act require?

That lenders report statistical information each year to insure that lenders are not restricting loans to certain individuals or neighborhoods to exclude them from obtaining a mortgage

What Act was passed in 1977 to prevent redlining and to encourage banks and thrifts to help meet the credit needs of all segments of their communities?

The Community Reinvestment Act

ADA 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.

What Act prohibits lenders from discriminating against applicants on the basis of race, color, religion, national origin, sex, marital status, age or dependency on public assistance?

The Equal Credit Opportunity Act

Equal Credit Opportunity Act

The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against applicants on the basis of Race Color Religion National origin Sex Marital status Age Dependency on public assistance ECOA expects a lender to base lending decisions on an individual's income, net worth, job stability, and credit rating. Lenders are required to inform an applicant who was rejected of the reasons for the denial. This notice must be in writing and given within 30 days.

Fair Credit Reporting Act (Title Vl of the Consumer Credit Protection Act) 1968

The Fair Credit Reporting Act, or Title VI of the Consumer Credit Protection Act of 1968, requires that lenders: Keep all credit information confidential. Obtain authorization from a consumer in order to seek the customer's credit information. Reveal the sources of the credit information to the consumer. This item makes it possible for consumers to identify and correct errors on their credit reports.

What does the Holden Act prohibit?

The Holden Act prohibits financial institutions from discriminating in loan activities on the basis of race, color, religion, marital status, national origin, ancestry, or sex.

What Act added sex to the list of protected classes in 1974?

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

Describe the Unruh Act.

The Unruh Civil Rights Act of 1959 provides protection from discrimination by all business establishments in California, including housing and public accommodations.

According to the Fair Credit Reporting Act, from whom must a lender seek authorization to get a consumer's credit report?

The consumer

According to the provisions of the HMDA, companies covered under HMDA are required to keep a Loan Application Register (LAR). Each time a person applies for a home mortgage at an institution covered by HMDA, that institution must make a corresponding entry into the register, documenting the following information:

The date of application The loan type The type of property involved (single-family, multifamily) The purpose of the loan (home purchase, home improvement, refinancing) Owner occupancy of the property (owner occupied or non-owner occupied) The loan amount Whether or not the application was a request for pre-approval The type of action taken (approved, denied, withdrawn etc.) The date of action taken The location (state, county, Metropolitan Statistical Area (MSA) or Metropolitan Division (MD), and census tract) of the property The ethnicity of the borrower(s) The race of the borrower(s) The gender of the borrower(s) The gross annual income of the borrower(s) The type of entity that purchased the loan if it was subsequently sold in the secondary market If the loan was denied, the reason why it was denied Rate Spread (Rate spread is a metric that assists in reporting if the rate given to the borrower is above a certain threshold of the prevailing rates at the time of the application) If the loan is or is not subject to the Home Ownership and Equity Protection Act of 1994 Lien status of the loan (1st or 2nd lien)

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.

Who the Home Mortgage Disclosure Act Applies To (HMDA)

The regulations outlined in the HMDA cover two categories of financial institutions. The first category is a "depository institution," which the regulation defines as a bank, savings association, or a credit union that meets all of the following criteria: The second category is a for-profit, nondepository "mortgage lending institution." A nondepository mortgage lending institution is covered if it meets all of the following criteria.

What are civil rights laws in the real estate industry designed to do?

They are designed to create a situation where persons having similar financial means have similar choices when attempting to buy, lease, rent, or finance property.

Plessy v. Ferguson (1896)

This Supreme Court decision allowed the use of "separate but equal" racially-segregated accommodations and facilities. In other words, as long as separate housing for blacks and whites were judged to be equal, they were legal.

What was the significance of the Plessy v. Ferguson Supreme Court decision of 1896?

This Supreme Court decision allowed the use of "separate but equal" racially-segregated accommodations and facilities. In other words, as long as separate housing for blacks and whites were judged to be equal, they were legal.

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.

Why was the Community Reinvestment Act passed?

To prevent redlining and to encourage banks and thrifts to help meet the credit needs of all segments of their communities, including low- and moderate-income neighborhoods

What is the best way to avoid fair housing complaints?

Treat everyone the same

1988 Fair Housing Amendments Act 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, including households in the process of adopting a child, obtaining custody of a child, getting guardianship of a child, or who provide foster care for children.

When doing newspaper advertising, how could you avoid an impression of racial steering?

Use a wide variety of newspapers, not just the local or neighborhood paper.

Brokers have a responsibility to comply with fair housing policies. They must maintain a fair housing office. A broker should take these steps to ensure compliance with fair housing laws.

Violations of either Federal or State fair housing laws carry penalties and fines, so brokers must be careful about avoiding these violations Follow the suggestion of the National Association of REALTORS® and post a sign which states it is against company policy as well as state and federal laws to offer any information on the racial, ethnic, or religious makeup of a neighborhood or to restrict the listing, showing, or giving of information on the availability of homes for any of those reasons. Prominently display in all offices the Equal Opportunity Poster that the Department of Housing and Urban Development (HUD) distributes.

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

Conciliation

a method of outside resolution of labor and management differences in which a third party is brought in to keep the two sides talking 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.

And in 1988, the Fair Housing Amendments Act

added handicap and familial status. 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

In 1974, the Housing and Community Development Act

added sex to the list of protected classes.

If an agent is faced with questions outside the realm of his or her expertise it is best for the agent to refer such questions to

an expert. It's common for agents to be faced with questions that are outside their realm of expertise or knowledge. It's best for agents to refer such questions to people who are experts in those fields.

Title VI of the Civil Rights Act of 1964

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

Disclosure and Enforcement

institution must retain its full (unmodified) HMDA-LAR for at least three years for examination purposes. It must also be prepared to make each modified HMDA-LAR available for three years and each FFIEC disclosure statement available for five years. Institutions may impose reasonable fees for costs incurred in providing or producing the data for public release. Finally, institutions must post a notice at their home office and at each branch in an MSA to advise the public of the availability of the disclosure statements. As set forth in Section 305 of HMDA (12 USC 2804), compliance with the act and regulation is enforced by the Office of the Comptroller of Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Consumer Financial Protection Bureau, and the U.S. Department of Housing and Urban Development. Administrative sanctions, including civil money penalties, may be imposed by the supervisory agencies. Note: An error in compiling or recording loan data is not a violation of the act or the regulation if it was unintentional and occurred despite the maintenance of procedures reasonably adopted to avoid such errors.

Americans with Disabilities Act (ADA) 1992

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

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

Civil Rights Act of 1866

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. First law

Housing Financial Discrimination Act of 1977 (Holden)

prohibits financial institutions from discriminating in loan activities on the basis of race, color, religion, marital status, national origin, ancestry, or sex. Holden Act prohibits financial institutions from discriminating based on a neighborhood's make-up (redlining). However, a financial institution may claim an exemption on a case-by-case basis if it can show that evaluating the trends, characteristics, or conditions in a neighborhood is required to avoid an unsafe or unsound business practice in a specific case. This possible exemption is only related to trends or conditions in a neighborhood, NOT based on a specific protected class. Complaints of the Holden Act may be filed with the California Secretary of Business, Transportation and Housing, who must investigate the complaints and take remedial action as required by law. California lenders are required to prove to the state they are not participating in racially discriminated lending practices by providing reports showing what percentage of loan applications and approvals were made to the various racial and ethnic groups. Complaints of the Holden Act may be filed with the California Secretary of Business, Transportation and Housing, who must investigate the complaints and take remedial action as required by law.

Unruh Civil Rights Act 1959

provides protection from discrimination by all business establishments in California, including housing and public accommodations. California Code Section 51 outlines the following protected groups: Age Ancestry Color Disability Genetic Information Medical Conditions Marital Status National Origin Race Religion Sex (including pregnancy, gender, and gender expression) Sexual Orientation Persons who believe they have experienced discrimination may file a complaint with the California Department of Fair Employment and Housing (DFEH). The complaint must be filed within one year of the alleged discrimination. If the case is a hate crime, the compliant must be filed within one year of the victim knowing the identity of the offender but not more than three years from the date of the incident. The Unruh Act provides for remedies which could include out-of-pocket expenses, a cease and desist order, or damages for emotional distress. Court-ordered damages may include a maximum of three times the amount of actual damages, but no less than $4,000 in statutory damages.

Arbitration

settling a dispute by agreeing to accept the decision of an impartial outsider

Fair Employment and Housing Act (FEHA) of 1963 (Rumford Act)

specifically prohibits housing discrimination based on the following protective classes: Race Color Religion Sex Sexual orientation Marital status National origin Ancestry Familial status Disability Source of income

Fair Housing Act requires

that new construction buildings that are ready for first occupancy after March 13, 1991 adhere to the following requirements: 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 These requirements only apply to buildings with an elevator and four or more units. If a building with four or more units has no elevator and will be ready for first occupancy after March 13, 1991, these standards only apply to ground floor units. Note: These requirements for new buildings do not replace stricter standards that apply in state or local law.

Title VIII of the Civil Rights Act of 1968 is also known as

the Fair Housing Act.

Testers

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 A tester who receives misrepresentation from renters, sellers, or real estate agents has legal standing to file a complaint under the Fair Housing Act.