Real Estate Principle Chapter 5,6,7

general account

A broker or agent's personal or business account, not to be commingled with trust funds.

dual agent

A broker who represents both parties in a real estate transaction.

dwelling

A building occupied or designed to be occupied as a residence by one or more families.

Federal Fair Housing Act (FFHA)

A collection of policies designed to prevent discrimination in the access to housing based on an occupant's inclusion in a protected class.

Chapter 5 Summary

A provision in a listing agreement may authorize the seller's broker to create a subagency between their seller and another broker. Under the subagency provision, the seller's broker may act on behalf of the seller to employ another brokerage office to also act on behalf of the seller to market the property. A dual agent is a broker who is simultaneously representing the best interests of each of the opposing parties in a transaction. Dual agency is to be disclosed to the parties involved at the time the conflict arises. Failure to disclose a dual agency relationship can result in the loss of the brokerage fee, liability for money losses incurred by the clients, and disciplinary action by the California Bureau of Real Estate (CalBRE) on a complaint. Confidential pricing information needs to remain the undisclosed knowledge of the dual agent, unless they are authorized to release the information to the other party. The conflicts that exist in a broker's dual representation rule out aggressive negotiations to obtain the best business advantage for either party. Thus, the principals of a dual agent do not receive the full range of benefits they would have obtained from an exclusive agent.

Familial status

A status which indicates a household includes individuals under the age of 18.

owner's statement.

An accounting on the status, expenditure and location of negotiable trust funds provided to the owner of those funds. Ex) the broker is required to regularly account to the owner on the status, expenditure and location of the negotiable trust funds

subagent

An individual who has been delegated agency duties by the primary agent of the client, not the client themselves.

blockbusting

Examples of (Prohibited) activities by a landlord or property manager include: • encouraging an owner-occupant to offer their home for rent by insinuating that a neighborhood is undergoing or is about to undergo a change in the race, color, religion, sex, handicap, familial status or national origin of its residents • discouraging an owner-occupant from offering their home for rent by claiming the entry of individuals of a particular race, color, religion, sex, familial status, handicap or national origin will result in undesirable consequences for the neighborhood or community, such as an increase in criminal activity or a decline in schools and other facilities.

mediation

HUD then attempts to resolve the dispute by having the parties enter into informal negotiations

trust funds

Items which have or evidence monetary value held by a broker for a client when acting in a real estate transaction. • rents and security deposits collected under a property management agreement • good faith deposits tendered by a buyer with an offer to purchase • fees and costs handed to the broker in advance of their performance of agreed-to services • loan payments and funds on contract collection and loan brokerage • any other personal property of value.

conversion

The unlawful appropriation of another's property, as in the conversion of trust funds. Ex) broker breached their agency duty owed the client by withdrawing the brokerage fee before paying all other obligations the broker agreed to disburse on behalf of the owner, including payment on the loan

Handicapped persons

• a physical or mental impairment which substantially limits the individual's life activities; or • a record of, or are regarded as having, a physical or mental impairment.

Unruh Civil Rights Act

A California law which prohibits discrimination by a business establishment based on sex, race, color, religion, ancestry, national origin, disability or medical condition. A real estate practice is a business establishment

Chapter 7 Summary

A broker has a duty to inform their agents and employees of anti- discrimination rules, including Bureau of Real Estate regulations, the Unruh Civil Rights Act, the California Fair Employment and Housing Act, and the Federal Fair Housing Act. California law prohibits discrimination in the sale or rental of housing accommodations based on race, color, religion, sex, sexual orientation, gender identity, genetic information, marital status, national origin, ancestry, familial status, source of income or disability. The federal Civil Rights Act applies to race discrimination on the rental of all types of real estate, both residential and nonresidential. Racially motivated activities in any real estate leasing transaction are prohibited. The Federal Fair Housing Act (FFHA) prohibits any discriminatory actions a landlord or property manager may take in the handling of a residential rental based on an individual's race or color, national origin, religion, sex, familial status or handicap. Disabled individuals are protected from discrimination when renting or leasing California residential real estate. However, a landlord is not required to structurally modify existing residential rental property to meet the special needs of disabled tenants. Rental policies excluding children under the age of 18 are classified as prohibited discrimination, unless the property qualifies as senior citizen housing.

Civil Rights Act

A federal law which provides broad protections to numerous classes of individuals in the United States against discriminatory activities.

subaccount ledger

An accounting document or file identifying the owner of trust funds and the amount held for the owner.

steering

An unlawful housing practice that includes words or actions by a real estate sales licensee intended to influence the choice of a prospective buyer or tenant

aggrieved individual

Any individual who claims they have been injured by a prohibited discriminatory housing practice under the FFHA or believes they will be injured by such a practice

Disabled individuals

Anyone who has a physical or mental impairment which significantly limits major life activities, has a record of disability, or is regarded as being disabled • has a physical or mental impairment which significantly limits major life activities; • has a record of a disability; or • is regarded as being disabled

Chapter 6 Summary

Funds belonging to others which a broker and their agents handle are called trust funds. Trust funds include rents, security deposits, good faith deposits, advance fees, loan payments, and any other personal property of value. The safekeeping of trust funds is ensured by the imposition of recordkeeping and accounting requirements on brokers when they receive, transfer or disburse trust funds. Trust funds come in many forms, including checks, precious metals/ stones, stocks/bonds, collectibles, promissory notes and any other item or evidence of value handed to the broker or the broker's employee while acting as an agent in a real estate transaction. Trust funds are illegally commingled when a broker deposits the funds into an account other than a dedicated trust fund account. A broker's use of trust funds for any reason other than those expressly authorized by the owner of the funds constitutes a conversion of the client's funds to the broker's own use. Cash and checks held as trust funds are to be deposited into the broker's trust account, held undeposited as instructed, or endorsed and handed to others entitled to the funds. A broker needs to regularly account to the owner on the status, expenditure and location of the negotiable trust funds held by the broker. Similarly, a broker needs to know who owns and controls the funds held in their trust account, identified through the use of subaccount ledgers.

senior citizen housing

• intended for and solely occupied by persons 62 years of age or older • intended and operated for occupancy by persons of 55 years of age or older

Selective reduction

• providing for different terms in a lease, such as the rental charge, security deposit and the term of the lease, than offered by other individuals • delaying or failing to perform maintenance • limiting use of privileges, services or facilities to different classes of individuals • refusing or failing to provide services or facilities due to an individual's refusal to provide sexual favors.