Lesson 5: Fair Housing Laws Lesson 6: Ethics of Practice as a License Holder
What is the name of the professional organization that created the Code of Ethics and keeps it up to date? The Nation Board of Real Estate Brokers The Texas Association of REALTORS® The World Association of REALTORS® The National Association of REALTORS®
NATIONAL ASSOCIATION Feedback: The National Association of REALTORS® created the Code of Ethics. It was adopted in 1913. NAR reviews it annually to keep it up to date.
Which one of the following situations best describes an unethical practice? A broker accepts a bribe from a seller in order to embellish the details of a property. A broker unknowingly falsely advertises a property due to misrepresentations made by the seller. The seller withholds property value information from the broker, who having no reason not to believe the seller, does not research this information. The broker does not disclose confidential information to a buyer.
A BROKER ACCEPTS A BRIBE Feedback: The practice of accepting bribes to turn a blind eye is not only an unethical practice but violates the law of agency and potentially the Deceptive Trade Practices Act. In the other three situations, the broker was not aware of the false or misleading information and had no reason to believe it to be false. There was no way the broker should have or could have known of any falsehood and as always confidentiality is a fiduciary obligation.
A disabled person has _______. A physical impairment that affects the performance of major life activities A physical or mental impairment that affects the performance of major life activities A mental impairment that affects the performance of some significant activities An addiction to illegal drugs
A PHYSICAL OR MENTAL IMPAIRMENT THAT AFFECTS THE PERFORMANCE OF MAJOR LIFE ACTIVITIES Feedback: The law states that a disability is any physical or mental impairment that limits one or more of a person's major life activities, such as walking, talking, hearing, seeing, breathing, learning, performing manual tasks, and caring for oneself. This definition thus includes a variety of conditions, such as being infected with HIV or having AIDS, being an alcoholic, and having a learning disability. It is worth noting here that while alcoholism is considered a disability, being addicted to illegal drugs is not.
Which one of the following characteristics is NOT protected from inquiry or disclosure by real estate licensees under the Texas Real Estate Commission Discriminatory Practices? Race Ancestry Familial status Age
AGE Feedback: Real estate licensees are prohibited from using discriminatory practices on the bases of race, color, religion, sex, national origin, ancestry, familial status or handicap. Discrimination based on age is not governed under the Texas Real Estate Commission rule, but it is prohibited under the Equal Credit Opportunity Act.
Which of the following classes is NOT among the protected classes established by the Fair Housing Act? Race and color Gender and familial status National origin and religion Age and sexual orientation
AGE AND SEXUAL ORIENTATION Feedback: Race, color, national origin, gender, familial status, religion and disability are all protected classes under the Federal Fair Housing Act. Although age and sexual orientation are not protected under the federal statute there may be some local protected classes that apply. Age is protected from discrimination under the Equal Credit Opportunity Act (ECOA).
Which one of the following actions is NOT required of REALTORS® by Article 14 of the Code? Cooperate with the Board by presenting all pertinent facts and evidence Appear before the commission of REALTORS® that is affected by their actions Appear as a witness as required by the Board Answer any charges that are requested by the Board
APPEAR BEFORE THE COMMISSION OF REALTORS THAT IS AFFECTED BY THEIR ACTIONS Feedback: Article 14 requires REALTORS® to appear before the appropriate boards when charged with unethical practices, cooperate with the board, prohibit the disclosure of allegations or findings and not obstruct the investigation or board proceedings. A complaint made to the commission may result in dealing with the commission vs. the Board of REALTORS® for ethical violations.
Which of the following statements accurately describes the basic issues involved in the Jones vs. Mayer case? A.) A real estate salesperson refused to show a lease property because of the prospective renter's religion and was found guilty of violating the Thirteenth Amendment. B.) An owner refused to sell his home because of the prospective buyer's race and was found guilty of violating the Civil Rights Act of 1866. C.) An owner refused to make an exception to a "no pets" policy and was found guilty of violating the federal Fair Housing Act. D.) An owner refused to rent out his home because of the prospective lessee's sexual orientation and was found guilty of violating Title VIII of the Civil Rights Act of 1968.
B. BUYER'S RACE Feedback: Unlike the federal Fair Housing Act, there are NO EXCEPTIONS to the Civil Rights Act of 1866. This means that you may NEVER turn away a qualified tenant or purchaser because of race or color; neither may you publish an advertisement that discriminates against someone on this basis. In the U.S. Supreme Court case Jones v. Mayer Co. (392 U.S. 409 [1968]), the refusal to sell a home because of the prospective buyer's race was found to be a violation of the law. The court decided that the defendant had violated the Thirteenth Amendment as well as 42 U.S. Code 1982, which provides that all citizens "shall have the same right".
Which of the following statements is TRUE about the NAR Code of Ethics? A.) The Code of Ethics consists of a Preamble and 17 Articles: 1 - 9 covers "Duties to REALTORS®," Articles 10 - 14 are "Duties to Clients," Articles 15, 16, 17 are "Duties to the public". B.) The Code of Ethics consists of 17 Articles: 1 - 9 covers "Duties to Clients and Customers," Articles 10 - 14 are "Duties to the Public," and Articles 15, 16, 17 are "Duties to REALTORS®". C.) The Code of Ethics consists of a Preamble and 17 Articles: 1 - 9 covers "Duties to Clients and Customers," Articles 10 - 14 are "Duties to the Public," and Articles 15, 16, 17 are "Duties to REALTORS®". D.) The Code of Ethics consists of a Preamble and 21 Articles: 1 - 9 covers "Duties to public," Articles 10 - 14 are "Duties to consumers," Articles 15, 16, 17 are "Duties to REALTORS® and 18 - 21 duties to Brokers".
C. PREAMBLE AND 17 ARTICLES Feedback: The NAR Code of Ethics consists of a Preamble and 17 Articles as well standards of practice. Articles 1 - 9 covers "Duties to Clients and Customers," Articles 10 - 14 are "Duties to the Public," and Articles 15, 16, 17 are "Duties to REALTORS®". The Standards of Practice gives an example of how a particular Article has been applied in practice.
The ethical and professional standard for the real estate industry, rules for conduct for real estate licensees is contained in the _______ and is enforced by TREC. Presentation Cannons of Professional Ethics Preamble None of the above
CANNONS OF PROFESSIONAL ETHICS Feedback: TREC's Canons of Professional Ethics are the ethical and professional standard for the real estate industry, published by the Secretary of State in the Texas Administrative Code. These are not laws but rules for the conduct of license holders in the practice of real estate. The Canons are made up of five individual rules written and enforced by TREC.
Which of the following phrases would be considered discriminatory if used in an advertisement? "2-2 available in a Catholic community" "2-2 available for rent in Central Austin" "2-2 available, in great condition, hardwood floors" "2-2 available, near the University"
CATHOLIC COMMUNITY Feedback: Discriminatory advertising uses words, phrases, symbols, visual aids, or media in the advertising of real estate that may indicate the advertiser's preference for or prejudice against members of a protected class. In this case, the mention of a specific religion may indicate a preference to the Catholic faith.
Among the following actions, which one is NOT a violation of fair housing legislation? Denying a mortgage loan because the applicant is white Refusing to provide loan information to a pregnant woman Denying a loan application because of an applicant's credit history Imposing higher interest rates on religious borrowers
CREDIT HISTORY Feedback: Denying services on the basis of color as well as familial status (with child) and unfair treatment on the basis of religion are all violations of the law. Denying a loan due to the inability for an individual to qualify based on creditworthiness is acceptable. A lender would not make a loan to someone who does not qualify; this denial is not based on any protected classes.
Which rule should REALTORS® use as a guide for making ethical decisions? The Real Estate Code The Golden Rule The Fair Treatment Rule The Equality Rule
GOLDEN Feedback: The Golden Rule: do unto to others as you wish others do unto you; treat others as you would like to be treated. The Golden Rule is the basis for making ethical decisions.
According to Article 15, what are REALTORS® prohibited from doing? Disclosing an ethics committee finding without authorization Obstructing an investigation into an ethics violation Making false or misleading statements about competitors Filing libel or slander suits against the Board
MAKING FALSE OR MISLEADING Feedback: Duties to REALTORS® covered by Article 15 prohibit discrediting the competition by making false or misleading statements about other business associates or competitors. Although the other statements are prohibited under Article 14, they may also violate other laws.
In which one of the following situations is the sale or rental of a single-family residence exempt from the Fair Housing Act? The owner owns or owns interest in more than three single-family residences at one time. The owner is the most recent occupant of the dwelling being sold and has had at least one exempt sale in the past 24 months. The owner does not use any discriminatory advertising and owns at least one dwelling designed for occupancy by five families or more. The owner does not use the facilities or services of a real estate licensee, broker, salesman or anyone engaged in the sale or rental of dwellings.
OWN OR OWNS INTEREST IN MORE THAN 3 Feedback: The sale or rental of a single family residence is not bound by the Act, provided that the property owner does not own or own any interest in more than three single-family residences at one time; the owner is only granted one exempt sale in any 24-month period. And the owner does not use the facilities or services of a real estate licensee, broker or salesperson or anyone else engaged in the business of selling or renting dwellings. The owner must also not use any discriminatory advertising.
The introduction to the Code of Ethics is called the _______. Presentation Cannons of Professional Ethics Preamble None of the above
PREAMBLE Feedback: The Preamble is an introduction to the Code of Ethics.
According to Article 1 of the Code of Ethics, REALTORS® are contractually obligated to do which of the following things? Protect and promote the interests of their clients Be faithful to their clients at all costs Try to earn the best commission Promote the interests of their firm
PROTECT AND PROMOTE THE INTEREST OF ALL THEIR CLIENTS Feedback: Under Article 1 of the Code of Ethics, REALTORS® are obligated to protect and promote the interests of their clients. Yes, you should be faithful and try and earn the best possible commission and be concerned about the interests of the firm, but the clients' interest must be put above that of your own and your firm.
According to the reasonable accommodation section of the federal Fair Housing Act, who must pay for reasonable modifications for a disabled tenant? The landlord The tenant HUD The Office of Thrift Supervision
TENANT Feedback: Under fair housing laws, the landlord must allow a disabled tenant to make reasonable accommodations at the tenant's own expense such as widening doorways, grab bars or ramps. A reasonable accommodation is a modification that allows a handicapped person the ability to enjoy and use his or her dwelling to the fullest taking into account the disability. A landlord cannot charge a higher security deposit for disabled tenants. If the tenant elects to modify the apartment in a way that renders it less usable for non-disabled tenants (for example, if the tenant chooses to lower the kitchen counters), then the landlord may require that the tenant return the property to its original state upon termination of the lease.
Which one of the following acts has become known as the federal Fair Housing Act? Title VII of the Civil Rights Act of 1968 Title VIII of the Civil Rights Act of 1968 The Civil Rights Act of 1886 Title VIII of the Civil Rights Act of 1866
TITTLE VIII OF THE CIVIL RIGHTS ACT OF 1968 Feedback: The Civil Rights Act of 1866 was passed by Congress on April 9, 1866. Executive Order 11063 was passed, which prohibits discrimination in the selling or leasing of property owned or funded by the federal government, including those properties relying upon Veterans Administration (VA) and Federal Housing Administration (FHA) loans. The Civil Rights Act of 1964 included a prohibition against discrimination on the basis of race, color, and national origin in any program or service funded by the federal government. Later, Congress passed the Civil Rights Act of 1968. Title VIII of this Act, also known as the Fair Housing Act.