PA RE Practice Quiz #4

Age as a protected class in Pennsylvania is defined as persons a. 40 and older. b. 55 and older. c. 62 and older. d. 65 and older.

A. 40 AND OLDER. The Pennsylvania Human Relations Act (PHRA) is deemed to be "substantially equivalent" to the federal Fair Housing Act, but is more restrictive. The PHRA adds religious creed and ancestry. As a protected class, age is a person 40 years and older.

Complaints relating to the Civil Rights Act of 1866 are a. taken directly to a federal court. b. no longer reviewed in the courts. c. handled by the Department of Housing and Urban Development (HUD). d. handled by state enforcement agencies.

A. ARE TAKEN DIRECTLY TO A FEDERAL COURT. Complaints brought under the Civil Rights Act of 1866 involving racial discrimination must be taken directly to federal court rather than to HUD or state enforcement agencies.

After receiving a fair housing complaint, HUD initiates an investigation and attempts a. conciliation. b. mediation. c. reconciliation. d. arbitration.

A. CONCILIATION. Conciliation is the resolution of a complaint by obtaining assurance that the person against whom the complaint was filed (the respondent) will remedy any violation that may have occurred.

In Pennsylvania, what document must real estate licensees present to all prospective sellers? a. Official Notice b. Lead-based paint hazard disclosure c. Equal housing poster d. Copy of the Pennsylvania Human Relations Act

A. OFFICIAL NOTICE. All real estate licensees are required by the Pennsylvania Human Relations Commission to furnish an Official Notice to any person contemplating listing a property for sale; the purpose is to inform the property owner of both the owner's and the licensee's obligations under the fair housing laws. The lead-based paint hazard disclosure is required only for residential properties built before 1978.

Which statement describes the Supreme Court's decision in Jones v. Alfred H. Mayer Company? a. Racial discrimination is prohibited by any party in the sale or rental of real estate. b. Sales by individual residential homeowners are exempted, provided the owners do not use brokers. c. Laws against discrimination apply only to federally related transactions. d. Persons with disabilities are a protected class.

A. RACIAL DISCRIMINATION IS PROHIBITED BY ANY PARTY IN THE SALE OR RENTAL OF REAL ESTATE. In the 1968 Supreme Court case of Jones v. Alfred H. Mayer Company, the court upheld the Civil Rights Act of 1866 and clearly established that racial discrimination is illegal without exception.

A lender's refusal to lend money to potential homeowners attempting to purchase property located in predominantly minority neighborhoods is a. redlining. b. blockbusting. c. steering. d. qualifying.

A. REDLINING. Redlining refers to a refusal to make loans or write insurance policies in a particular area as a result of policy decisions that properties in that area are not suitable collateral or insurable, regardless of the individual's qualifications.

A newspaper ad read as follows: "Fine executive home in an exclusive neighborhood, suitable for an older couple; near St. Mary's Church." From a fair housing perspective, all of the following may be assumed EXCEPT a. this is a good ad because it is descriptive of the property for sale. b. the words "exclusive neighborhood" could be interpreted to mean that minorities are not welcome. c. it appears that families with children are not welcome. d. the neighborhood could appear to be undesirable for people who do not follow the same religion as St. Mary's Church.

A. THIS IS A GOOD AD BECAUSE IT IS DESCRIPTIVE OF THE PROPERTY FOR SALE. Advertisements of property for sale or rent may not include language indicating a preference or limitation.

The failure to comply with fair housing laws is grounds for disciplinary action against a licensee and is both a civil and criminal violation. a. True b. False

A. TRUE The U.S. Congress and the Supreme Court have created a legal framework that preserves the constitutional rights of all citizens. Real estate licensees cannot allow their own prejudices to interfere with the ethical and legal conduct of their business. However, failure to comply with fair housing laws is both a civil and criminal violation and grounds for disciplinary action against a licensee.

In the Pennsylvania law, the term panic selling is used instead of the term blockbusting, which is the term used in the Department of Housing and Urban Development's (HUD) regulations. a. True b. False

A. TRUE. A critical element in blockbusting, according to HUD's regulations, is the profit motive. Another term for this activity is panic selling, as it is referred to in the Pennsylvania law.

The definition of the term familial status includes a woman who is pregnant. a. True b. False

A. TRUE. Familial status refers to the presence of one or more individuals who have not reached the age of 18 and who live with either a parent or guardian. The term also includes a woman who is pregnant. In effect, this means that the Fair Housing Act's protections extend to families with children.

The intention to discriminate is obvious if policies are established to segregate families with children in certain parts of a housing complex. a. True b. False

A. TRUE. If the owner or the real estate licensee purposely sets different sale or rental prices or sets different requirements for down payments or security deposits to "chill the interest" of certain individuals, the intention to discriminate is obvious. Intent is also obvious if policies are established to segregate families with children in certain parts of a housing complex.

Certain federal exemptions to the Fair Housing Act are not exempt under Pennsylvania law. a. True b. False

A. TRUE. The federal exemptions to fair housing rules include the sale or rental of a single-family home when the home is owned by an individual who does not own more than three such homes at one time (and who does not sell more than one every two years) and when a real estate licensee and discriminatory advertising is not used in the transaction. This exemption does not apply under Pennsylvania law.

Which of these meets the HUD definition of family as a protected class? a. A married couple and an elderly parent over the age of 65 b. A single parent with a foster child age 12 and a son age 19 c. Two middle-aged brothers d. A 62-year-old man with his 55-year-old wife

B. A SINGLE PARENT WITH A FOSTER CHILD AGE 12 AND A SON AGE 19. Familial status is defined as one or more individuals younger than 18 living with a parent or guardian. It also includes pregnant women and anyone who is in the process of assuming custody of a child younger than 18.

"I hear they're moving in. There goes the neighborhood! Better put your house on the market before values drop!" This is an example of what illegal practice? a. Steering b. Blockbusting c. Redlining d. Fraudulent advertising

B. BLOCKBUSTING. Blockbusting is the unlawful act of inducing or attempting to induce people to sell their homes on the basis that the entry, or prospective entry, of members of a protected class will adversely affect property values in the area. Pennsylvania law refers to this activity as panic selling.

After a broker takes a listing agreement for a residence, the owner specifies that he will not sell his home to any Asian family. Which action should the broker take? a. Advertise the property exclusively in Asian-language newspapers. b. Explain to the owner that the instruction violates federal law and that the broker cannot comply with it. c. Abide by the principal's directions, despite the fact that they conflict with the fair housing laws. d. Require that the owner sign a separate legal document stating the additional instruction as an amendment to the listing agreement.

B. EXPLAIN TO THE OWNER THAT THE INSTRUCTION VIOLATES FEDERAL LAW AND THAT THE BROKER CANNOT COMPLY WITH IT. A broker who accepts a listing with the understanding that illegal discrimination will be practiced is in violation of the federal Fair Housing Act. Both the broker and the owner could be prosecuted. The broker must explain that the instruction violates the law and that the broker cannot accept the listing under that condition.

When federal fair housing law has been ruled substantially equivalent to the state law, all complaints in the state are referred to and handled by HUD. a. True b. False

B. FALSE. When a state or municipality has a fair housing law that has been ruled substantially equivalent to the federal law, all complaints in the state filed with HUD are referred to and handled by the local enforcement agency responsible for those laws.

The American with Disabilities Act (ADA) requires that all architectural barriers in existing commercial buildings be removed to maximize accessibility. a. True b. False

B. FALSE. Eliminating all architectural barriers in existing commercial buildings is a massive undertaking and often impractical. The ADA provides reasonable approaches for bringing existing buildings into compliance. Barriers must be removed to maximize accessibility if it is readily achievable to do so. If a barrier cannot be removed, the law provides alternatives, known as reasonable accommodations, to provide accessibility.

The Fair Housing Act requires that housing be made available to individuals who have been convicted of the illegal manufacture or distribution of a controlled substance. a. True b. False

B. FALSE. The Fair Housing Act does not require that housing be made available to individuals whose tenancy would constitute a direct threat to the health or safety of other individuals or that would result in substantial physical damage to the property of others. Individuals who have been convicted of the illegal manufacture or distribution of a controlled substance are not protected under this law.

The Pennsylvania Human Relations Act (PHRA), deemed to be "substantially equivalent" to the federal Fair Housing Act, is less restrictive. a. True b. False

B. FALSE. The PHRA is the state law that prohibits certain discriminatory practices in housing and employment. While the PHRA is deemed to be "substantially equivalent" to the federal Fair Housing Act (an administrative issue), the state law is more restrictive in some respects.

The practice of refusing to issue insurance policies in specific areas for reasons other than the applicant's economic qualifications is known as steering. a. True b. False

B. FALSE. The practice of refusing to make mortgage loans or to issue insurance policies in specific areas for reasons other than the economic qualifications of the applicants is known as redlining. Redlining refers to literally drawing a line around particular areas. This practice is often a major contributor to the deterioration of older or transitional neighborhoods.

The Pennsylvania Human Relations Act applies to a. only single family dwellings and two-to-four family dwellings. b. housing accommodations and commercial property. c. any transaction for the transfer of real property located in Pennsylvania. d. only to housing, but including large apartment communities.

B. HOUSING ACCOMMODATIONS AND COMMERCIAL PROPERTY. Although federal law covers most housing, in some circumstances it provides certain exemptions. Because Pennsylvania's Human Relations Act is more restrictive, most of the federal exemptions do not apply. For example, the federal law exempts owner-occupied buildings of one to four family dwellings. Pennsylvania only recognizes an exemption in the rental of an owner-occupied two-unit dwelling. The Pennsylvania law also applies to commercial property in addition to housing.

Under what situation, if any, may a lender consider age when making a lending decision? a. Never b. If the applicant's income will drop due to retirement c. When the applicant's source of income is public assistance d. When the lender determines that the family income will drop when the wife has a baby

B. IF THE APPLICANT'S INCOME WILL DROP DUE TO RETIREMENT. A creditor may not consider age unless the applicant is too young to legally sign a contract, which is usually 18, although the creditor may consider age if the borrower's income will drop because of retirement. Lenders may not discriminate on source of income or assume that a woman will leave the workforce to raise children.

A minority real estate broker's practice of offering a special discount to minority clients is a. satisfactory. b. illegal. c. legal but ill advised. d. not important.

B. ILLEGAL. Differentiating in terms, conditions, or services because a person is a member of a protected class is a violation of the federal Fair Housing Act. A broker who is a member of a minority group who offers special discounts to clients who are also minorities is violating the law.

Housing that qualifies for exemption from familiar status provisions a. includes housing intended for persons 50 years or older. b. includes a restriction that 80 percent of the units be occupied by persons 55 or older. c. is not permitted under the federal Fair Housing Act. d. is permitted for owner-occupied buildings with four or more units.

B. INCLUDES A RESTRICTION THAT 80 PERCENT OF THE UNITS BE OCCUPIED BY PERSONS 55 OR OLDER. Under the Housing for Older Persons Act (HOPA), housing intended for persons age 62 and older or housing occupied by at least one person 55 years of age or older per unit (where 80 percent of the units are occupied by individuals 55 or older) is exempt from the familial status protection.

What act or law requires that Pennsylvania real estate licensees furnish all prospective sellers the Official Notice? a. Fair Housing Act b. Pennsylvania Human Relations Act c. Pennsylvania Real Estate Licensing and Registration Act d. Lead-based Paint Hazard Disclosure Act

B. PENNSYLVANIA HUMAN RELATIONS ACT. The Pennsylvania Human Relations Act requires all real estate licensees to furnish an Official Notice to any prospective seller that informs the property owner of both the owner's and the licensee's obligations under the fair housing laws.

Which of the following is an illegal reason for a lending institution to refuse to make a residential real estate loan in a particular area? a. Questionable economic situation of the applicant b. Physical location of the property c. Applicant not being of legal age d. Deteriorated condition of the premises

B. PHYSICAL LOCATION OF THE PROPERTY. Redlining is illegal practice of refusing to make mortgage loans or issue insurance policies in specific areas for reasons other than the economic qualifications of the application.

Which is an example of the illegal practice of redlining? a. Placing all families with children on the ground floor of the apartment building b. Refusing to make loans in minority neighborhoods c. Denying an applicant a loan due to lack of credit history d. Obtaining listings by spreading word that a minority family has purchased in the neighborhood

B. REFUSING TO MAKE LOANS IN MINORITY NEIGHBORHOODS. The practice of refusing to make mortgage loans or issue insurance policies in specific areas for reasons other than the economic qualifications of the applicants is known as redlining. Lenders can only refuse a loan solely on sound economic grounds.

Which of the following actions would be considered legal? a. Charging a family with children a higher security deposit than those with no children b. Requiring a person with a disability to establish an escrow account for the costs to restore a property after it has been modified c. Picturing only white people in a brochure as the "happy residents" in a housing community d. Refusing to sell a house to a person who has a history of mental illness

B. REQUIRING A PERSON WITH A DISABILITY TO ESTABLISH AN ESCROW ACCOUNT FOR THE COSTS TO RESTORE A PROPERTY AFTER IT HAS BEEN MODIFIED. While persons with disabilities are permitted to make reasonable modifications to the premises at their own expense, some modifications might make a rental property undesirable to the general public; the landlord is allowed to require funds set aside to use to restore the property to its previous condition.

In order to file a complaint of discrimination, the person alleging a problem must a. be able to prove that discrimination occurred. b. suspect that discrimination occurred. c. be able to prove that the discrimination was intentional. d. be able to produce witnesses to the discrimination.

B. SUSPECT THAT DISCRIMINATION OCCURRED. Whenever policies or practices result in unequal treatment of people in the protected classes, they are considered discriminatory, regardless of any innocent intent. This effects test is applied by regulatory agencies to determine whether an individual has been discriminated against.

Which of the following is NOT permitted under the federal Fair Housing Act? a. The Harvard Club in New York will rent rooms only to graduates of Harvard who belong to the club. b. The owner of a 20-unit apartment building rents to women only. c. A Catholic convent refuses to furnish housing for a Jewish home. d. An owner refuses to rent the duplex home in which she lives to families with children.

B. THE OWNER OF A 20-UNIT APARTMENT BUILDING RENTS TO WOMEN ONLY. A 20-unit apartment building does not qualify under the exclusions of the federal Fair Housing Act. An owner occupant of this property may not discriminate against a prospective tenant who is a member of a protected class. Limiting rental based on sex would be illegal.

Under federal law, families with children may be refused rental or purchase in a building where occupancy is reserved exclusively for those who age is at LEAST a. 40. b. 60. c. 62. d. 65.

C. 62. Housing intended solely for persons age 62 or older is exempt from protections afforded to families with children; occupancy may be restricted to persons over the age of 62.

The resident manager of a large rental community tries to place families with children into an apartment building where other families with children reside? This is an example of a. a legal practice to ensure that children will not bother mature renters. b. a legal practice that helps children find playmates. c. an illegal practice called steering. d. an illegal practice called blockbusting.

C. AN ILLEGAL PRACTICE CALLED STEERING. Steering is the illegal practice of channeling of homeseekers to particular neighborhoods or by discouraging potential buyers from considering some areas. In the rental process, steering occurs when the landlord puts members of a protected class on a certain floor or in a certain building.

If a mortgage lender discriminates against a loan applicant on the basis of marital status, what law is violated? a. ADA b. Civil Rights Act of 1866 c. ECOA d. Fair Housing Act

C. ECOA. The Equal Credit Opportunity Act (ECOA) prohibits discrimination during the lending process based on race, color, religion, national origin, marital status, age, and receipt of public assistance.

What action is required by the Americans with Disabilities Act? a. Real estate must be free of barriers to people with disabilities b. All employers should adopt nondiscriminatory employment practices c. Reasonable accommodations must be provided to people with disabilities d. Any existing premise must be remodeled, if requested by a person with a disability, regardless of the cost involved

C. REASONABLE ACCOMMODATIONS MUST BE PROVIDED TO PEOPLE WITH DISABILITIES. The Americans with Disabilities Act (ADA) requires reasonable accommodations in employment and access to goods, services, and public buildings. The key word is reasonable.

Which act is permitted under the federal Fair Housing Act? a. Advertising property for sale only to a specific nationality group b. Altering the terms of a loan because the borrower is a member of a minority group c. Refusing to finance a home for an individual who has a poor credit history d. Telling an individual that an apartment has been rented when in fact it has not

C. REFUSING TO FINANCE A HOME FOR AN INDIVIDUAL WHO HAS A POOR CREDIT HISTORY. A person may legally be denied a loan because of poor credit history; there is no violation of either the federal Fair Housing Act or the Equal Credit Opportunity Act.

The act of channeling homeseekers to a particular area either to maintain or to change the character of a neighborhood is a. blockbusting. b. redlining. c. steering. d. permitted under the Fair Housing Act of 1968.

C. STEERING. Steering is the act of guiding prospective homeseekers into or away from particular neighborhoods. This conduct limits options, which is contrary to the concept of an open housing market.

Guiding prospective buyers to a particular area because the agent feels they belong there is a. blockbusting. b. redlining. c. steering. d. bird-dogging.

C. STEERING. Homeseekers, not their agents, decide the areas they want to explore houses for sale. An agent who restricts the homeseeker's options is engaging in the illegal activity of steering.

A broker employs several salespeople, one of whom is a member of a protected class. The broker tells this salesperson to work only with buyers of the same protected class and to solicit listings in only predominately minority neighborhoods. Which of the following is TRUE? a. The broker is entitled to direct the activities of this salesperson. b. The fair housing laws do not apply to the broker's practices. c. The broker is violating the salesperson's rights. d. The salesperson should be satisfied with the broker's policy.

C. THE BROKER IS VIOLATING THE SALESPERSON'S RIGHTS. Brokers and licensees must examine their activities and policies carefully to determine whether they have unintentional discriminatory effects. Whenever policies or practices result in unequal treatment of people in the protected classes, they are considered discriminatory, regardless of any innocent intent.

The restrictive covenants in a condominium complex prohibit pets. A prospective buyer with a physical disability relies on an animal to assist him. Which of the following is TRUE? a. The condominium has the right to establish this private restriction if it chooses. b. This restriction is unenforceable only if the animal is used to assist people with visual impairments. c. This restriction is unenforceable when any person with a disability uses an animal for assistance. d. The condominium can waive the enforcement of the covenant only by accommodating the animal.

C. THIS RESTRICTION IS UNENFORCEABLE WHEN ANY PERSON WITH A DISABILITY USES AN ANIMAL FOR ASSISTANCE. Landlords must make reasonable accommodations to existing policies, practices, or services to permit persons with disabilities to have equal enjoyment of the premises. It would be reasonable for a landlord or the homeowners' association to permit support animals (such as guide dogs) in a normally no-pet building or to provide a designated accessible parking space in a generally unreserved lot.

A single man with two small children has been told by a real estate licensee that homes for sale in a condominium complex are available only to married couples with no children. Which statement is TRUE? a. Because a single-parent family can be disruptive if the parent provides little supervision of the children, the condominium is permitted to discriminate against the family under the principle of rational basis. b. Condominium complexes are exempt from the fair housing laws and can therefore restrict children. c. The man may file a complaint alleging discrimination on the basis of familial status. d. Restrictive covenants in a condominium take precedence over the fair housing laws.

C. The man may file a complaint alleging discrimination on the basis of familial status. Condominium communities are not exempt from fair housing laws. Single- and multifamily housing must be made available to families with children under the same terms and conditions applied to anyone else.

A prospective homebuyer who is black inquires about the availability of a home in a predominately white residential neighborhood. What should the broker say to this prospect? a. "You wouldn't want to live in this area because the neighbors are trying to protect the integrity of the area." b. "I'd be happy to show you homes in other areas where black people are welcome." c. "The residents here have expressed a desire to keep the area homogeneous with no minorities." d. "I'd be pleased to show you any houses that you're interested in."

D. "I'D BE PLEASED TO SHOW YOU ANY HOUSES THAT YOU'RE INTERESTED IN." The real estate industry is largely responsible for creating and maintaining an open housing market. With the privilege of profiting from real estate transactions comes social and legal responsibility to ensure protection of everyone's civil rights, and that includes showing properties based on client desire and financial ability.

The fine for a first violation of the federal Fair Housing Act could be as much as a. $500. b. $1,000. c. $10,000. d. $16,000.

D. $16,000. An administrative law judge (ALJ) may impose monetary penalties for violations of the federal Fair Housing Act. The penalty for a first offense can be a fine of up to $16,000.

A woman owns a two-unit apartment building and lives in the downstairs apartment. She wants to rent the second floor. She refused the first applicant, an African-American male, stating that she did not want to rent to men. A few days later, this man noticed that a white male was moving into the building. The African-American male may allege that the woman was discriminating against him under the a. Housing and Community Development Act. b. Fair Housing Amendments Act. c. Title VIII of the Civil Rights Act of 1968. d. Civil Rights Act of 1866.

D. CIVIL RIGHTS ACT OF 1866. The federal Fair Housing Act covers most housing, but both federal law and Pennsylvania state law exempt owner-occupied two-unit buildings. But the Civil Rights Act of 1866 prohibits all racial discrimination without exception in the sale or rental of publicly or privately held property, whether facilitated by a real estate agent or sold or rented by the owner. Where race is involved, no exceptions apply.

The Civil Rights Act of 1866 is unique because it a. has been broadened to protect age. b. adds welfare recipients as a protected class. c. contains "choose your neighbor" provisions. d. provides no exceptions to racial discrimination.

D. PROVIDES NO EXCEPTIONS TO RACIAL DISCRIMINATION. While the federal Fair Housing Act of 1968 (as amended) provides for exceptions, the Civil Rights Act of 1866 is unique in that there are no exceptions for racial discrimination. Racial discrimination is always illegal.

The following ad appeared in the newspaper: "For Sale: 4 BR brick home; Redwood School District; excellent Elm Street location; short walk to St. John's Church; and right on the bus line. Move-in condition; priced to sell." Which statement is TRUE? a. The ad describes the property for sale and is very appropriate. b. The fair housing laws do not apply to newspaper advertising. c. The ad should state that the property is available to families with children. d. The ad should not mention St. John's Church.

D. THE AD SHOULD NOT MENTION ST. JOHN'S CHURCH. No religious preference is preferred; referencing a specific church can be viewed as available to only that particular religion, hence a subtle form of steering.

What is the underlying purpose of the civil rights laws that affect the real estate industry? a. To ensure that every neighborhood is integrated b. To provide more opportunity for home sellers and landlords c. To place restrictions on real estate licensees and the way that they choose to do their business d. To allow everyone the opportunity to live where they choose

D. TO ALLOW EVERYONE THE OPPORTUNITY TO LIVE WHERE THEY CHOOSE. The civil rights laws that affect the real estate industry ensure that everyone has the opportunity to live where they choose. Real estate licensees cannot allow their own prejudices to interfere with the ethical and legal conduct of their business.