Chapter 8
Violations of ADA
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.
If someone asks for the "black" or "Jewish" areas, what do you do?
explain to the buyer that you, ethically and legally, cannot recommend housing based upon the race, religion, color, national origin, sex, handicap, or familial status makeup of the neighborhood.
Unless a building or community qualifies as housing for older persons, it may not discriminate based on
familial status.
Instead of filing a complaint with HUD, a person may file a suit where and within what time frame?
in a state or federal court within 2 years of alleged violation.
ECOA expects a lender to base lending decisions on an individual's
income, net worth, job stability and credit rating.
Persons who feel they have been discriminated against under federal fair housing laws may file a complaint with
the Office of Fair Housing and Equal Opportunity (OFHEO) within HUD, or they may file suit in a federal or state court.
In addition to, or instead of filing a complaint with HUD, a party may file suit in state or federal court within
two years of alleged violation.
Race, Color or National Origin discriminatory advertising.
using words that describe the housing, the current or potential residents or the neighbors or neighborhood in racial or ethnic terms. bad exp. phrases such as white family home or no Irish good exp. phrases such as master bedroom, rare find, or desirable neighborhood
What is testing?
A simulated housing transaction designed to obtain evidence of differential treatment based on an individual's protected class status.
Plessy v. Ferguson (1896)
Separate but equal as long was separate housing for blacks and whites were equal, they were legal.
Texas complaints can be filed w/ the
Texas Workforce Commission Civil Rights Division, one year from the date.
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
Handicap discriminatory advertising
A licensee should never write a real estate advertisement which contains explicit exclusions, limitations or other indications of discrimination based on handicap. bad exp. no wheelchairs, able-bodied persons only, no deaf, or no handicapped parking good exp. great view, fourth-floor walk-up, walk-in closets, jogging trails, and walk to bus-stop, non-smoking, or sober. also you can use descriptions such as wheelchair ramp.
Discrimination 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.
Redlining
A process by which banks draw lines on a map and refuse to lend money to purchase or improve property within the boundaries.
If the court finds that discrimination has occurred, the person filing the complaint may be entitled to
Actual damages Punitive damages Attorney's fees and costs
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
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
Newspaper ads
Be sure to use a wide variety of newspapers When using pictures, be sure the pictures show that housing is open to everyone Use the Equal Opportunity logo or slogan in all of your advertising
Fair Housing laws also prohibit these activities.
Blockbusting Steering Redlining
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.
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.
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 does ECOA prohibit?
Discrimination against applicants on the basis of race, color, religion, national origin, sex, marital status, age or dependency on public assistance
When discrimination occurs, it can bring with it a host of emotional side effects:
Divisiveness Anger Discomfort Social upheaval
A broker should take these steps to ensure compliance with fair housing laws.
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 make-up 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. Click here to see a copy of the poster: Equal Housing Opportunity Poster Maintain the concept of fair housing in all forms of advertising.
Describe the exemption that exists for familial status discrimination.
Housing for older persons is exempt if one of the following conditions exists. The HUD Secretary has determined that it is specifically designed for and occupied by elderly persons under a Federal, State or local government program. It is occupied solely by persons who are 62 or older. It houses at least one person who is 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates the intent to house persons who are 55 or older.
Religion discriminatory advertising
If a licensee creates an ad which is explicit in its preference for or limitation of any particular religion. 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. bad exp. no jews or christian home good exp. apartment complex w/ chapel or kosher meals available
What is significant about the Fair Housing Amendments Act of 1988?
It added handicap and familial status to the list of protected classes.
Responsibilities for the Office
Many errors and omissions liability policies do not cover fair housing issues, so brokers must be careful about avoiding these violations. Look out for their time, money, and reputation.
Financial institutions are required to submit their LARs electronically every year in __________ to the Federal Financial Institutions Examination Council (FFIEC).
March must retain HMDA LAR for at least 3 years
Two Texas statutes contribute to HUD laws relating to discrimination and fair housing. They are:
No form of discrimination can be upheld in a court of law Licensees cannot discriminate in their practice of real estate. [1101.652 (b) (32)]
Community Reinvestment Act of 1977
Passed by congress 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.
List 2 steps a broker should take to ensure compliance with fair housing laws.
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.
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
Protected classes in Texas are:
Race Religion Color National Origin Sex Handicap Familial Status
The list of protected classes of the Federal Fair Housing Act are:
Race Religion Color National Origin Sex Handicap Familial Status
What if a buyer asks you a question about the minorities living in a specific area?
Refer the buyer to experts in this field- someone who would actually be in possession of the demographics in a particular area.
Housing discriminatory activities in real estate include:
Refusing to sell, rent or negotiate with any person who is a member of a protected class Changing terms, conditions or services for different individuals as a means of discrimination Stating or advertising that the property is restricted Telling persons that a property is not for sale or rent when it is Denying membership in any multiple listing service (MLS) or any broker's organization Using discriminatory advertising
List three activities that are considered discriminatory in real estate.
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
Community Reinvestment Act
Requires banks to demonstrate their commitment to local communities through low-income lending programs and to provide annual reports to the public.
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.
Jones v. Mayer (1968)
Supreme Court Case which prohibits racial discrimination in any real estate transaction (residential or commercial)
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.
With what agency can discrimination complaints be filed in Texas?
Texas Workforce Commission Civil Rights Division
Home Mortgage Disclosure Act (HMDA) of 1975
The Federal Reserve Board designed this act 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.
Housing for older persons is exempt from the prohibition against familial status discrimination if one of the following conditions exists.
The HUD Secretary has determined that it is specifically designed for and occupied by elderly persons under a Federal, State or local government program. It is occupied solely by persons who are 62 or older. It houses at least one person who is 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates the intent to house persons who are 55 or older.
What could happen if one of your sellers declines to show a property to minorities or members of other protected classes?
This is illegal. Both you and your seller could be sued for violating fair housing laws.
If the Administrative Law Judge (ALJ) decides that discrimination occurred, the respondent can be ordered:
To compensate for actual damages, including humiliation, pain and suffering. To provide injunctive or other equitable relief, for example, to make the housing available to the complainant. To pay the Federal Government a civil penalty to vindicate the public interest. The maximum penalties are $10,000 for a first violation and $50,000 for a third violation within seven years. To pay reasonable attorney's fees and costs.
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
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.
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
Federal Financial Institutions Examination Council (FFIEC)
an interagency body that administers HMDA
How should you answer questions about local schools or the ethnicity in a certain area?
You should not answer questions like these, but should refer buyers to experts who can answer these questions in a factual way. This will help minimize your housing liability.
What was the significance of the Plessy v. Ferguson Supreme Court decision of 1896?
separate but equal
Concilation
when HUD attempts to resolve the complaint by getting assurance from the person against who the complaint was filed that he or she will remedy the alleged violation.
Any person who believes he or she has been discriminated against may file a complaint with who and within what time?
with HUD and within one year of the alleged act.
The HMDA applies to two categories of financial institutions:
"depository institution" (bank, savings association, or a credit union that meets certain criteria) for-profit, nondepository "mortgage lending institution" that meets a certain criteria.
Buchanan v. Warley (1917)
-SCOTUS ruled that government imposed residential segregation a constitutional violation of Equal Protection Clause
Why is it important for the agent to know the law?
1. It's the law. Real estate licensees must obey all federal, state, local rules and regulations. 2. It's right. Everyone should have an equal opportunity in our country to own or rent the property of his or her choice. 3. 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.
When HUD receives a complaint, it will start an investigation. Within ______ days, HUD will determine if there is reasonable cause to charge discrimination or it will dismiss the complaint.
100 days
After the financial institution submits their annual LAR to FFIEC, they must make it available to the public at its home office within _________ business days.
3 after deleting these fields: application or loan number, date application received, and date of action taken.
Familial status discriminatory advertising
Advertisements may not contain limitations on the number or ages of children, or state a preference for adults, couples or singles. bad exp. couples only, empty nesters, single person, no families, mature individuals or senior discount. good exp. two bedroom, cozy, family room, no bicycles allowed, or quiet streets
Steering
Channeling homebuyers toward or away from homes in certain neighborhoods in order to preserve or alter the makeup of that neighborhood.
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.
A nondepository mortgage lending institution is covered if it meets all of the following criteria:
It originated home purchase loans (including refinancing home purchase loans) in the previous year that met either of these criteria: Equaled ten percent or more of its loan origination volume, measured in dollars Equaled $25 million or more On the preceding December 31, it had a home or branch office in an MSA. Either of the following circumstances was true: On the preceding December 31, the institution had total assets of more than $10 million, counting the assets of any parent corporation. In the preceding calendar year, the institution originated at least 100 home purchase loans or refinances of home purchase loans.
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
Blockbusting (panic peddling)
Making a profit by inducing owners to sell by telling them that persons of a protected class are moving into the neighborhood
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).
These federal laws played an important role in helping shape American civil rights policy after the passage of the original Civil Rights Act of 1866
Plessy v. Ferguson (1896) Buchanan v. Warley (1917) Brown v. Board of Education (1954)
In buildings that are ready for first occupancy after March 13, 1991, and have an elevator and four or more units:
Public and common areas must be accessible to persons w/ 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
Those protected by the 1988 disability or handicap amendments, 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.
Discrimination in Mortgage Lending
Refusing to give a loan Refusing to provide loan information Giving different terms for loans, such as interest rates or fees Discriminating when doing a property appraisal Refusing to purchase a loan Setting different conditions for a loan purchase
Brokers should also do the following.
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.
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.
Investigative tool to uncover housing discrimination know as, "testing" is defined as:
a simulated housing transaction designed to obtain evidence of differential treatment based on an individual's protected class status.
Sex discriminatory advertising
ad must not have an overt preference for or limitation of any person that is based on gender. bad exp. males only, men only, women only, females only good exp. mother-in-law suite and bachelor apartment
Fair Housing Amendments Act of 1988 (Reagan)
added handicap and familial status.
Housing and Community Development Act of 1974 (Nixon)
added sex to the list of protected classes
What constitutes discriminatory advertising?
advertising that describes buyers could be considered discriminatory, especially if the buyers are from a protected class.
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.
Depository Institutions are covered by HDMA is they meet the following criteria:
it has at least $37 million in assets It has a home or branch office in one or more Metropolitan Statistical Areas (MSAs). It has made at least one home mortgage loan in the preceding year. The company itself is federally-insured or regulated, has originated a mortgage loan that was insured, guaranteed, or supplemented by a federal agency, or at least one of the loans it made was intended to be sold to Fannie Mae or Freddie Mac.
What constitutes acceptable advertising?
its safe to say that any advertising that describes the property would be considered acceptable.
Americans with Disabilities Act of 1992
mandates that persons with disabilities have equal access to jobs, public accommodations, govt. 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.
Those protected by the 1988 disability or handicap amendments:
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.
Familial status protection also applies to
pregnant women and anyone securing legal custody of a child under 18.
Civil Rights Act of 1964
prohibit discrimination on the basis of race, color, or national origin in programs and activities receiving federal financial assistance.
Fair Housing Act of 1968 POTUS Lyndon B. Johnson
prohibited discrimination in housing based on race, color, religion or national origin.
Civil Rights Act of 1866 (First Fair Housing Law) POTUS Andrew Johnson
prohibited discrimination in housing based on race.
Brown v. Board of Education (1954)
prohibited racial segregation of public schools. Plessy v. Ferguson had no place in the field of public education