Chapter 15 - Anti discrimination Laws and Other Marketing Regulations

WA Real Estate License Law

- if violated, grounds for disciplinary action under the license law. -license could be revoked or suspended - pay a fine for each offense -take a class -gross misdemeanor - lead to criminal prosecution

Remedies

- issues an order to stop violating behavior -Or the injunction could order the violator to take affirmative action to make up for earlier discrimination. -violator can pay damanges

WA Fairness in Lending Act

- prohibits redlining -lending institution may not reject a single-family home loan application because the home is located in a particular area. Lenders are also prohibited from imposing stricter terms on a loan (for example, requiring a higher interest rate or a larger downpayment) because of the location of the home. -But lending decisions without a real financial basis are against the law.

Enforcement

-File complaint with Office of Fair Housing & Equal Opportunity -File suit in state or federal court

Civil Rights Act of 1866

-This law prohibits discrimination in real estate transactions on the basis of race or color. -post civilwar reforms -Unlike the Fair Housing Act, which applies only to residential property, the 1866 Civil Rights Act applies to any type of real estate—residential or commercial, improved or unimproved. The law states that "all citizens of the United States shall have the same right, in every state and territory as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold and convey real and personal property." -person can sue

Home mortgage disclosure act

-While the Equal Credit Opportunity Act targets individual acts of discrimination, the Home Mortgage Disclosure Act is aimed at detecting redlining in particular neighborhoods. - -The reports indicate the number of loans, the loan types (such as FHA or VA), the dollar amounts, and the locations of the properties. -If a lender's made few or no home loans in a particular neighborhood, the government will investigate to determine whether redlining is the explanation.

Application of the act

-applies to places of public accommodation and commercial facilities -This means that the law applies to real estate offices, as well as banks, stores, hotels, office buildings, and so on. Residential properties, as well as religious organizations and private clubs, are not covered by the ADA.

Unsolicited Marketing

-cannot call people who listed themselves in the federal trade commission's do not call registry. -but only for 18 months following their most recent transaction. An agent may also call someone on the list who asked to be contacted by the agent or the firm within the last three months. Even when calling people who aren't on the Do Not Call list, an agent must always honor a request not to be called again. An agent also may not block Caller ID or call outside permissible calling hours.

Penalties

-criminal and civil penalties -individual can be fined up to one million dollars and/or sentenced to ten years' imprisonment. A corporation can be fined up to one hundred million dollars.

If the plaintiff wins the lawsuit, there are three types of remedies available.

-injuction -compensatory damanges -punitive damanges

Group Boycott

-is an agreement between two or more competing businesses to exclude another competitor from fair participation in the market. The purpose of a group boycott is to hurt or destroy a competitor, which violates antitrust laws. -

Tie-in arrangement

-is an agreement to sell one product only on the condition that the buyer also purchases another "tied" product. Like price fixing and group boycotts, tie-in arrangements violate antitrust laws.

WA State prohibit discrimination laws

-laws against discrimination - fairness in lending Act -Real Estate License Law

Enforcement

-person can file a claim - within one year of the unlawful discrimination - The Commission will initially use conciliation and persuasion to try to end the discrimination

To qualify as housing for older persons, a property must fit into one of the following three categories:

1.it was developed under a government program to assist the elderly; 2.it was intended for and is solely occupied by persons 62 years old or older; or 3.it adheres to policies that demonstrate an intent to house persons 55 or older, and at least 80% of the units are occupied by at least one person who is 55 years old or older.

Penalties

A court or an administrative law judge might issue an injunction ordering a person to stop activity that violates the Fair Housing Act. -The maximum civil penalty ranges from $16,000 for a first offense up to $70,000 for subsequent offenses. -In addition, the violator might be ordered by a federal court to pay compensatory damages and punitive damages to the victim, or a civil penalty to the federal government. -Unlike a federal court, an administrative law judge cannot order the violator to pay punitive damages to the victim. -In a case litigated by the Attorney General, the court can impose a fine of $75,000 for a first offense, up to $150,000 for subsequent offenses.

A list-back agreement

A list-back agreement's legal if both parties enter into it freely and willingly. But Brown's refusal to sell Tyson a lot unless he also enters into the list-back agreement is an illegal tie-in arrangement.

Equal housing opportunity

A real estate brokerage's office must also display a copy of the Department of Housing and Urban Development's fair housing poster, with the Equal Housing Opportunity logo. This rule applies in any place of business where the business involves the selling or renting of residential property.

Exemptions

Although the Fair Housing Act covers the majority of residential transactions in the United States, there are certain limited exemptions. Four types of transactions are completely exempted from the act: -For home for sale or rent by owner

The federal law that describes a public accommodation as any private entity with facilities open to the public, as long as the operation of the facility affects commerce.`

Americans with Disabilities Act

example of a tie-in arrangement.

Brown is a subdivision developer. Tyson, a builder, wants to buy a lot in Brown's subdivision. -Brown tells Tyson that he'll sell him a lot only if Tyson agrees that after Tyson builds a house on the lot, he will list the improved property with Brown. A list-back agreement's legal if both parties enter into it freely and willingly. By imposing this requirement on Tyson, Brown is violating the antitrust laws.

Price fixing

Cooperative setting of prices or price ranges by two or more competing firms. n the real estate context, the "prices" in question are brokerage commission rates. To avoid the appearance of price fixing, licensees from different brokerages should never discuss commission rates. Printed materials that appear to fix prices by publishing "recommended" commission rates are also prohibited. -a designated broker may discuss commission rates with her own licensees. Two competing brokerages may also discuss the amount of a specific commission split between the listing brokerage and selling brokerage in a cooperative sale.

Home for sale or rent by owner

Does not apply to single home or rented by a private individaul" 1.First, the owner is allowed to own no more than three single-family homes. 2.Second, no discriminatory advertising may be used. 3.And third, a real estate broker, or anyone else in the business of selling or renting homes, can't be employed in the transaction. (Also, if the owner isn't the most recent occupant of the home, she can only use this exemption once every 24 months.)

ADA Requirements

Each of these objectives must be accomplished, if it is "readily achievable.": 1.Architectural and communications barriers must be removed. 2.Auxiliary aids and services must be provided, so that no disabled person is excluded, denied services, segregated, or otherwise treated differently than other individuals. 3.All new commercial construction must be accessible to the disabled, unless that would be structurally impractical.

Exemptions

Educational institutions may discriminate based on sex, marital status, or familial status in student housing. Private clubs and certain cemeteries and mausoleums operated by religious institutions may discriminate based on religion. -older person housing

This law prohibits lenders from discriminating based on race, color, religion, national origin, sex, marital status, age, or because the applicant's income is from public assistance.

Equal Credit Opportunity Act

Purchasing a home in the area and then selling it on contract to a minority buyer, in order to frighten local residents into selling, is an example of steering.

FAlse

A HUD administrative law judge may award compensatory and punitive damages to a victim of discriminatory conduct.

False

A real estate agent tells a client, "You probably wouldn't be interested in looking at that house; it's in a changing neighborhood." This is an example of blockbusting.

False

If an apartment has an established "no pets" policy for tenants, the manager is not required to make an exception for a hearing impaired person who has a service dog living with him.

False

Protection against discrimination on the basis of familial status is extended to those who have a child under 18 living with them, but not to pregnant women.

False- it does include preggo women

Familial status

Familial status refers to parents or guardians who have children under 18 years old living with them. It is generally illegal to refuse to rent or sell to someone because he has children, or is about to adopt or obtain custody of children. It's also illegal to refuse to rent or sell to a woman because she is pregnant.

Antitrust Laws

Federal and state antitrust laws regulate a real estate agent's relationships with clients and with other agents, by limiting anticompetitive behavior. -Antitrust laws are based on the idea that business competition is good for the economy and for society as a whole. -

Antitrust violation

For example, let's say that Broker Joan of ABC Realty and Broker Jim of XYZ Realty agree to divide up their market. They agree that ABC will handle all luxury home sales, and that XYZ will handle all vacant land and new construction. Their agreement is an illegal market allocation in violation of antitrust laws.

Pattern or practice of discrimination

If a case involves a "pattern or practice" of discrimination, the U.S. Attorney General can file suit in federal court.

Administrative hearing

If the respondent refuses to sign a conciliation agreement, an administrative hearing will be held—unless either the complainant or the respondent chooses to have the case decided in federal court instead. In an administrative hearing, HUD attorneys litigate on behalf of the complainant, and the case is decided by an administrative law judge.

Disability

In the context of the Fair Housing Act, disability refers both to physical disabilities (such as blindness and paralysis) and to mental disabilities (such as developmental disabilities and mental illness) that substantially limit one or more major life activities. - protects even-to someone who suffers from chronic alcoholism, but not to someone who is a direct threat to the health or safety of others or who currently uses illegal drugs

The Sherman Act, was passed in 1890.

It prohibits any agreement that has the effect of unreasonably restraining trade, including conspiracies. -a conspiracy occurs when two or more business entities participate in a common scheme that results in an unreasonable restraint of trade.

Civil Rights Act of 1964

It prohibits discrimination based on race, color, religion, or national origin in many programs and activities that receive financial assistance from the federal government. Some of these programs and activities pertain to housing. -Unfortunately, this law had a very limited impact on housing discrimination, because it generally didn't apply to the federal programs that are most important to the housing market: the FHA loan program and the VA-guaranteed loan program. It was not until four years later, when the Civil Rights Act of 1968 was passed, that the federal government really addressed housing discrimination

WA Law Against discrimination

It prohibits discrimination in employment, in insurance and credit transactions, and in public accommodations, as well as in all real estate transactions, whether residential or commercial.

Market Allocation

It's illegal for competing businesses to agree not to sell: -in specified areas, -to certain customers in specified areas, or -certain products or services in certain areas. Market allocation is prohibited because it tends to limit competition, benefiting the businesses at the expense of consumers.

Disability and familial status

Originally, the Fair Housing Act did not prohibit discrimination based on disability (referred to as "handicap" in the language of the law) or familial status. These categories were added to the act in 1988, and it's very important for real estate agents to understand the implications of these additions.

1866 Act:

Prohibits discrimination based on: Race Color

Fair housing act:

Prohibits discrimination based on: Race Color Religion Sex National origin Disability Familial status >And in addition to prohibiting discrimination in residential sales or leases, the Fair Housing Act also prohibits discrimination in advertising, lending, brokerage, and other services connected with residential transactions. -And in addition to prohibiting discrimination in residential sales or leases, the Fair Housing Act also prohibits discrimination in advertising, lending, brokerage, and other services connected with residential transactions.

Other prohibited Acts

Real estate agents also need to be familiar with these three terms connected with housing discrimination: steering, blockbusting, and redlining. -prohibited by federal law

Avoiding Antitrust Violations

Real estate agents should not: -imply that a commission rate is fixed or non-negotiable; -discuss their firm's commission policies or business plans with competitors; or -tell clients or competitors that they won't do business with a certain firm or licensee.

Real estate agents never exempt

Remember, the Fair Housing Act applies to any transaction involving a real estate agent. It's never legal for a real estate agent to discriminate, and an agent who thinks a client is going to discriminate should withdraw from the transaction.

The federal antitrust law that can lead to both criminal and civil penalties is called the _______________.

Sherman Act.

Modifying property

The Fair Housing Act doesn't require a landlord to modify property to accommodate disabled tenants. However, a landlord must allow a disabled tenant to make reasonable modifications at the tenant's own expense if they are necessary to her full use and enjoyment of the premises. At the end of the tenancy, the landlord can require the tenant to restore the property to its original condition.

Housing for older persons

The Fair Housing Act has an exemption from the general prohibition against discrimination based on familial status. Sellers and landlords are allowed to exclude families with children from "housing for older persons."

Discriminatory acts

The Fair Housing Act includes a list of actions that are unlawful if based on race, color, religion, sex, national origin, disability, or familial status.

Reasonable accommodations -dogs and disability

The Fair Housing Act requires landlords to make reasonable exceptions to rules and policies to accommodate disabled tenants. For example, a "no pets" rule can't be applied to a blind or deaf person who has a guide dog, and the landlord can't require a higher damage deposit because of the dog. At the end of the tenancy, however, the tenant can be charged for any damage caused by the dog.

A law that requires certain institutional lenders to make annual reports on residential mortgage loans that were originated or purchased during the fiscal year.

The Home Mortgage Disclosure Act requires annual reports from large lenders. The reports disclose areas where few or no home loans have been made and alert investigators to potential redlining.`

To further the purposes of this law, the Human Rights Commission was created and given the mission of eliminating and preventing discrimination in this state.

The Human Rights Commission helps enforce the Washington Law Against Discrimination

The Office of Fair Housing and Equal Opportunity

The Office of Fair Housing and Equal Opportunity is part of the Department of Housing and Urban Development (called HUD). -A complaint must be filed with HUD within one year after the discrimination occurred. -A lawsuit must be filed within two years.

Injunction

The court can issue an injunction ordering the defendant to stop the violation.

Compensatory Damages

The court can order the defendant to pay compensatory damages to the plaintiff. Compensatory damages cover the losses or expenses incurred, and may also include compensation for the emotional distress and humiliation suffered as a result of the discrimination.

Punitive Damanges

The defendant may be ordered to pay punitive damages instead of, or in addition to, compensatory damages. Punitive damages are intended to punish the defendant and discourage others from discriminating. In some discrimination cases the punitive damages are substantial, amounting to hundreds of thousands of dollars.

Americans with Disabilities Act

The federal Fair Housing Act prohibits discrimination against disabled persons in residential transactions, but there are additional protections for disabled persons. The Americans with Disabilities Act (ADA), which went into effect in 1992, requires any business or other facility that is open to the public to be accessible to the disabled.

Private clubs

The last Fair Housing Act exemption covers private clubs. -not open to the public -not operated for commercial pupose

Types of violations

There are four main categories of activities prohibited by antitrust laws: price fixing, group boycotts, tie-in arrangements, and market allocation.

Wheelchair accessibility rules

These rules apply to buildings with four or more units that were first occupied after October 1988. -They require entryways, hallways, kitchens, and bathrooms designed to accommodate wheelchairs, as well as other special features. -In apartment buildings with more than one floor, the units on the second floor or higher are required to be wheelchair-accessible only if there's an elevator that would enable a tenant in a wheelchair to reach those floors.

Federal Fair Housing Act

Title 8 of the Civil Rights Act of 1968 is known as the federal Fair Housing Act. -For home buyers and sellers, this is the most important federal antidiscrimination law. -The Fair Housing Act applies to the sale or lease of residential property, including vacant land that will be used for the construction of residential buildings. -In this sense, it's more limited than the Civil Rights Act of 1866, which applies to any real estate transaction.

The refusal, for discriminatory reasons, to make loans on properties located in a particular neighborhood is called redlining.

True

The Fair Housing Act does not apply to the rental of a dwelling with up to four units, provided that the owner occupies one of the units, uses no discriminatory advertising, and does not employ a broker.

True -It's called the Mrs. Murphy exemption.

The federal Fair Housing Act is enforced by the Department of Housing and Urban Development.

True-HUD does this through its Office of Fair Housing and Equal Opportunity.

The federal Fair Housing Act does not prohibit discrimination in commercial or industrial transactions.

True-The Act concerns itself with discrimination in residential transactions.

A Washington law that is specifically directed at preventing redlining.

WA Fairness in Lending Act`

According to this law, if a real estate agent violates any fair housing or antidiscrimination laws or regulations, she may be subject to disciplinary action.

WA Real Estate License Law

Conciliation agreement

When HUD receives a complaint, the agency investigates the problem. If the complaint appears well founded, HUD tries to negotiate a conciliation agreement with the person responsible for the problem (the respondent).

Equal Credit Opportunity Act

applies to all types of credit transactions, including mortgage lending. -The ECOA prohibits lenders from discriminating against applicants on the basis of race, color, religion, national origin, sex, marital status, or age. It also prohibits discrimination against loan applicants because all or part of their income is from a public assistance program.

Disability

as any physical or mental impairment that substantially limits one or more major life activities

Steering

channeling prospective buyers or tenants to or away from particular neighborhoods based on their race (or religion, national origin, or other protected characteristic).

Owner-occupied rentals

doesn't apply to the rental of a room or unit in a dwelling with up to four units, provided that three requirements are met. 1) The owner must reside in one of the units. 2) No discriminatory advertising can be used. And 3) A real estate broker can't be employed in the transaction.

Religious organizations

eligious organizations dealing with their own property, in noncommercial transactions, to limit occupancy to, or give preference to, their own members.this exemption doesn't apply if the organization's membership is restricted on the basis of race, color, or national origin.: 1. church's own proverty 2. noncommerical transactoins 3. membership not restricted on basis of race, color, or national orgini

If a real estate agent tells clients that he and his fellow agents won't do business with a certain competing firm, that may be construed as engaging in a/an _______________, which is a violation of antitrust law.

group boycott

Antitrust laws also have to do with real estate

in 1950, the Supreme Court decided that mandatory fee schedules established and enforced by a real estate board violated the Sherman Act.

Public Accommodations (ADA)

includes any nonresidential place that is owned, operated, or leased by a private entity and is open to the public, if operation of the facilities affects commerce.

CAN-SPAM Act

is a federal law that regulates unsolicited emails, including those that an agent might send as advertisements. -Under the act, any unsolicited email message must contain instructions on how the recipient can opt out of receiving further emails from the sender.

Redlining

occurs when a lender refuses to make mortgage loans in a particular neighborhood because of its racial or ethnic composition.

Blockbusting

or panic selling) occurs when a licensee induces homeowners to sell by predicting that members of another race or ethnic group will be moving into the neighborhood and that this will result in lower property values, a higher crime rate, or other undesirable consequences.

A brokerage consults with several competing firms in order to develop a brokerage fee schedule. This would be illegal _______________.

price fixing

A listing form that contains pre-printed commission rates can be interpreted to be _______________, which is an antitrust violation.

price fixing

The state law prohibits housing discrimination based on

sex; sexual orientation; marital or familial status; race; creed; color; national origin; sensory, mental, or physical disability; the use of a trained guide dog or service dog; or honorably discharged veteran or military status. (more than federal fair housing act)

Group boycott example

suppose a real estate broker had a serious conflict with a broker from a different firm over the handling of a transaction. Afterward, she might try to discourage brokers that she knows at other competing firms from cooperating with that broker in the future. This could constitute an illegal group boycott. -If a broker feels that another broker is dishonest or unethical, she may choose not to do business with him. However, she can't encourage competing brokers to follow her lead and shut the other broker out.

It's an illegal _______________ when someone will agree to sell one product only if the buyer agrees to purchase another product too.

tie-in arrangement.

One exemption from the prohibition against discrimination on the basis of familial status is a property intended for and solely occupied by persons 62 years old or older.

true-Another exemption is properties developed under a government program to assist the elderly.