Section 9: Other Real Estate Matters in Texas

According to fair housing laws, the protected class of familial status refers, in part, to those with children, who are defined as anyone under the age of ______.

18

Which of the following is protected under the federal Fair Housing Act?

Race

Your brokerage firm will likely have their own buyer's representation form, because this isn't a required form that's promulgated by TREC. What elements are required within buyer representation agreements?

-The names of the parties to the agreement -Appointment giving a broker exclusive right to represent a buyer client -The term of the agreement -Broker's fees -Buyer obligations to the broker

Can a broker representing a buyer and a broker representing a seller agree on a fair commission between themselves?

Yes

Which licensee is exempt from liability under the 2011 amendment to the DTPA?

Samuel, who accidently advised his client to do something that was incorrect.

In Texas, when HUD receives a discrimination complaint, it forwards this complaint to what organization?

Texas Workforce Commission Civil Rights Division

Elisha is a property manager at Oakwood Luxury Apartments in San Antonio. A family of seven recently inquired about renting a three-bedroom unit. What law can guide Elisha in her decision?

The Texas Landlord and Tenant Act

Before Texas established its own occupancy standards law, the federal policy would have likely been considered. How does the Texas law differ from the federal law?

The Texas law allows for more adults per bedroom than the federal occupancy standard.

Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under the _______.

Fair Housing Amendments Act of 1988

Which of the following states that the person who committed the fraud, as well as anyone who knew about the fraud, failed to disclose it, and benefited from it, can be held liable for actual damages?

Fraud in Real Estate and Stock Transaction

You represent a buyer, Lillian, who is moving from another state. She plans on making an all-cash offer on the first house she falls in love with in San Antonio. You bring Lillian to a fabulous home in a desirable neighborhood, because the listing agent, Charlie, is a close friend of yours. The house Charlie has listed is slightly under Lillian's max budget. When Charlie asks about how much your client is willing to pay, the law requires that you:

Inform Charlie that you can't disclose any confidential information that will compromise your client's position.

Which of the following is true regarding the 2011 amendment to the DTPA?

It helps prevent frivolous lawsuits against real estate licensees.

James is a real estate licensee in Texas. A complaint has been filed through the TWCCRD against James for a fair housing violation. Which of the following is true?

James could be sanctioned by both the TWCCRD and the Real Estate Commission.

Jamie, a seller, deliberately hid the evidence of a termite infestation from potential buyers. Annette, his listing broker, agreed to not disclose the presence of termites in the home, even though she had seen them for herself. Jamie also paid Fred, a friend and home inspector to leave it out of his report. According to the Fraud in Real Estate and Stock Transactions Act, who is liable?

Jamie, Annette, and Fred

Meredith is a mother of five children, two of whom are age 18 or older. What is the minimum number of bedrooms she's allowed to rent, according to the occupancy standards under the Texas Landlord and Tenant Act?

One

There are factors that might be considered in occupancy standards for states that don't have a law in place. Although Texas has its own occupancy law, which must be followed, it's also important to understand the other recommended standards. Which of the following is a factor when considering the number of occupants allowed per dwelling unit, according to HUD?

The sizes of the bedrooms The size of the unit The layout of the unit

Janice and Tim have decided to sell their home, located right outside of Dallas. It's been one year since their son committed suicide, and while they're apprehensive, they're ready to move to another home that doesn't represent so much pain. As they complete the seller disclosure form, you inform them that ______.

They do not need to disclose their son's suicide, unless they want to, because it's not required under Texas law.

Sameen and Mohammed apply to rent an apartment in a six-plex in the middle of Houston. Bob, the landlord, thinks they're probably Muslim, and doesn't want to upset the other tenants, so he lies and tells the applicants that he's just filled the vacancy. Has Bob just violated the fair housing laws?

Yes, and Bob could be penalized by the Texas Workforce Commission Civil Rights Division.

Disclosures: Permitted

-Suicide -Registered sex offender in the neighborhood

Which of the following is an example of discrimination?

Restricting families with children to a certain area of a building or complex

The Texas Workforce Commission consists of how many members?

3

What law in Texas establishes the occupancy standards?

The Texas Landlord and Tenant Act

The Texas listing agreement is an agreement between which parties?

The seller and a broker

The Texas Workforce Commission consists of three members who serve ______-year terms.

6

A common form of mortgage fraud—illegal property flipping—involves a recently purchased property being ______.

Falsely appraised at an inflated value and then sold for that higher price

Federal laws define a person with a disability as ________.

"Any person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such impairment; or is regarded as having such an impairment."

Which act requires multifamily housing, commercial, and public buildings to be accessible to individuals with disabilities.

Americans with Disabilities Act

Illegal flipping

An investor purchases a property for a steal and partners with an appraiser to falsify the value at a much higher price, and both profit.

Penalties for Violating Fair Housing Laws

-A licensee found guilty of fair housing violations can potentially be penalized by both the Texas Work Force Commission Civil Rights Division (TWCCRD) and the Texas Real Estate Commission for the same violation. -A licensee can have a lawsuit brought against them by the attorneys general at the state and federal levels. -Civil litigation is not limited to the state and federal attorneys general. Lawsuits can also be brought at the state and federal levels by alleged victims. -A licensee's real estate license could be denied renewal, suspended, or even revoked for fair housing violations. -The TWCCRD can impose fines for first offenses. For a second violation within five years of the first, the TWCCRD can impose a fine of up to $25,000. Furthermore, if a licensee violates the laws a third time, even stricter fines of up to $50,000 can be imposed.

To avoid committing DTPA-related offenses, you need to know which actions constitute a violation. Keeping the 2011 amendment to the DTPA in mind, which of the following real estate licensee actions could lead to a lawsuit under the DTPA?

-A listing agent tells a buyer agent that there are no radon issues with the house, even though the seller told the agent there could be a radon issue, and that the neighbors on either side have had radon detectors installed. -A licensee doesn't mention to a potential buyer that the house they are interested in is going into foreclosure shortly. -A buyer agent tells an elderly client that there is no need to have a termite inspection done, because the seller already had the termite inspection and alleviated the problem. The agent knows the seller has not repaired the termite damage, but does not disclose this.

Illegal buyer rebate

-After a property closes, the buyer receives money back from the seller without the lender's knowledge.

Mortgage fraud

-An investor secures an owner-occupied loan at a much lower rate than the general public is allowed, yet never plans to live in the property. -Although the buyers only make $65,000 annually, they list their annual income as $100,000 on the loan application.

Fraud

-Charley's seller tells him they've had water damage in the basement and asks him to conceal it from potential buyers. He obeys. -Jamie hears there will soon be a highway expansion that will put the freeway practically in the backyard of a listing. It won't happen for a year or more, so he does not disclose this information to potential buyers. -Dwight tells potential buyers that the countertops in his new listing are granite, when the seller has disclosed to him that they are "faux granite."

Disclosures: Required

-Electrical issues -Roof issues or replacement -Plumbing or drainage issues -Paranormal activity

Which three of the following outcomes can be identified as fraudulent?

-Information about the property value is being kept from the lender. -The property is falsely appraised at a higher value and then quickly sold. -Money is going back to the buyer without the lender's knowledge.

Misrepresentation

-Kelly's seller client told her that their home was 2,500 square feet, when it was really 2,200 square feet. Kelly did not verify the square footage of home. It was listed and sold as a 2,500-square-foot home. -Carmen accidentally forgets to tell a potential buyer that the stream on the property frequently floods the basement. After purchasing the home, the buyer suffers a loss of $10,000 as a result of a flooded basement.

Texas Fair Housing Exemptions

-Sandy and Jake own a duplex and rent the other half of the property to a retired couple. They own no other real estate property. -Martha sells her single-family home without the use of a real estate professional.

Red Flags for Fraud

-Significant sales price adjustments that are not supported by comparable market data -Blanks or inconsistent information in the sales contract or any other required documents -Buyer has a very limited credit history -Omission of information being provided to the lender

Without peeking at a resource, can you recall which of these forms can contain information about broker's fees?

-TREC - promulgated One to Four Family Resdential Sales Contract -The listing agreement -Previously established between brokers through the MLS -The buyer's representation agreement

Spot the Fair Housing Violation of a Protected Class

-Telling a family that a property has already sold because licensee felt they wouldn't fit in with the neighborhood's ethnic make-up -Increasing the rent and security deposit for a family with seven children -Charging higher monthly rent to a divorced single woman who is also pregnant -Advertising housing specifically to couples with no children -Changing the terms of a sales contract because a family holds different religious beliefs than you

What's the purpose of the clauses pertaining to broker's fees in the Texas Association of REALTORS® Buyer Representation Agreement?

-The buyer agrees that the broker will be paid a certain amount for their service. -The broker will make an effort to collect his fees from the seller and his agent before collecting from the buyer. -The clause identifies when the fee is earned and when it is payable to the broker.

The Terms of the Listing and Buyer Agent Commissions

-The listing commission is the total commission received by the listing brokerage and the brokerage that represents the buyer. -The split won't always be a 50/50 split like it is in the example provided. -If the listing brokerage agrees to pay the buyer brokerage, then the buyer will only be required to pay the difference in commission fees.

Let's consider for a moment a situation in which a consumer doesn't want to bring a lawsuit for damages under DTPA. What's required before a consumer can waive their rights?

-The waiver must be in writing. -The waiver must be conspicuous and in 10-point or greater, boldface type. -The waiver must be signed by the consumer. -The consumer must be represented by an attorney who was not referred by the licensee. -The waiver must be titled "Waiver of Consumer Rights."

Jill and Jackie want to rent an apartment with their three children. Under the occupancy standards established in the Texas Landlord and Tenant Act, which of the following is the smallest unit they can rent?

1 bedroom

Kyle and his brother, Bob, have been raising their four young nephews since the children's mother was killed in a car accident. What is the fewest number of bedrooms Kyle and Bob may have in an apartment they rent in Texas?

1 bedroom

According to the Texas Landlord and Tenant Act, under the Texas Property Code, what is the maximum number of adults who are allowed to occupy a one-bedroom dwelling unit?

3

Jessica lives in Austin and attends the University of Texas. She's made a lot of friends her first year of college, and is ecstatic to be moving out of the dorms. Nine girls are looking to live in one apartment together to save their parents money. They refuse to live in a house, as they love the amenities of an apartment and "will make it work." What's the minimum number of bedrooms the apartment needs to have in order for these nine women to live together under the occupancy laws in Texas?

3

Which of the following types of death, if it occurred on the property, is a required disclosure in Texas?

A death due to a carbon monoxide leak on the property

Which of the following constitutes fraud in real estate according to the Texas Fraud in Real Estate and Stock Transactions statute?

A listing agent purposely fails to disclose foundation issues mentioned by the seller.

Which of these statements about fair housing for people with disabilities is true?

A person with a disability should not be prevented from making reasonable accommodations and may also request accessibility accommodations.

Accessibility Requirements

Accessible entrance Accessible public and common use areas Usable doors Accessible route into and through the dwelling unit Accessible light switches, electrical outlets, thermostats and environmental controls Reinforced walls in the bathrooms

Unlike Texas, there are states that follow what organization's policy allowing two people per bedroom as a "reasonable standard."

HUD

The Facts About Disability Rights

Housing providers are required to allow a person with disabilities to make reasonable modifications to a structure if it allows for the person to enjoy the housing and its related facilities.

Jonathan, the listing broker, offers a buyer's agent commission to any agent who brings a buyer to his listing. When Jackie decides to buy that house, Jackie's broker will receive part of his commission from Jonathan. Because of this, Jackie will end up paying her broker ______ than she'd originally planned, because the buyer's agent commission fee Jackie originally agreed to pay her broker in their buyer representation agreement will have been partially paid by the listing broker.

Less

Which of these is a recommended strategy for a real estate professional who wants to avoid being asked to violate fair housing laws?

Let consumers know up front that you adhere to fair housing laws

The Texas Landlord and Tenant Act sets the ______ number of adults allowed to occupy a dwelling at ______ the number of bedrooms.

Max: 3x

As we've discussed, fraud is prevalent in various forms in real estate. What's one common type of fraud committed by a buyer?

Mortgage fraud

Gavin, an investor, secures an owner-occupied loan at a much lower rate than the general public is allowed, yet never plans to live in the property. Gavin is committing ______.

Mortgage fraud

Jerimiah and his wife Camille are expecting their third child. They're shopping around the Austin area for a two-bedroom, two-bathroom apartment. Are there any occupancy regulations in Texas that would prohibit this from happening?

No, Jerimiah and Camille are within the occupancy standards established under Texas law.

Your seller client, Tammy's, late husband, George, died on the front lawn of their two-story home after falling off the roof while drunkenly attempting to imitate a stunt he'd seen on YouTube. Is she required to disclose this to potential buyers, now that she's selling her house?

No, because the death wasn't caused by the property condition.

You discover that there's a registered sex offender in the neighborhood and decide to disclose this information to your client. Are you breaking the law?

No, revealing this information isn't prohibited, but neither is it required. You should follow your brokerage's policy on the matter.

Your Texas buyer client, Piper, said that she's interested in looking at a house on the next block, but that she's heard rumors that the seller has AIDS. By law, you can:

Not inquire about the seller's AIDS/HIV status

Familial status includes families with children under age 18 living with parents or a legal custodian, people securing the custody of children, and what other group of people?

Pregnant women

Prohibited Actions

Refuse to rent or sell housing Refuse to negotiate for housing Make housing unavailable Deny a dwelling Set different terms, conditions, or privileges for sale or rental of a dwelling Provide different housing services or facilities Falsely deny that housing is available for inspection, sale, or rental For profit, persuade owners to sell or rent, known as blockbusting Deny anyone access to or membership in a facility or service related to the sale or rental of housing.

According to the Source of Commission section in the TAR Residential Buyer/Tenant Representation Agreement, from whom will the broker first seek to obtain payment of the commission?

Seller, landlord, or their agents

Which of the following is a protected class under federal fair housing laws?

Sex

If two brokers come to a previously arranged agreement on commission fees, this will already be in writing in separate written agreements. The commission fees are also noted for informational purposes only in which of the following agreements?

TREC One to Four Family Residential Contract (Resale)

You represent a Texas seller, Sully, and when he fills out the seller's property disclosure, you notice he says the roof is "new." You can tell the roof is at least 15 years old, if not older, and will need to be replaced soon. What's your responsibility here?

Tell Sully he must complete the disclosure as truthfully as possible, and that if he lies about the roof, you will tell potential buyers the truth (and then do it, if necessary).

Who regulates the fair housing law in Texas?

Texas Workforce Commission Civil Rights Division

Real estate licensees in Texas need to pay attention to updates from what agency, which is responsible for enforcing Texas Fair Housing Law?

The Texas Workforce Commission Civil Rights Division

Texas Fraud in Real Estate and Stock Transaction Statute

The law states that fraud in a real estate transaction consists of either a false representation of past or existing material facts—if that false representation was made to induce a person into a contract who relied on that false information to enter into the contract—or a false promise to take an action if that promise is material and made with the intention of not fulfilling it, or made to induce someone to enter into a contract, and that person relied on the validity of the promise to enter into the contract.

Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud?

The original sales agreement and any addenda

Physical stigmas must be disclosed in Texas. Which of the following is an example of a physical stigma?

The property was used to manufacture methamphetamine.

The word knowingly is specifically used under the law. Do you know the amount of damages a plaintiff can recover should a licensee knowingly commit a deceptive act or practice?

Triple the amount

Although the Texas Landlord and Tenant Act, under Texas Property Code Section 92.010, sets the maximum number of adults permitted to live in a dwelling unit at three people per bedroom, local regulations may differ.

True