Chapter 17 Ethical Practices and Fair Housing

  1. Professional Ethics
    • A system of moral principles, rules and standards of conduct that guide a person's actions.
    • They establish standards for integrity and competence in dealing with consumers of an industry's services.
    • They define a code of conduct for relations within the industry among it's professionals
  2. Code of Ethics
    • A written system if standards for a code of professional conduct
    • Contains statements that are designed to advise, guide and regulate behavior
  3. National Association of Realtors NAR
    • The largest trade association in the country
    • Adopted a cod of Ethics in 1913
    • Not all licensees are REALTORS
    • STANDARDS OF PRACTICE-practical applications of the articles of the code
  4. EQUAL Opportunity Housing
    • Everyone has the right to choose where they want to live
    • Licensees must avoid using prejudice
    • There are state laws and federal laws.  State laws are more strict
    • Laws are evolving based on case law
    • The outcome of cases can influence the law
  5. Federal Law-Civil Rights Act of 1866
    • Prohibits any type of discrimination based on race 
    • Plessy vs Ferguson established the separate but equal doctrine of legalized seperation
  6. Federal Law--Fair Housing Act Title VIII of the Civil Rights Act of 1968
    • Prohibits discrimination based on the following:
    • Race
    • Color 
    • Religion
    • Sex 
    • Disability
    • Familial Status
    • National Origin

    It is administered by US Department of Housing and Urban Development
  7. Federal Law--Fair Housing Amendments Act 1988
    Expanded federal civil rights protections to include families with children and people with physical or mental disabilities, in addition to race, color, reglion and national origin
  8. Federal Law--Housing for Older Persons Act HOPA 1955
    • Requires that at least 80% of the occupied units in senior housing (55 yrs or older) have at leaston person age 55 or older living in them is exempt form familial status provisions of the fair housing act.
    • 80% or more are age 55, then they can turn away younger people.
  9. Familial Status
    • One or more individuals younger than age 18 living with a parent or guardian
    • Includes a woman who is pregnant and anyone who is in the process of assuming custody of a child younger than age 18
    • Age of Majority-Age 18 or older
    • Age of Minority-Under age 18
  10. Definitions of Handicap and Disiabilty
    • Definitions of handicap under the Fair Housing Act and disability under the Americans with Disabilities Act are the same
    • Disability is the socially preferred of the two terms.
  11. Disability
    • Physical or mental impairment that restricts the activities of daily living
    • Fair Housing Act-Protects persons who have the HIV Virus (AIDS) with or without symptoms
    • Does not protect current users of illegal substances
    • Landlords must make reasonable accommodations for persons with disabilities to have equal enjoyment of the premises. 
    • Must permit service animals in a normally "no-pet" building
    • People with disabilities must be permitted, at their own expense, to the premises to make reasonable modifications
    • Failure to permit reasonable modification constitutes discrimination
    • Landlord is allowed to require that the property be restored to it's previous condition when the lease period ends, aside from wear and tear
    • A landlord and require a security deposit for these changes.
  12. Exemptions to the Fair Housing Act
    • Most are not applicable in PA
    • Owner occupied buildings of one to four family dwellings.  PA law only recognizes an exemption in the rental of owner occupied, two unit dwelling; an owner occupied rooming house with a common entrance and shared bathroom facility; or in the case of sex, the rental of housing accommodations in the single-sex dormitory
    • Single family housing sold or rented without the use of a licensee
    • Housing operated by organizations and private clubs that limit the occupancy to members--American Legions with rooms, religious organizations with a lodge, etc
    • Housing for older persons" if all of the units are occupied by person 62 and older and if 80 percent of the units are occupied by at least one person 55 and older
  13. Federal Law--Megan's Law
    • Promnotes the establishment of state registration systems to maintain residential information on every person who kidnaps children, commits sexual crimes against children or commits sexually violent crimes.
    • Upon release from prison, offenders must register.
  14. Federal Law--Equal Credit Opportunity Act (ECOA)
    • Prohibits discrimination in granting credit based on:
    • Race
    • Color
    • Religion
    • National Origin
    • Sex
    • Marital Status and 
    • Age
    • The agency that enforces the ECOA depends on the type of financial institution.  In general, it is enforced by the Federal Trade Commission or the Department of Justice
  15. Federal Law--American with Disabilities Act ADA
    • Requires reasonable accommodations in employment and access to goods, services and public buildings
    • Title I--requires that employers, including real estate licensees, make reasonable accommodations that enable an individual with a disability to perform essential job functions.  Typically applies to companies with 15 or more employees.  PA--PA Human Relations Act (PHRA) is broader by requiring employers in PA with four or more employees to adopt nondiscriminatory practices
    • Title III--requires individuals with disabilities to have full accessibility to business, good and public services.  Facilities must be barrier free.  PA--PA Human Relations Act, (PHRA) includes commercial property.
    • American Disabilities Act Accessibility Guidelines, (ADAAG)for buildings and facilities contain detailed specifications for designing parking spaces, curb ramps, drinking fountains, toilet facilities and directional signs
  16. ADA and the Fair Housing Act
    The ADA exempts the following two types of property from it's requirements:  Property that is covered by the Fair Housing Act and property that is exempt form coverage by the Fair Housing Act.
  17. Federal Fair Housing Laws
    • Civil Rights Act of 1866--Race and Color
    • Fair Housing Act of 1968 (Title VIII)--Race, Color, Religion, and National Origin, (Ethnicity)
    • Housing Community Development Act of 1968--Disability and Familial Status
    • Equal Credit Opportunity Act of 1974(lending)--Race, Color, Religion, National Origin, ex, Marital Status and Public Assistance Income
  18. PA Human Relations Act (PHRA)
    • Deemed substantially equivalent to the Fair Housing Act.  In some cases, it is more restrictive.
    • PHRA also includes religious creed and ancestry
    • As a protected class, age is a person 40 years or older
    • PA Laws include commercial property, state laws pertain to residential property.
  19. PA Real Estate Licensing and Registration Act
    • Violating the PHRA is also a violation of the real estate licensing law.  
    • The Real Estate Licensing and Registration Act specifically prohibits--accepting listings that are illegally discriminate against certain persons or groups in the sale of rental property, giving false information for the purpose of discrimination and, making distinctions, for discriminatory purposes, in the location of housing or dates of availability.

    The state real estate commission can take disciplinary action against a licensee, in addition to any action taken by the Human Resources Commission.
  20. Fair Housing Practices
    • Blockbusting(panic selling)--act of encouraging people to sell or rent their homes by claiming that the entry or prospective entry of an unprotected class of people in the neighborhood will have some sort of negative impact on property values.
    • Steering--the channeling of home seekers to particular neighborhoods or by discouraging potential buyers from considering some areas.. Could also be when a landlord tells a prospective tenant that no vacancy exists, when in fact, it does.
    • Advertising--advertisements of property for sale or rent may not include language indicating preference or limitation.  Gender specific advertising is permitted, "female roommate wanted".
    • Appraising--can only consider factors that affect value.
    • Redlining--mainly financing.  Practice of refusing to make mortgage loans or issue policies in specific areas for reasons other than the economic qualifications of the applicants.  Frequently based on racial grounds rather than on any real objection to an applicant's creditworthiness.
    • Intent and Effect--disparate impact.  Policies and practices that 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.
    • Response to Concerns of Terrorism--for screening and rental purposed, it is unlawful to screen housing applicants on the basis or race, color, religion, sex, national origin, disability or familial status.  Asking for citizenship status does not violate the Fair Credit Housing Act
  21. Enforcement of the Fair Housing Act
    • Administered by the Office of Fair Housing and Equal Opportunity(OFHEO), under the direction of the secretary of HUD.
    • Complainant:  Person who file a complaint, may file a complaint with HUD within 1 year of the alleged act.  HUD has 100 days to investigate
    • Respondent--the person who responds to the claim
    • Statute of limitations:  HUD--1 year, Federal Court--2 years
    • Conciliation--the resolution of a complaint by obtaining assurance that the person against whom the complaint was files(respondent) will remedy any violation that may have
    • occurred.
    • Administrative Law Judge(ALJ)--holds proceedings and hearings and has the authority to award damages.  Penalties range from up to $16k  for the first offense, to $37K for a second violation within 5 years and $65K for a third violation within seven years.
    • Parties may elect civil (judicial) action in federal court within 2 years of the discriminatory act. In federal court unlimited punitive damages may be awarded, in addition to actual damages. 
    • Real Estate errors and omissions insurance normally does not pay on violations of the fair housing laws.
    • Complaints brought under the Civil Rights Act of 1866 are taken directly to a federal court
    • State and Local Enforcement--many state and municipalities have their own their own fair housing laws
    • Threats or Acts of Violence--Federal Fair Housing Act protects the rights of those who seek the benefits of the open housing law. PA--Ethnic Intimidation and Vandalism Act prohibits the retaliation against those who file complaints alleging discrimination, fair housing activists and real estate licensees who are attempting to conduct business in compliance with the fair housing laws
  22. Implications for Brokers and Salespersons
    • Licensees are a community's real estate experts.  They must uphold the reputation a reputation in the community
    • Fair Housing is the Law
  23. PA Human Relations Commission and the PA Association of Realtor have jointly authored the FAIR HOUSING GUIDELINES.
    • Recommendations are as follows:
    • Standardized Inventory
    • Consistent Practices
    • Verifiable and Measurable criteria that is not subjective
    • Written Documentation
Card Set
Chapter 17 Ethical Practices and Fair Housing
Chapter 17 Ethical Practices and Fair Housing