Ethics, Fair Housing, Trust Funds & Other Legal Issues

Question 1

The best test of ethics is the

(a) Shining Standard.
(b) Platinum Character.
(c) Golden Rule.
(d) Moral Ethos Rule.

Answer 1

(c) Golden Rule.

Question 2

An action would most likely be considered ethical if you

(a) would not want others to know what you have done.
(b) acted to prevent others from being harmed.
(c) you acted because of animosity toward another agent
(d) had doubt before taking the action and had to ask someone if it was legal.

Answer 2

(b) acted to prevent others from being harmed.

Question 3

The National Association of Real Estate Brokers® designates its members as

(a) Founders.
(b) Realtors.
(c) Realtists.
(d) Nationalists.

Answer 3

(c) Realtists.

In 1947, a group of African-American brokers founded the National Association of Real Estate Brokers (NAREB) and adopted the word Realtist to designate their members.

Question 4

The fundamental basis for Fair Housing throughout the United States stems from the

(a) First Amendment of the Constitution.
(b) National Association of Fair Housing.
(c) 13th Amendment of the Constitution.
(d) Rumford Fair Housing Act.

Answer 4

(c) 13th Amendment of the Constitution.

The constitutionality of all Fair Housing laws is based on the 13th Amendment of the Constitution which abolished slavery.

Question 5

A broker is showing property to a person who is an ethnic minority. The broker decided to show property in a certain area because of his customer’s race. This is an example of

(a) redlining.
(b) block busting.
(c) plottage.
(d) steering.

Answer 5

(d) steering.

Question 6

The Americans with Disabilities Act (ADA) prohibits discrimination based on an individual’s

(a) race.
(b) religion.
(c) physical or mental disability.
(d) national origin.

Answer 6

(c) physical or mental disability.

Question 7

While the Unruh Act applies to discrimination by businesses, the Rumford Act applies to

(a) government discrimination.
(b) housing discrimination.
(c) restaurant discrimination.
(d) restaurant discrimination

Answer 7

(b) housing discrimination.

Question 8

The Holden Act prohibits discrimination by

(a) financial institutions.
(b) religious organization.
(c) government institutions.
(d) homeowner’s associations.

Answer 8

(a) financial institutions.

Question 9

The Real Estate Commissioner’s authority to regulate discriminatory activities of real estate licensees is contained in

(a) the NAR Code of Ethics.
(b) Article 10 of the Commissioner’s Regulations.
(c) Real Estate Law.
(d) the Holden Act.

Answer 9

(b) Article 10 of the Commissioner’s Regulations.

Question 10

The Sherman Antitrust Act prohibits brokers from

(a) charging a commission.
(b) hiring agents to work for them.
(c) advertising.
(d) agreeing with other brokers on minimum fees to charge.

Answer 10

(d) agreeing with other brokers on minimum fees to charge.

Question 11

The now prohibited practice of secretly compensating agents who steered business to specific service providers is called

(a) back-scratching.
(b) steering.
(c) kickbacks.
(d) perks.

Answer 11

(c) kickbacks.

The Real Estate Settlement Procedures Act (RESPA) makes illegal the unethical practice of paying agents under the table to steer business to a specific service provider (i.e., escrow, lender, pest control etc.).

Question 12

How much of a broker’s personal funds may be contributed to a client’s trust fund bank account to offset any bank service charges?

(a) $25.00, or the amount of charges by the bank
(b) $100.00
(c) $200.00
(d) nothing

Answer 12

(c) $200.00

Since banks sometimes have service charges, out of necessity, the broker is allowed to maintain up to $200 of personal funds in a trust account to cover these types of bank charges. Trust funds may not be used to pay for these types of expenses. The better practice is to have the bank charge the broker’s office or general account for the trust account fees and charges.

Question 13

What is the best test to evaluate if an act is ethical?

(a) The Golden Rule
(b) Is it legal?
(c) Are others doing it?
(d) Is it in my best interests?

Answer 13

(a) The Golden Rule

Question 14

Which of the following statements regarding ethics is TRUE?

(a) If it is legal, it is ethical.
(b) If it is unethical, it is illegal.
(c) Ethics tends to precede the law.
(d) Ethics and good business are not compatible.

Answer 14

(c) Ethics tends to precede the law.

Question 15

The Real Estate Commissioner’s suggestions for professional conduct include that the agent:

(a) stay in close communication with clients or customers.
(b) report violations of the real estate law to the Department of Real Estate.
(c) submit all written offers in a prompt and timely manner.
(d) all of these.

Answer 15

(d) all of these.

Question 16

The Civil Rights Act that applied only to race was the:
Quiz Question

(a) Civil Rights Act of 1968.
(b) Civil Rights Act of 1866.
(c) Unruh Act.
(d) Rumford Act.

Answer 16

(b) Civil Rights Act of 1866.

Question 17

The Civil Rights Act of 1968 prohibits:

(a) blockbusting.
(b) steering.
(c) both blockbusting and steering.
(d) neither blockbusting nor steering.

Answer 17

(c) both blockbusting and steering.

Question 18

Advertising a home in an area occupied solely by members of a minority group only in newspapers directed toward that minority group would be regarded as:

(a) redlining.
(b) steering.
(c) blockbusting.
(d) subordination.

Answer 18

(b) steering.

Question 19

Redlining refers to a refusal to:

(a) advertise in designated areas.
(b) loan in designated areas.
(c) list in designated areas.
(d) cooperate with other agents in designated areas.

Answer 19

(b) loan in designated areas.

Question 20

The California Act that prohibits discrimination by all California businesses is the:

(a) Unruh Act.
(b) Holden Act.
(c) Rumford Act.
(d) Brown Act.

Answer 20

(a) Unruh Act.

Question 21

Redlining is prohibited by the:

(a) Unruh Act.
(b) Holden Act.
(c) Rumford Act.
(d) Brown Act.

Answer 21

(b) Holden Act.