Real Estate National Test Ch 18 Flashcards Preview

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Flashcards in Real Estate National Test Ch 18 Deck (49)
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1
Q

Explain the “Civil Rights Act of 1866”

A

The law prohibits discrimination based on race in every property transaction but was largely ignored.

Complaints brought under the Civil Rights Act of 1866 are taken directly to federal courts.

The only time limit for action is a state’s statute of limitations for torts (injuries one individual inflicts on another).

2
Q

Explain Plessy vs Ferguson

A

The U.S. Supreme Court’s 1896 decision in Plessy v. Ferguson, which involved segregated railway cars, upheld racial segregation in public facilities—the “separate but equal” doctrine.

3
Q

Explain Executive Order 8802

A

President Franklin Delano Roosevelt signed Executive Order 8802 on June 25, 1941, prohibiting racial discrimination in the national defense industry.

4
Q

Explain Executive Order 9981

A

President Harry S. Truman signed Executive Order 9981 on June 26, 1948, ending racial discrimination in the U.S. armed forces.

5
Q

Explain Brown Vs Board of Education

A

In 1954, Plessy was overturned by the U.S. Supreme Court’s decision in Brown v. Board of Education, which held that separate schools for black and white students were inherently unconstitutional.

6
Q

Explain the “Civil Rights Act of 1957”

A

On September 9, 1957, President Dwight D. Eisenhower signed into law the Civil Rights Act of 1957, which authorized the Attorney General to seek federal injunctions to protect the voting rights of African Americans.

7
Q

Explain Jones Vs. Mayer

A

1968, the Supreme Court, in Jones v. Mayer, held that there was a constitutional basis for the Civil Rights Act of 1866 in the 13th Amendment to the U.S. Constitution, which prohibits slavery. It is now recognized that the 1866 law prohibits all racial discrimination in the sale or rental of publicly or privately held property, without exception, whether facilitated by a real estate professional or sold or rented by the owner. Where race is involved, no exceptions apply.

8
Q

Explain “Title VIII of the Civil Rights Act of 1968”

A

Signed into law by President Lyndon B. Johnson on April 11 of that year, was amended by the Housing and Community Development Act of 1974 and the Fair Housing Amendments Act of 1988, and is known as the Fair Housing Act. It prohibits discrimination in housing based on

  1. race,
  2. color,
  3. national origin,
  4. religion,
  5. sex,
  6. Familial status
  7. disability.
9
Q

Explain the Fair Housing Act.

A

AKA: Fair Housing Amendments Act of 1988

It prohibits discrimination in housing based on

  1. race,
  2. color,
  3. national origin,
  4. religion,
  5. sex,
  6. Familial status
  7. disability.

The Fair Housing Act also prohibits discrimination against individuals because of their association with persons in the protected classes.

The Fair Housing Act originally prohibited discrimination based on race, color, religion, or national origin.

The Fair Housing Act does not require that housing be made available to an individual whose tenancy would constitute a direct threat to the health or safety of other individuals or would result in substantial physical damage to the property of others.

10
Q

What did “The Housing and Community Development Act” add to the Fair Housing Act?

A

Sex as a protected class.

11
Q

Explain the Fair Housing Amendment Act

A

Added Disability and familial status although an exception was made for certain housing intended for persons age 55 or older.

The amended act also changed the penalties for violations of the law, making them more severe, and added the right to seek damages, such as those for noneconomic injuries (humiliation, embarrassment, inconvenience, and mental anguish).

To the Fair Housing Act.

12
Q

Explain “Housing for Older Persons Act”

A

AKA: HOPA

Which repealed the requirement that housing intended for those age 55 or older have “significant facilities and services” designed for seniors.

HOPA still requires that at least 80% of occupied units have one person age 55 or older living in them.

The act prohibits the awarding of monetary damages against those who, in good faith, reasonably believed that property designated as housing for older persons was exempt from familial status provisions of the Fair Housing Act.

13
Q

Explain “Department of Housing and Urban Development”

A

AKA: HUD

Administrates “The Fair Housing Act”.

HUD has established rules and regulations that further interpret the practices affected by the law.

In addition, HUD distributes an equal housing opportunity poster, available at www.hud.gov.

The poster declares that the office in which it is displayed promises to adhere to the Fair Housing Act and pledges support for affirmative marketing and advertising programs.

14
Q

HUD D: Dwelling

A

As any building or part of a building designed for occupancy as a residence by one or more families. This includes a single-family house, a condominium, a cooperative, and manufactured or other factory-built housing, as well as vacant land on which any of these structures will be built.

15
Q

HUD D: Family / Familial Status

A

Is defined as one or more individuals under age 18 living with a parent or guardian.

It also includes a woman who is pregnant and anyone who is in the process of assuming custody of a child under age 18.

Housing that qualifies for older people is exempt. Otherwise, single or multifamily housing must be made available to families with children under the same terms and conditions applied to anyone else.

It is illegal to advertise properties as being for adults only or to indicate a preference for a certain number of children.

Landlords and condominiums/cooperatives cannot restrict the number of occupants with the intent of eliminating families with children.

Any occupancy standards must be based on objective factors, such as sanitation or safety.

16
Q

HUD D: Disability

A

Is included in the Fair Housing Act as a handicap, although the word disability is now the preferred term.

A disability is a physical or mental impairment that substantially limits one or more of a person’s major life activities and includes having a record of having such an impairment, or being regarded as having such an impairment, even if one does not exist.

It is unlawful to discriminate against prospective buyers or tenants on the basis of disability.

Persons who have AIDS are protected by fair housing laws under this classification.

The classification does not include current, illegal use of, or addiction to, a controlled substance, as defined in the Controlled Substances Act.

Landlords must make reasonable accommodations to existing policies, practices, or services to permit persons with disabilities to have equal enjoyment of the premises.

It would be reasonable to expect a landlord to permit a support animal (such as a guide dog) in a normally no-pets building or to provide a designated parking space in a generally unreserved lot for a person with a disability.

People with disabilities must be permitted to make necessary, reasonable modifications to the premises at their own expense.

Such modifications might include lowering door handles or installing bath rails to accommodate a person in a wheelchair.

Failure to permit reasonable modification constitutes illegal discrimination.

The law recognizes that some reasonable modifications might make a rental property undesirable to the general population.

In such a case, the landlord is allowed to require that the property be restored to its previous condition when the lease period ends, aside from reasonable wear and tear.

Where it is necessary to ensure with reasonable certainty that funds will be available to pay for the restorations at the end of the tenancy, the landlord may negotiate, as part of a restoration agreement, a provision requiring that the tenant pay into an interest-bearing escrow account, over a reasonable period, a reasonable amount of money not to exceed the cost of the restorations.

The interest in the account accrues to the benefit of the tenant.

A landlord may not increase the required security deposit for a person with a disability, however.

The law does not prohibit restricting occupancy exclusively to persons with a disability in dwellings that are designed specifically for their accommodation.

In newly constructed multifamily buildings with an elevator and four or more units, the public and common areas must be accessible to persons with a disability, and doors and hallways must be wide enough for wheelchairs.

The entrance to each unit must be accessible, as well as the light switches, electrical outlets, thermostats, and other environmental controls.

A person using a wheelchair should be able to use the kitchen and bathroom; bathroom walls should be reinforced to accommodate later installation of grab bars.

Ground-floor units must meet these requirements in buildings that do not have an elevator.

Real estate professionals should be aware that state and local laws may have stricter standards.

17
Q

The federal Fair Housing Act covers most housing but does exempt?

A
  1. Owner-Occupied buildings with no more than four units.
  2. Single-family housing sold or rented without the use a real estate professional
  3. Housing operated by organizations and private clubs that limit occupancy to members.
18
Q

The sale or rental of a single-family home is exempt from the Fair Housing Act when the transaction meets all conations.

A
  1. Home is owned by an individual who does not own more than three such homes at one time & who does not sell more than one every two years.
  2. A real estate professional is not involved in the transaction.
  3. Discriminatory advertising is not used.
19
Q

HUD D: Housing for older persons

A

While the Fair Housing Act protects families with children, the Housing for Older Persons Act (HOPA) provides that certain properties can be restricted to occupancy by older persons.

Housing intended for persons age 62 or older or housing occupied by at least one person 55 years of age or older per unit (where 80% of the units are occupied by individuals 55 or older) is exempt from the familial status protection.

Such “senior housing” typically will allow temporary occupancy by younger visitors, such as permitting overnight visits for up to two weeks per year.

20
Q

Explain Americans with Disability Act

A

AKA: ADA

Is not a housing law, it still has a significant effect on the real estate industry.

ADA requires reasonable accommodations in employment and access to goods, services, and public buildings.

The law is important because real estate professionals are often employers, and their offices are public spaces.

ADA’s goal is to enable individuals with disabilities to become part of the economic and social mainstream of society.

21
Q

Explain Title 1 of ADA

A

Title I of ADA requires that employers, including real estate professionals, make reasonable accommodations that enable an individual with a disability to perform essential job functions.

Reasonable accommodations include making the work site accessible, restructuring a job, providing part-time or flexible work schedules, and modifying equipment that is used on the job.

The provisions of the ADA apply to any employer with 15 or more employees.

22
Q

Explain Title 3 of ADA

A

Requires that individuals with disabilities have full accessibility to businesses, goods, and public services.

As a result, building owners and managers of commercial spaces must be constantly alert to ensure that obstacles are removed.

The Americans with Disabilities Act Accessibility Guidelines (ADAAG) contain detailed specifications for designing parking spaces, curb ramps, elevators, drinking fountains, toilet facilities, and directional signs to ensure maximum accessibility.

Unless a real estate professional is a qualified ADA expert, it is best to advise commercial clients to seek the services of an attorney, an architect, or a consultant who specializes in ADA issues.

23
Q

What does ADA exempts form its requirements?

A
  1. property that is covered by the Fair Housing Act, which already prohibits discrimination on the basis of disability.
  2. property that is exempt from coverage by the Fair Housing Act, such as housing for those age 55 or older.
24
Q

What is an example of property being subject to both Fair Housing Act and the ADA?

A

Example, in an apartment complex, the rental office is a place of public accommodation.

As such, it is covered by ADA and must be accessible to persons with a disability at the owner’s expense. Individual rental units would be covered by the Fair Housing Act.

A tenant who wished to modify the unit to make it accessible would be responsible for the cost.

25
Q

Explain Wells Vs State Manufactured Homes.

A

A 2005 case before the U.S. District Court, District of Maine, the landlord ordered the owner of a manufactured housing unit to move from the community because he claimed she violated the no-pets provision of her rental agreement.

The landlord refused to make a reasonable accommodation for the owner’s emotional disability by permitting her to keep a dog.

She filed suit under the ADA and Fair Housing Act. The court held that there was no violation of the Fair Housing Act or the ADA.

The court said she failed to establish that her mental impairment substantially limited a major life activity and so did not meet the definition of a disability under ADA.

26
Q

True or False

As amended, the federal Fair Housing Act provides federal civil rights protections to families with children and people with physical or mental disabilities.

A

True

27
Q

D: Blockbusting

A

Is the act of encouraging people to sell or rent their homes by claiming that the entry of a protected class of people into the neighborhood will have some sort of negative impact on property values.

Blockbusting was a common practice during the 1950s and 1960s when unscrupulous real estate professionals profited by fueling “white flight” from cities to suburbs.

Any message from a real estate professional, however subtle, that property should be sold or rented because the neighborhood is “undergoing changes” is considered blockbusting.

It is illegal to assert that the presence of certain persons will cause property values to decline, crime or antisocial behavior to increase, or the quality of schools to suffer.

A critical element in blockbusting, according to HUD, is the profit motive.

A property owner may be intimidated into selling a property at a depressed price to the blockbuster, who in turn sells the property to another person at a higher price.

Another term for this activity is panic selling.

To avoid accusations of blockbusting, real estate professionals should use good judgment when choosing locations and methods for marketing their services and soliciting listings.

28
Q

D: Steering

A

Is the channeling of homeseekers to particular neighborhoods or discouraging potential buyers from considering some areas.

In the rental process, steering occurs when the landlord puts members of a protected class on a certain floor or building.

Another form of steering occurs when the landlord tells a prospective tenant that no vacancy exists when, in fact, there is a vacancy.

When the misstatement is made on the basis of a protected class, the prospect is steered away from that building.

In any case, it is an illegal limitation of a purchaser’s or renter’s options.

29
Q

D: Redlining

A

The practice of refusing to make mortgage loans or issue insurance policies in specific areas for reasons other than the economic qualifications of the applicants.

This practice is often a major contributor to the deterioration of older neighborhoods.

Redlining is frequently based on racial grounds rather than on any real objection to an applicant’s creditworthiness.

The federal Fair Housing Act prohibits discrimination in mortgage lending and covers not only the actions of primary lenders but also activities in the secondary mortgage market.

A lending institution, however, can refuse a loan solely on sound economic grounds.

30
Q

Is asking for citizenship documents discriminatory?

A

No.

The Fair Housing Act does not specifically prohibit discrimination based solely on a person’s citizenship status.

Therefore, asking applicants for citizenship documentation or immigration status papers during the screening process does not violate the Fair Housing Act.

For many years, the federal government has been asking for these documents in screening applicants for federally assisted housing.

31
Q

D: Disparate treatment

A

AKA: Intent

Is the intentional action of discrimination.

32
Q

D: Disparate Impact

A

AKA: Effect

Is the result of one’s actions, though the intent of those actions may or may not be discriminatory.

33
Q

How is the Fair Housing Act administered?

A

Office of Fair Housing and Equal Opportunity under the direction of the secretary of HUD.

34
Q

How do complaints of violations of Fair Housing Act work?

A

Any aggrieved person who believes illegal discrimination has occurred may file a complaint with HUD within one year of the alleged act. HUD also may initiate its own complaint.

Upon receiving a complaint, HUD initiates an investigation.

Within 100 days of the filing of the complaint, HUD either determines that reasonable cause exists to bring a charge of illegal discrimination or dismisses the complaint.

During this investigation period, HUD can attempt to resolve the dispute informally through conciliation.

35
Q

How can complaints be reported for violating the Fair Housing Act?

A

Can be reported to

  1. Office of Fair Housing and Equal Opportunity
  2. Department of Housing and Urban Development, Washington, DC 20410
  3. Office of Fair Housing and Equal Opportunity in care of the HUD regional office.
  4. Directly to HUD using an online form on the HUD website.
36
Q

D: Conciliation

A

Is the resolution of a complaint by obtaining assurance that the person against whom the complaint was filed (the respondent) will remedy any violation that may have occurred.

The respondent further agrees to take steps to eliminate or prevent discriminatory practices in the future.

If necessary, these agreements can be enforced through civil action.

37
Q

D: Administrative Law Judge

A

AKA: ALJ

An ALJ has the authority to award actual damages to an aggrieved party and, if it is believed the public interest will be served, to impose a monetary penalty.

38
Q

D: Administrative Proceeding

A

The aggrieved person has the right to seek relief through administrative proceedings.

An administrative proceeding is a hearing held before an administrative law judge (ALJ).

In addition to civil penalty amounts, actual damages and attorney’s fees and costs may be awarded to the victim of housing discrimination.

The ALJ also has the authority to issue an injunction to order the offender to either do something (such as rent an apartment to the complaining party), or refrain from doing something (such as acting in a discriminatory manner).

39
Q

what are the monetary penalty for violation of the Fair Housing Act, as determined by HUD?

A

HUD increased the maximum civil penalty for violation of the Fair Housing Act, effective August 16, 2016. Adjusting the previous penalty amounts for inflation, the fine is now $19,987 for the first violation that occurs on or after that date, $49,467 if there was a violation in the preceding five years, and $98,935 for the third or more violation within seven years.

40
Q

The parties to a Fair Housing Act complaint may elect civil action in federal at any time within in?

A

two years

41
Q

Explain Federal Court hearing for Fair Housing Act violations?

A

For cases heard in federal court, unlimited punitive damages can be awarded in addition to actual damages.

The court can also issue injunctions.

The attorney general, upon finding reasonable cause to believe that any person or group is engaged in a pattern or practice of resistance to the full enjoyment of any of the rights granted by the federal fair housing laws, may file a civil action in any federal district court. Civil penalties may result in an amount not to exceed $50,000 for a first violation and an amount not to exceed $100,000 for second and subsequent violations, in addition to the victim’s actual damages, attorney’s fees, and costs, as well as compensation for humiliations, mental distress, and loss of housing rights.

42
Q

True or False & Why

The purpose of the civil rights laws that affect the real estate industry is to make everyone equal.

A

False

The purpose of the civil rights laws that affect real estate is to create a marketplace in which all persons of similar financial means have a similar range of housing choices.

43
Q

True or False & Why

Failure to prominently display the Equal Housing Opportunity poster can be considered evidence of discriminatory practices.

A

True

Failure to display the Equal Housing Opportunity poster can be considered prima facie evidence of discriminatory practices.

44
Q

True or False & Why

A real estate professional is obligated to provide ethnic-diversity information to homebuyers.

A

False

Pursuant to the 2001 case Hannah v. Sibcy Cline Realtors, a real estate professional is not obligated to provide ethnic-diversity information about a neighborhood to a homebuyer.

45
Q

True or False & Why

A church violates the Fair Housing Act if it owns and operates rental housing only for its member employees and others who belong to the religion.

A

False

A religious organization may restrict occupancy of dwelling units that it owns to members of the organization.

However, membership in the religion must not be restricted on the basis of race, color, or national origin.

46
Q

Which of these laws extended housing discrimination protections to families with children and persons with disabilities?

A) Housing and Community Development Act of 1974

B) Civil Rights Act of 1968

C) Fair Housing Amendments Act of 1988

D) Civil Rights Act of 1866

A

C. Fair Housing Amendments Act of 1988

The Fair Housing Amendments Act of 1988 added disability and familial status.

The Housing and Community Development Act of 1974 added sex to the list of protected classes, which is found in Title VIII of the Civil Rights Act of 1968.

The Civil Rights Act of 1866 prohibits discrimination based on race.

47
Q

An occupancy requirement is exempt from familial status protection under the Fair Housing Act if the housing is intended to be occupied by

A) at least one person in each unit who is 50 years of age or older.

B) persons 55 years of age or older.

C) at least one person age 60 or older in 80% of the units.

D) persons 62 years of age or older.

A

D. Persons 62 years of age or older

Housing is exempt from the familial status protections if it is intended for occupancy only by persons 62 years of age, or for occupancy in 80% of its units by at least one person 55 years of age or older.

Strict rules for ongoing verification and reporting are imposed on this second alternative.

48
Q

Which statement describes the Supreme Court’s decision in the case of Jones v. Alfred H. Mayer Company?

A) Persons with disabilities are a protected class.

B) Racial discrimination is prohibited by any party in the sale or rental of real estate.

C) Laws against discrimination apply only to federally related transactions.

D) Sales by individual residential homeowners are exempted, provided the owners do not use real estate professionals.

A

B. Racial discrimination is prohibited by any party in the sale or rental of real estate.

The Jones v. Mayer decision held that the Civil Rights Act of 1866, banning all limitation on property rights on the basis of race, is the law of the land.

Racial discrimination by anyone in the sale or rental of any kind of property violates this law.

49
Q

The Fair Housing Act prohibits discrimination created by redlining

A) on grounds of race or national origin, but not for any other reason.

B) if actual economic harm can be demonstrated.

C) unless an area is redlined because it has historically been considered undesirable.

D) an area that will not be the subject of marketing and/or lending efforts.

A

D. An area that will not be the subject of marketing and/or lending efforts.

A lending institution can refuse to make a loan for sound economic reasons, but it may not refuse to make a loan based solely on the location of the property.

In the same way, real estate professionals may not effectively set some areas apart as unsuitable for marketing property because of the protected classification of the residents of the area.