Kap Real Estate Chapter 19: Fair Housing and Ethical Practices Flashcards
Civil Rights Act of 1866
It was mainly intended, in the wake of the American Civil War, to protect the civil rights of persons of African descent born in or brought to the United States. This law prohibited any type of discrimination based on “race, color, or previous condition of servitude.” Unlike many laws, there are no exceptions to the Civil Rights Act of 1866.
U.S. Supreme Court’s 1896 decision in Plessy v. Ferguson
established the separate but equal doctrine of legalized racial segregation. A series of court decisions and federal laws in the 20 years between 1948 and 1968 attempted to address the inequities in housing that were results of Plessy. Those efforts, however, tended to address only certain aspects of the housing market (such as federally funded housing programs). As a result, their impact was limited.
1) Federal Fair Housing Act of 1968 prohibited discrimination in housing based on?
2) Housing and Community Development Act of 1974 added what to that protected class?
3) Fair Housing Amendments Act of 1988 added what else?
4) This law is administered by:
1) prohibited discrimination in housing based on race, color, religion, or national origin.
2) added sex to the list of protected classes
3) included handicapping condition and familial status
4) Department of Housing and Urban Development (HUD).
Housing and Community Development Act of 1974
added sex to the list of protected classes
The Federal Fair Housing Act, as amended, prohibits discrimination on the basis of the following protected classes (what are those classes?):
Race: a group of people that an individual was born into or has affiliated with all of their lives
Color: the actual color of the skin’s pigmentation including the degree of darkness
Religion: the spiritual beliefs of an individual
National origin: the country in which an individual was born or from which they derive their direct ancestry (not related to citizenship)
Sex: male or female gender (does not protect sexual orientation or gender identity)
Handicapping condition: defined by HUD as any physical or mental impairment that substantially limits one or more major life activities, or being regarded as having such an impairment, which includes persons with AIDS and HIV
Familial status: any type of family unit with at least one dependent child (under the age of 18), including pregnant women
Exemptions to the Federal Fair Housing Act
1) When are the exemptions thrown out of the Federal Fair Housing Act?
The Federal Fair Housing Act provides for certain exemptions. It is important for brokers to know in what situations the exemptions apply. However, brokers should be aware that no exceptions apply when a real estate broker is involved in a transaction.
Exemptions to the Federal Fair Housing Act
The sale or rental of a single-family home is exempt when:
- the home is owned by an individual who does not own more than three such homes at one time (and who does not sell more than one every two years);
- a real estate broker is not involved in the transaction; and
- discriminatory advertising is not used.
The rental of rooms or units are exempt when:
an owner-occupied, one-family to four-family dwelling.
Familial status
refers to the presence of one or more individuals who have not reached the age of 18 and who live with either a parent or legal guardian. The term also includes a woman who is pregnant.
Unless a property qualifies as housing for older persons, all properties must be made available to families with children under the same terms and conditions as to anyone else.
The Housing for Older Persons Act of 1995 (HOPA) allows certain exemptions from the familial status protection.
Housing intended solely for occupancy by 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.
Jones v. Mayer
This decision is important because although the federal law exempts individual homeowners and certain groups, the 1866 law prohibits all racial discrimination without exception. A person who is discriminated against on the basis of race may still recover damages under the 1866 law. Where race is involved, no exceptions apply.
The U.S. Supreme Court has expanded the definition of the term race to include ancestral and ethnic characteristics, including certain physical, cultural, or linguistic characteristics that are commonly shared by a national origin group. These rulings are significant because discrimination on the basis of race, as it is now defined, affords due process of complaints under the provisions of the Civil Rights Act of 1866.
The Federal Fair Housing Act is administered by
The Office of Fair Housing and Equal Opportunity (OFHEO) under the direction of the Secretary of HUD
Any aggrieved person who believes illegal discrimination has occurred may file a complaint with HUD within
one year of the alleged act. HUD may also initiate its own complaint.
Complaints may be reported to the Office of Fair Housing and Equal Opportunity, Department of Housing and Urban Development, Washington, DC 20410, or to the Office of Fair Housing and Equal Opportunity in care of the nearest HUD regional office. Complaints also may be submitted directly to HUD using an online form.
Conciliation
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.
(Note that a North Carolina complaint filed with HUD will be referred to the North Carolina Human Relations Council for investigation because North Carolina has an equivalent state fair housing law. [See later discussion.])
Administrative proceedings are hearings held before
administrative law judges (ALJs)
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).
An ALJ has the authority to award actual damages to the aggrieved person or persons and, if it is believed the public interest will be served, to impose monetary penalties. The penalties range can be up to $10,000 for the first offense, up to $25,000 for a second violation within _____ years, and up to $50,000 for further violations within seven years.
5 years
The parties may elect civil action in federal court at any time within
two years of the discriminatory act. For cases heard in federal court, unlimited punitive damages can be awarded in addition to actual damages.
Whenever the attorney general has 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, the attorney general 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.
The purpose of the Civil Rights Act of 1866 is to prohibit the use of race in the sale or purchase of residential property. (t/f)
False
The purpose of the Civil Right Act of 1866 is to prohibit the use of race in the sale or purchase of any kind of property—real or personal.
The Federal Fair Housing Act of 1968 as amended prohibits discrimination based on sexual orientation. (t/f)
False
The FFA does not prohibit discrimination based on sexual orientation; rather, it prohibits discrimination based on race, color, national origin, religion, sex, familial status, and handicap.
What does the North Carolina Fair Housing Act of 1983 prohibit?
prohibits the same activities as the federal law (refer to the list of prohibited activities discussed under the Federal Fair Housing Act). Thus, one discriminatory act violates both federal and state laws and subjects the violator to both federal and state penalties.
North Carolina Fair Housing Act of 1983 Exemptions (private owners)
The Federal Fair Housing Act exempts private owners who sell their own homes without the use of a real estate broker.
There is no similar exemption to the state Fair Housing Act. Note that when there is a conflict between state and federal law, the most restrictive law applies: persons selling their own homes must not resort to discriminatory practices even though they are exempted by federal law.
The state does, however, exempt the rental of rooms in a private home occupied by the owner.
North Carolina Fair Housing Act of 1983 Exemptions
1) (1 to 4) (rental rooms)
2) Dormitory situations
The state Act exempts the rental of a unit in a one- to four-unit residential building if the owner or one of the owner’s family members lives in one of the units. The federal law exempts such a unit only if the owner lives in one of the units.
The state Act exempts the rental of rooms in a single-sex dormitory. The federal law does not include this exemption (although it is doubtful that such a practice would be prosecuted as a violation of the federal law).
The first place to file a complaint by those who have been injured by discriminatory housing acts in North Carolina is the
North Carolina Human Relations Commission
If there are reasonable grounds to believe unlawful discrimination took place and the Commission’s informal negotiation process does not work, the Commission must then
dismiss the complaint and issue a right-to-sue letter to the injured party (which entitles the party to bring a court case against the accused at the complainant’s own expense), or
file a lawsuit in state court against the accused.
Blockbusting (panic peddling)
is the act of encouraging people to sell or rent their homes by claiming that the entry of a protected class into the neighborhood will have some negative impact on property values.
Any message, 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 members of a certain protected class will cause property values to decline, crime or antisocial behavior to increase, and the quality of schools to suffer.
A critical element in blockbusting, according to HUD, is the profit motive.
Steering
is the channeling of home seekers to particular neighborhoods based on the presence or absence of a protected class. It also includes discouraging potential buyers from considering some areas. In either case, it is an illegal limitation of a purchaser’s options.
Discrimination in the Provision of Brokerage Services
It is unlawful to deny any person access to or membership or participation in any multiple-listing service, real estate brokers’ organization or other service, organization, or facility relating to the business of selling or renting dwellings, or to discriminate against an individual in the terms or conditions of such access, membership, or participation, on account of race, color, religion, sex, handicap, familial status, or national origin.
