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Principles of California Real Estate

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					       Washington
Real Estate Fundamentals


    Lesson 15:
  Civil Rights and
   Fair Housing
               Introduction

 Federal and state laws prohibit discrimination:
   based on race, religion, sex, or other
    characteristics
   in almost all real estate transactions
                Introduction

 Federal and state laws prohibit discrimination:
   based on race, religion, sex, or other
    characteristics
   in almost all real estate transactions

 Particular laws vary in terms of:
   what groups they protect, and
   what types of activities and transactions
    they apply to
Federal Antidiscrimination Laws
         Civil Rights Act of 1866
 Civil Rights Act of 1866:
   prohibits discrimination on the
    basis of race or color
Federal Antidiscrimination Laws
         Civil Rights Act of 1866
 Civil Rights Act of 1866:
   prohibits discrimination on the
    basis of race or color
   applies to any type of real estate
    transaction:
      residential or commercial
      improved or unimproved
Federal Antidiscrimination Laws
         Civil Rights Act of 1866
 The act was passed right after the Civil War.

 Not widely used until after 1968 Supreme
 Court decision Jones v. Mayer :
  Court held that the act prohibits “all racial
   discrimination, private or public, in the sale
   and rental of property.”
      Civil Rights Act of 1866
                Remedies
 Remedies available to a plaintiff who wins
 a lawsuit under the 1866 act include:
   injunction (an order to stop a violation)
   actual damages (to compensate plaintiff)
   punitive damages (an additional amount
    as a penalty)
Federal Antidiscrimination Laws
         Civil Rights Act of 1964
 Civil Rights Act of 1964 prohibits
 discrimination:
   based on race, color, religion, or national
    origin
   in programs and activities that receive
    financial assistance from the federal
    government
Federal Antidiscrimination Laws
        Civil Rights Act of 1964
 There were exclusions for the FHA and VA
 loan programs, limiting the impact of this law
 on real estate.
Federal Antidiscrimination Laws
         Civil Rights Act of 1968
 Title VIII of the Civil Rights Act of 1968 is
  better known as the Fair Housing Act.
Federal Antidiscrimination Laws
         Civil Rights Act of 1968
 Title VIII of the Civil Rights Act of 1968 is
  better known as the Fair Housing Act.

 Applies to sale or lease of:
   residential property
   vacant land to be used for residential
    construction
      Federal Fair Housing Act
                Scope of law
 In residential transactions, Fair Housing Act
 also prohibits discrimination in:
   advertising
   lending
   brokerage
   other services
      Federal Fair Housing Act
                  Scope of law
 Fair Housing Act prohibits discrimination
 based on:
      race            national origin
      color           handicap
      religion         (disability)
      sex             familial status
            Fair Housing Act
     Exemptions: For sale by owner
1. Doesn’t apply to a single-family home rented
   or sold by a private individual if:
     she owns no more than 3 such homes
            Fair Housing Act
     Exemptions: For sale by owner
1. Doesn’t apply to a single-family home rented
   or sold by a private individual if:
     she owns no more than 3 such homes
     no discriminatory advertising used
            Fair Housing Act
     Exemptions: For sale by owner
1. Doesn’t apply to a single-family home rented
   or sold by a private individual if:
     she owns no more than 3 such homes
     no discriminatory advertising used
     no real estate agent hired
            Fair Housing Act
     Exemptions: For sale by owner
1. Doesn’t apply to a single-family home rented
   or sold by a private individual if:
     she owns no more than 3 such homes
     no discriminatory advertising used
     no real estate agent hired

     If owner isn’t the most recent occupant,
     she may use this exemption only once
     every 24 months.
           Fair Housing Act
 Exemptions: Owner-occupied rental
2. Doesn’t apply to rental of a room or unit in
   a dwelling with up to four units if:
     owner resides in one of the units
           Fair Housing Act
 Exemptions: Owner-occupied rental
2. Doesn’t apply to rental of a room or unit in
   a dwelling with up to four units if:
     owner resides in one of the units
     no discriminatory advertising used
           Fair Housing Act
 Exemptions: Owner-occupied rental
2. Doesn’t apply to rental of a room or unit in
   a dwelling with up to four units if:
     owner resides in one of the units
     no discriminatory advertising used
     no real estate agent hired
          Fair Housing Act
               Exemptions
3. Religious organizations may limit
   occupancy to members when dealing
   with their own property.
          Fair Housing Act
               Exemptions
3. Religious organizations may limit
   occupancy to members when dealing
   with their own property.

4. Lodgings belonging to private clubs may
   give preference to their own members, if
   the lodgings are not open to the general
   public.
          Fair Housing Act
               Exemptions
 Fair Housing Act always applies to any
 transaction involving a real estate agent:
   exemptions aren’t permitted when an
    agent is involved
   an agent may never discriminate
          Fair Housing Act
               Exemptions
 Fair Housing Act exemptions aren’t
 important in Washington because state has
 a narrower set of exemptions to its housing
 law.
              Fair Housing Act
             Discriminatory actions
 The act specifically prohibits the following
  actions:

   refusal to rent or sell residential property
    after receiving a good faith offer
          Fair Housing Act
   Discriminatory actions cont’d
 refusal to rent or sell residential property
  after receiving a good faith offer

 refusal to negotiate for the sale or rent of
  residential property
          Fair Housing Act
   Discriminatory actions cont’d
 refusal to rent or sell residential property
  after receiving a good faith offer

 refusal to negotiate for the sale or rent of
  residential property

 any other action that would make
  residential property unavailable
        Fair Housing Act
  Discriminatory actions cont’d
 discriminating in terms or conditions of
  sale or rental of residential property
        Fair Housing Act
  Discriminatory actions cont’d
 discriminating in terms or conditions of
  sale or rental of residential property

 discriminatory advertising that indicates a
  preference or limitation
        Fair Housing Act
  Discriminatory actions cont’d
 discriminating in terms or conditions of
  sale or rental of residential property

 discriminatory advertising that indicates a
  preference or limitation

 representing that property is not available
  for inspection, rent, or sale when it is in
  fact available
           Fair Housing Act
     Discriminatory actions cont’d
 Fair Housing Act also prohibits:
   steering
   blockbusting
   redlining
       Discriminatory Actions
                  Steering
 Steering: Channeling prospective buyers
 or tenants to or away from particular
 neighborhoods based on their race, ethnicity,
 or another protected characteristic
      Discriminatory Actions
              Blockbusting
 Blockbusting: When someone tries to
 induce homeowners to sell by predicting
 that:
   members of minority groups will be
    moving into the neighborhood
   property values and quality of life will
    suffer as a result
       Discriminatory Actions
                 Redlining
 Redlining: When a lender refuses to make
 mortgage loans in a particular neighborhood
 because of its racial or ethnic composition
          Fair Housing Act

 1988 amendments to Fair Housing Act
 added handicap and familial status as
 protected categories.
           Fair Housing Act
                 Handicap
 1988 amendments to Fair Housing Act
 added handicap and familial status as
 protected categories.

 “Handicap” refers to:
   physical or mental impairment
   that substantially limit one or more
    major life activities
                   Handicap
     Reasonable accommodations
 Landlord must:
   make reasonable exceptions to rules for
    disabled tenants
                   Handicap
     Reasonable accommodations
 Landlord must:
   make reasonable exceptions to rules for
    disabled tenants
   allow disabled tenants to make reasonable
    modifications at their own expense
                 Handicap
     Reasonable accommodations
 Landlord isn’t required to modify property
 for tenant.

 Tenant can be required to restore property to
 original condition when tenancy ends.
                 Handicap
         Wheelchair accessibility
 Fair Housing Act’s wheelchair access rules
 apply to new construction of residential
 buildings with four or more units


 New construction: built since 1988
                 Handicap
         Wheelchair accessibility
 Entryways, hallways, kitchens, and bathrooms
 must be designed to accommodate
 wheelchairs.

 If building has an elevator, units above ground
 floor must accommodate wheelchairs.
            Fair Housing Act
               Familial status
 Familial status refers to parents or guardians
 who have children under 18 living with them.
             Fair Housing Act
                 Familial status
 Familial status refers to parents or guardians
  who have children under 18 living with them.

 It’s generally illegal to refuse to rent or sell to
  someone because:
    she is pregnant
    he or she has children
    he or she is about to adopt or gain custody
     of children
            Familial Status
      Housing for older persons
 “Housing for older persons” is exempt from
 the prohibition against discrimination
 against families with children.
            Familial Status
      Housing for older persons
 “Housing for older persons” is exempt from
 the prohibition against discrimination
 against families with children.

 Determining whether a property is intended
 for older persons involves consideration of:
   design
   facilities
   and advertising
             Fair Housing Act
        Housing for older persons
   To qualify as housing for older persons, a
   property must fit one of three categories:
1. Developed under a government program to assist
   the elderly.
             Fair Housing Act
        Housing for older persons
   To qualify as housing for older persons, a
   property must fit one of three categories:
1. Developed under a government program to assist
   the elderly.
2. Intended for and solely occupied by people age
   62 and older.
             Fair Housing Act
        Housing for older persons
   To qualify as housing for older persons, a
   property must fit one of three categories:
1. Developed under a government program to assist
   the elderly.
2. Intended for and solely occupied by people age
   62 and older.
3. Adhere to policies that show intent to house
   people age 55 and older. (At least 80% of the
   units must be occupied by a person over 55.)
           Fair Housing Act
               Enforcement
 A person who feels she has been
 discriminated against in violation of the
 Federal Fair Housing Act may:
   file a complaint with the Office of Fair
    Housing and Equal Opportunity
   file a lawsuit in state or federal court
           Fair Housing Act
               Enforcement
 A person who feels she has been
 discriminated against in violation of the
 Federal Fair Housing Act may:
   file a complaint with the Office of Fair
    Housing and Equal Opportunity
   file a lawsuit in state or federal court
 Complaint must be filed within one year of
  the discrimination.
 Lawsuit must be filed within two years.
          Fair Housing Act
              Enforcement
 The Office of Fair Housing and Equal
 Opportunity is part of the Department of
 Housing and Urban Development (HUD).
          Fair Housing Act
              Enforcement
 The Office of Fair Housing and Equal
 Opportunity is part of the Department of
 Housing and Urban Development (HUD).

 HUD may refer complaints to Washington
 Human Rights Commission, since state’s
 fair housing law is similar.
               Enforcement
         Conciliation agreement
 HUD will first try to negotiate a conciliation
  agreement with the person alleged to have
  discriminated.
             Enforcement
         Administrative hearing
 If no conciliation agreement is reached, and
 neither of the parties decides to have the
 case heard in federal court, an
 administrative hearing will be held.

 In a hearing, HUD attorneys act on behalf of
 the complainant, and an administrative law
 judge will decide the case.
             Enforcement
                 Penalties
 The administrative law judge might order:
   an injunction against discriminatory
    activity
   affirmative steps to correct a violation
   compensatory and/or punitive damages
   and/or a civil penalty paid to the federal
    government
       Summary
Federal Fair Housing Act
 Civil Rights Act of 1866
 Civil Rights Act of 1964
 Fair Housing Act
 Steering
 Blockbusting
 Redlining
 Handicap
 Familial status
        Other Federal Laws

 Equal Credit Opportunity Act (ECOA)

 Home Mortgage Disclosure Act (HMDA)

 Americans with Disabilities Act (ADA)
          Other Federal Laws
      Equal Credit Opportunity Act
 ECOA applies to all consumer credit:
   credit used for personal, family, or household
    purposes
          Other Federal Laws
      Equal Credit Opportunity Act
 ECOA applies to all consumer credit:
   credit used for personal, family, or household
    purposes
 Prohibits lenders from discriminating
  against credit applicants on the basis of:
    race                   sex
    color                  marital status
    religion               age
    national origin        receipt of public
                             assistance
          Other Federal Laws
    Home Mortgage Disclosure Act
 HMDA is aimed at detecting redlining.

 Requires large residential lenders to disclose
 each year:
   number and type of loans made
   loan amounts
   location of the properties
          Other Federal Laws
    Home Mortgage Disclosure Act
 HMDA is aimed at detecting redlining.
 Requires large residential lenders to disclose
 each year:
   number and type of loans made
   loan amounts
   location of the properties
 Government will investigate lenders who
 have made no loans or few loans in certain
 neighborhoods.
          Other Federal Laws
     Americans with Disabilities Act
 ADA (1992) is intended to ensure disabled
 people equal access to all public
 accommodations.
           Other Federal Laws
     Americans with Disabilities Act
 ADA (1992) is intended to ensure disabled
  people equal access to all public
  accommodations.
 Disability: any physical or mental impairment
  that substantially limits one or more major life
  activities
           Other Federal Laws
     Americans with Disabilities Act
 ADA (1992) is intended to ensure disabled
  people equal access to all public
  accommodations.
 Disability: any physical or mental impairment
  that substantially limits one or more major life
  activities
 Public accommodation: a private entity with
  facilities open to the public
    Examples: real estate offices, banks, stores
  Americans with Disabilities Act
                 Requirements
 If “readily achievable” in a public
 accommodation:
    architectural and communications barriers
     must be removed
  Americans with Disabilities Act
                 Requirements
 If “readily achievable” in a public
 accommodation:
    architectural and communications barriers
     must be removed
    auxiliary aids and services must be
     provided
  Americans with Disabilities Act
                 Requirements
 If “readily achievable” in a public
 accommodation:
    architectural and communications barriers
     must be removed
    auxiliary aids and services must be
     provided

 New commercial construction must be
 accessible to the disabled, unless structurally
 impractical.
               Summary
      Other Federal Laws

 Equal Credit Opportunity Act
 Home Mortgage Disclosure Act
 Americans with Disabilities Act
 Disability
 Public accommodation
  State Antidiscrimination Laws

 Washington’s state antidiscrimination laws
 include:
   the Washington Law Against
    Discrimination
   the Washington Fair Lending Act
   provisions of the real estate license law
  State Antidiscrimination Laws
Washington Law Against Discrimination
Washington law prohibits discrimination
based on:
    race             sensory, physical, or
    creed             mental disability
    color            use of a trained guide
    national origin   dog or service dog
    sex              sexual orientation
    marital status   honorably discharged
                       veteran or military
    familial status   status
Washington Law Against Discrimination
              Scope
 Prohibits discrimination in employment,
  credit transactions, public accommodations,
  and real estate transactions.
Washington Law Against Discrimination
              Scope
 Prohibits discrimination in employment,
  credit transactions, public accommodations,
  and real estate transactions.

 Applies to all types of real estate, not just
  housing:
    sale, appraisal, brokerage, exchange,
     purchase, rental or lease, and financing
Washington Law Against Discrimination
            Exemptions
 Person renting a room in own house is
  exempted and can discriminate; same with
  tenant seeking a roommate.
Washington Law Against Discrimination
            Exemptions
 Person renting a room in own house is
  exempted and can discriminate; same with
  tenant seeking a roommate.
 Student housing: discrimination based on
  sex, or familial or marital status allowed.
 Elderly housing: discrimination based on
  familial status allowed.
Washington Law Against Discrimination
            Exemptions
 Person renting a room in own house is
  exempted and can discriminate; same with
  tenant seeking a roommate.
 Student housing: discrimination based on
  sex or on familial or marital status allowed.
 Elderly housing: discrimination based on
  familial status allowed.
 Private club run by religious organization can
  discriminate based on religion.
Washington Law Against Discrimination
            Exemptions
 Federal Fair Housing Act’s exemptions don’t
  apply in Washington:
    sellers can’t discriminate
    landlords can’t discriminate
Washington Law Against Discrimination
            Exemptions
 Federal Fair Housing Act’s exemptions don’t
  apply in Washington:
    sellers can’t discriminate
    landlords can’t discriminate
 Real estate agents can never discriminate.
Washington Law Against Discrimination
            Enforcement
 Someone who feels she has been
  discriminated against may file complaint with
  Human Rights Commission.

 Complaint must be filed within six months of
  incident (or within one year for real estate-
  related complaint).
Washington Law Against Discrimination
            Enforcement
 Conference, conciliation, persuasion
 If unsuccessful, hearing before
  administrative law judge.
Washington Law Against Discrimination
            Enforcement
 Conference, conciliation, persuasion
 If unsuccessful, hearing before
  administrative law judge.
 Possible remedies:
    cease and desist order
    affirmative relief
    actual damages
    civil penalty
 Washington Fairness in Lending Act

 Prohibits:
   redlining
   varying loan terms based on
    neighborhood
   other lending standards with no
    financial basis
 Washington Fairness in Lending Act

 Prohibits:
   redlining
   varying loan terms based on
    neighborhood
   other lending standards with no
    financial basis
 Doesn’t prevent lender from using sound
  underwriting practices based on borrower’s
  creditworthiness or property’s value.
  State Antidiscrimination Laws
          Real estate license law
 Under real estate license law, licensee’s
 violation of any antidiscrimination law also
 violates license law and is grounds for
 discipline.
  State Antidiscrimination Laws
          Real estate license law
 Under real estate license law, licensee’s
 violation of any antidiscrimination law also
 violates license law and is grounds for
 discipline. Sanctions could include:
   license suspension or revocation
   fines (up to $5,000 per violation)
   completion of course on civil rights
   gross misdemeanor charges
          Discriminatory
       Restrictive Covenants
 Covenants prohibiting sale or lease of a
 property to nonwhites or non-Christians
 were once common.
          Discriminatory
       Restrictive Covenants
 Covenants prohibiting sale or lease of a
 property to nonwhites or non-Christians
 were once common.

 1948 U.S. Supreme Court decision Shelley
 v. Kraemer :
   unconstitutional for state or federal courts
    to enforce racially restrictive covenants
          Discriminatory
       Restrictive Covenants
 This type of covenant still appears in the
 chain of title of some older properties.

 Such a covenant does not invalidate the
 deed, although the covenant itself is
 unenforceable.
             Summary
  State Antidiscrimination Laws

 Washington Law Against Discrimination
 Washington Fair Lending Act
 Real estate license law

				
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