chapter 20. georgia real estate an introduction to the profession eighth edition chapter 20 fair...

Chapter 20

Georgia Real Estate An Introduction to the Profession

Eighth Edition

Chapter 20

Fair Housing, ADA, Equal Credit, and Community Reinvestment

Key Terms• Americans with

Disabilities Act (ADA)

• block busting• Civil Rights Act of

1866• Community

Reinvestment Act (CRA)

• Equal Credit Opportunity Act (ECOA)

• Fair Housing Act• familial status• handicapped• protected class• steering• tester

© 2015 OnCourse Learning

Fair Housing Constitutional ConceptsNo one can have their property taken from them without court proceedings.

Racial discrimination in real estate transactions is prohibited.


Fair Housing Constitutional ConceptsThe equal protection clause of the 14th amendment prohibits the judicial enforcement by state courts of restricted covenants based on race or color.


Fair Housing Laws

The Civil Rights Act of 1866 prohibits discrimination in housing.

In 1968, the Supreme Court affirmed that the 1866 act prohibits “all racial discrimination, private as well as public, in the sale of real property”.


Fair Housing Laws

The Fair Housing Act creates protected classes of people, making it illegal to discriminate on the basis of race, color, religion, sex, national origin, physical handicap, or familial status in connection with the sale or rental housing and any vacant land.


Fair Housing LawsThere are three ways that a fair housing act violation can be proven:• intentional discrimination against

someone in a protected class• regulation that results in a

discriminatory impact• if an owner fails to reasonably

accommodate members of a protected class


Fair Housing Laws

If an occupant develops a disability, the owner or landlord must attempt to reasonably accommodate that occupants needs.


1988 Amendment to Fair Housing ActIn 1988, the Civil Rights Act of 1968 was expanded to provide for housing for the handicapped, as well as for people with children under the age of 18.


1988 Amendment to Fair Housing ActHandicapped is defined in three ways:• having a physical or mental

impairment that substantially limits one or more major life activities

• having a record of having such an impairment

• being regarded as having such an impairment


1988 Amendment to Fair Housing ActThe handicapped are also allowed to make reasonable modifications to existing units, as long as it is at the handicapped person’s expense.


1988 Amendment to Fair Housing Act

The landlord may require the tenant to restore the unit to its original condition upon termination of occupancy if the changes to the unit would not be conducive to renting to another tenant.



The law also makes it unlawful for a landlord or owner to refuse to make reasonable accommodations when it is necessary to afford a handicapped person an equal opportunity to use and enjoy the dwelling.



All new multifamily dwellings with four or more units must be constructed to allow access and use by handicapped persons.

Doors and hallways must be wide enough to accommodate wheelchairs.


1988 Amendment to Fair Housing ActHandicapped does not include current illegal use of or addiction to a controlled substance but does include recovering drug addicts.



Handicap status also does not include any person whose tenancy imposes a direct threat to the health, safety, and property of others.


Familial Status

Familial status is defined as one or more individuals being living with a parent or another person having legal custody of such individual or individuals.


Familial Status

These protections also apply to any person was pregnant or is in the process of securing legal custody of any individual who is under 18 years old.


Familial Status

One cannot discriminate against anyone on the basis of familial status when leasing, selling, renting property.


Familial Status Exemptions

There are specific exemptions to this act:

A building can qualify for an exemption if it provides housing designed and operated to assist elderly persons




A building can qualify for an exemption if it provides housing intended for and generally occupied only by person 62 years of age or older




A building can qualify for an exemption if it provides housing of which at least 80% of the units are occupied by at least one person 55 years of age or older.


Penalties

The first violation of the act results in a fine of not more than $50,000; for subsequent violations, the fine is not more than $100,000.

The fine is in addition to other civil damages, injunctions, reasonable attorneys fees and costs.


Penalties

It is unlawful to refuse to sell or rent, or to refused to negotiate the sale or rental of, any property based on familial status or handicapped status.


Penalties

Advertising cannot make any reference to preference based on handicapped or familial status.


Penalties

The landlord cannot deny the right of the handicapped tenant to make any changes in the building, provided that the tenant agrees to reinstate the building to its original state upon departure.


Illegal Acts1. Refusing to sell or rent to, deal with

or negotiate with any person2. Discriminating in the terms or

conditions of buyer or renting housing

3. Discriminating by advertising that housing is available only to people of a certain race, color, religion, sex or national origin, those who are not handicapped or adults.


Illegal Acts4. Denying that housing is available for

inspection, sale, or rent when it really is.

5. Denying or making different terms or conditions for home loans by commercial lenders

6. Denying anyone the use of real estate services related to selling or renting of housing

7. Steering or block busting© 2015 OnCourse Learning

Steering

Steering is the practice of directing home seekers to particular neighborhoods based on race, color, religion, sex, national origin, nonhandicapped status, or adults-only status.


Steering

Examples include showing only certain neighborhoods, slanting property descriptions, and downgrading neighborhoods.


Steering

Steering is often subtle.

Steering accounts for the bulk of the complaints filed against real estate licensees under the fair housing law.


Block BustingBlock busting is the illegal practice of inducing panic selling in the neighborhood for financial gain.

Blockbusting starts when one person induces another to sell property cheaply by stating that an impending change in the racial or religious composition of the neighborhood will cause property values to fall.


Block Busting

The process snowballs as residents panic and sell at progressively lower prices.

Homes are then re-sold to incoming residents at higher prices.


Housing Covered by 1968 Fair Housing LawThe 1968 Fair Housing Law applies to the following types of housing:• Single-family houses owned by

private individuals when a broker is used and or discriminatory advertising is used

• Single-family houses not owned by private individuals


Housing Covered by 1968 Fair Housing LawThe 1968 Fair Housing Law applies to the following types of housing:• Single-family houses owned by a

private individual who owns more than three houses

• Multifamily dwellings of five or more units

• Multifamily dwellings containing four or fewer units, if the owner does not reside in one of the units


Acts Not Prohibited by 1968 Fair Housing LawThe Fair Housing Law does NOT apply if:• a broker is not used• discriminatory advertising is not used• no more than one house in which the

owner was not the most recent resident is sold during any two-year period


Acts Not Prohibited by 1968 Fair Housing LawAlso exempt:• religious organizations if membership

is not restricted by race or national origin

• private clubs that limit occupancy to members

• housing for elderly with minimum age requirements


Acts Not Prohibited by 1968 Fair Housing Law

Those acts are prohibited when discrimination based on race occurs in connection with such acts.


Fair Housing Enforcement

The Fair Housing Act can be enforced by anyone who feels discriminated against.• File a complaint with HUD• File a complaint in district, state or

local court• File a complaint with the US attorney

general



The burden of proving illegal discrimination is the responsibility of the person filing the complaint.



The following remedies are available:• injunction to stop the sale or rental of

property to someone else• money for actual damages caused by

the discrimination• punitive damages• court costs



There are criminal penalties for those who coerce, intimidate, threaten or interfere with a person’s buying, renting or selling of housing.


Agent’s DutiesIf a property owner asks an agent to discriminate, the agent must refuse to accept the listing.

An agent is in violation of fair housing laws by giving a minority buyer or seller less than favorable treatment or by ignoring him or referring him to an agent of the same minority.


Agent’s Duties

Violation also occurs when an agent fails to use best efforts or does not submit an offer because of race, color, religion, sex, national origin, handicap or familial status.


Testers

Testers respond to advertising and visit real estate offices to test for compliance with fair housing laws.

The tester plays the role of a person looking for housing to buy or rent and observes whether fair housing laws are being followed.


State Laws

Georgia has a fair housing law that essentially mimics the federal legislation.


Americans with Disabilities ActThe Americans with Disabilities Act (ADA) deals primarily with commercial property.

It provides access requirements and prohibits discrimination against people with disabilities in public accommodations.


Americans with Disabilities Act

Anyone who has had a physical or mental handicap, is covered by the Act.


Scope

Facilities need to be usable by those with disabilities.

All commercial facilities must also be accessible to the maximum extent feasible whenever alterations are being performed on the facility.


Equal Credit Opportunity ActThe Equal Credit Opportunity Act (ECOA) provides for equal credit for borrowers by making it unlawful to discriminate against an applicant for credit based on sex or marital status.


Equal Credit Opportunity Act

The Act also prohibits discrimination in any credit transaction based on race, color, religion, national origin, sex, marital status, age and the receipt of public assistance.


Prohibited Requests

A creditor is prohibited from requiring certain information from the borrower:• information concerning a spouse or

former spouse except when they will be obligated for repayment

• information regarding the applicant’s marital status


Prohibited Requests

A creditor is prohibited from requiring certain information from the borrower:• information concerning the source of

an applicant’s income without disclosing that information regarding alimony, child support or separate maintenance


Prohibited RequestsA creditor is prohibited from requiring certain information from the borrower:• information regarding an applicant’s

birth control practices or any intentions regarding the bearing of children

• questions regarding race, color, religion or national origin of the applicant


Evaluating Credit Applications

The lender cannot use information obtained from an applicant that might be considered to be illegally discriminatory.

The lender’s rules must be applied uniformly to all applicants.



AgeA lender is prohibited from taking an applicant’s age into account in determining ability to repay.



ChildrenThere can be no assumptions or statistics relating to the likelihood that a group of people may bear children.



Part-Time IncomeIncome from part-time employment or retirement income cannot be discounted because of the basis of its source.


Evaluating Credit ApplicationsAlimony and Child SupportAlimony and child support cannot be considered in evaluating a loan application unless the creditor determines that such payments are not likely to be made consistently. © 2015 OnCourse Learning

Evaluating Credit ApplicationsCredit HistoryThe Equal Credit Opportunity Act prohibits the lender from tying the applicant’s credit history to the past record of the spouse or former spouse.


Evaluating Credit ApplicationsImmigration ResidencyA creditor may consider an applicant’s immigration status and whether or not the applicant is a permanent resident of the United States.



SexA lender may not ask about the sex of an applicant.



Marital StatusA lender may not seek information about a spouse or former spouse unless a spouse will be permitted to use the account or the borrower is relying on the spouse’s income as a basis for repayment of the loan.


Credit Denial

If an applicant is denied credit, the lender must give a written notice of decline.


Possible Reasons for Credit Denial• Inability to verify credit references• Temporary or irregular employment• Insufficient length of employment• Insufficient income• Excessive obligations• Inadequate collateral• Too short a period of residency• Delinquent credit obligation


Penalties

Failure to comply with the Equal Credit Opportunity Act makes a creditor subject to civil liability for damages, limited to $10,000 in individual actions and the lesser of $500,000 or 1% of the creditor’s net worth in class actions.


Copies of Appraisal Reports

A lender or loan officer must make available a copy of an appraisal report to an applicant for a loan to be secured by a lien on the property.


chapter 20. georgia real estate an introduction to the profession eighth edition chapter 20 fair...

Documents

fair housing act handicapped

fair housing laws

fair housing act violation

oncourse learning slide

rental housing

civil rights act

community reinvestment

disabilities act ada