lesson 14: civil rights and fair housing principles of california real estate
TRANSCRIPT
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Lesson 14: Lesson 14:
Civil Rights and Civil Rights and
Fair Housing Fair Housing
Principles of California Real Estate
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Introduction
Federal and state laws prohibit discrimination:based on race, religion, sex, and other
characteristicsand apply to most real estate transactions
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Introduction
Laws vary in terms of:catagories of groups protected, andtypes of activities and transactions
that are covered
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Federal Antidiscrimination LawsCivil Rights Act of 1866
Civil Rights Act of 1866:prohibits discrimination on the
basis of race or colorapplies to all types of real estate
transactions: residential or commercial improved or unimproved
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Federal Antidiscrimination LawsCivil Rights Act of 1866
The act was passed right after the Civil War, but 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.”
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Civil Rights Act of 1866Remedies
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)
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Federal Antidiscrimination LawsCivil Rights Act of 1964
Civil Rights Act of 1964 prohibits discrimination:based on race, color, religion, or national
originin programs and activities that receive
financial assistance from the federal government
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Federal Antidiscrimination LawsCivil Rights Act of 1964
However, exclusions for the FHA and VA loan programs limited the impact of this law on housing discrimination.
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Title VIII of the Civil Rights Act of 1968 is better known as the Federal Fair Housing Act.
Federal Antidiscrimination LawsCivil Rights Act of 1968
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Title VIII of the Civil Rights Act of 1968 is better known as the Federal Fair Housing Act.
Applies to sale or lease of:residential propertyvacant land to be used for residential
construction
Federal Antidiscrimination LawsCivil Rights Act of 1968
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In residential transactions, Fair Housing Act also prohibits discrimination in:advertisinglendingbrokerageother services
Federal Fair Housing ActScope of law
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Fair Housing Act prohibits discrimination based on:
Federal Fair Housing ActScope of law
race color religion sex
national origin disability familial status
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Fair Housing ActExemptions
While the Federal Fair Housing Act applies to the majority of real estate transactions, four types of transactions are exempt from the law’s provisions:for sale by ownerowner-occupied rentalreligious organizationsprivate clubs
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Fair Housing ActExemptions: For sale by owner
Law doesn’t apply to a single-family home rented or sold by a private individual if:she owns no more than 3 such homesno discriminatory advertising usedno real estate broker used in transaction
If owner isn’t the most recent occupant, she may use this exemption only once every 24 months
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Law 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 unitsno discriminatory advertising usedno real estate broker used in
transaction
Fair Housing ActExemptions: Owner-occupied rental
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Religious organizations may limit occupancy to members when dealing with their own property.
Fair Housing ActExemptions
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Religious organizations may limit occupancy to members when dealing with their own property.
Lodgings belonging to private clubs may give preference to their own members, if the lodgings are not open to the general public.
Fair Housing ActExemptions
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Fair Housing Act always applies to any transaction involving a real estate agent.Law’s exemptions aren’t permitted when
an agent is involved.An agent may never discriminate.
Fair Housing ActExemptions
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Fair Housing Act always applies to any transaction involving a real estate agent.Law’s exemptions aren’t permitted when
an agent is involved.An agent may never discriminate.
Also, the act’s exemptions almost never apply to transactions in California.State laws don’t include these
exemptions.
Fair Housing ActExemptions
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Fair Housing ActProhibited Actions
Refusal to rent or sell residential property after receiving a good faith offer.
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Fair Housing ActProhibited Actions
Refusal to rent or sell residential property after receiving a good faith offer.
Refusal to negotiate for the sale or rent of residential property.
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Fair Housing ActProhibited Actions
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.
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Discriminating in terms or conditions of sale or rental of residential property.
Fair Housing ActProhibited Actions
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Discriminating in terms or conditions of sale or rental of residential property.
Discriminatory advertising that indicates a preference or limitation.
Fair Housing ActProhibited Actions
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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 ActProhibited Actions
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Fair Housing ActProhibited Actions
Federal Fair Housing Act also prohibits:steeringblockbustingredlining
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Prohibited ActionsSteering
Steering: Channeling prospective buyers or tenants to or away from particular neighborhoods based on their race, ethnicity, or other protected characteristics.
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Prohibited ActionsBlockbusting
Blockbusting: When someone tries to induce homeowners to sell by predicting that:members of minority groups will be
moving into the neighborhoodproperty values and quality of life will
suffer as a result
Also known as panic selling.
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Prohibited ActionsRedlining
Redlining: When a lender refuses to make mortgage loans in a particular neighborhood because of its racial or ethnic composition. The prohibition against redlining is
enforced through the Home Mortgage Disclosure Act.
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Fair Housing Act
1988 amendments to Federal Fair Housing Act added disability and familial status as additional protected categories covered by the law.
“Disability” refers to:physical and mental impairments that
substantially limit one or more major life activities, including HIV/AIDS, mental illness and alcoholism.
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DisabilityReasonable accommodations
Under the law, a landlord must:make reasonable exceptions to rules for
disabled tenants, andallow disabled tenants to make reasonable
modifications at their own expense.
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DisabilityReasonable accommodations
Under the law a landlord must:make reasonable exceptions to rules for
disabled tenants, andallow disabled tenants to make reasonable
modifications at their own expense
Landlord isn’t required to modify property for tenant, and tenant can be required to restore property to original condition when tenancy ends.
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DisabilityWheelchair accessibility
Law’s wheelchair access rules apply to new construction of residential buildings (built since 1988) with four or more units.
Entryways, hallways, kitchens, and bathrooms must be designed to accommodate wheelchairs.
If building has an elevator, units above ground floor must accommodate wheelchairs.
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Fair Housing ActFamilial status
Familial status refers to adults who have, or will have, children under 18 living with them.
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Fair Housing ActFamilial status
Familial status refers to adults who have, or will have, children under 18 living with them.
It’s generally illegal to refuse to rent or sell to someone because:she is pregnanthe or she has childrenhe or she is about to adopt or gain custody
of children
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Familial StatusHousing for older persons
“Housing for older persons” is exempt from the prohibition against discrimination against families with children.
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Familial StatusHousing 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, andadvertising.
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To qualify as housing for older persons, a property must have been:Developed under a government program
to assist the elderly.Intended for and solely occupied by
people age 62 and older.Intended for older persons and at least
80% of the units are occupied by at least one person 55 years or older.
Fair Housing ActHousing for older persons
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Fair Housing ActEnforcement
A person who feels she has been discriminated against in violation of the Federal Fair Housing Act may:file a complaint with HUD’s Office of Fair
Housing and Equal Opportunity, orfile a lawsuit in court.
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Fair Housing ActEnforcement
Complaint must be filed within one year of the discrimination and lawsuit must be filed within two years.
If a case is found to involve a “pattern or practice” U.S. Attorney General may file federal suit.
HUD may also refer complaints to the California Department of Fair Employment and Housing, since state laws are similar.
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EnforcementAdministrative hearing
If HUD is unable to negotiate an agreement between the parties in a dispute, 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.
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EnforcementPenalties
If violation found, an administrative law judge or the courts might order:an injunction against discriminatory
activity,affirmative steps to correct a violation,compensatory and/or punitive damages,
and/ora civil penalty paid to the federal
government.
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SummaryFederal Antidiscrimination Laws
Civil Rights Act of 1866 Civil Rights Act of 1964 Federal Fair Housing Act Steering Blockbusting Redlining Disability Familial status
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Other Federal Laws
Equal Credit Opportunity Act (ECOA)
Home Mortgage Disclosure Act
Americans with Disabilities Act
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Other Federal LawsEqual Credit Opportunity Act
ECOA applies to all consumer credit transactions, i.e. credit used for personal, family, or household purposes, including residential mortgage loans.
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Other Federal LawsEqual Credit Opportunity Act
The law prohibits lenders, brokers and others from discriminating against credit applicants on the basis of:
race color
religion national origin
sex marital status
age receipt of public assistance
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Other Federal LawsHome Mortgage Disclosure Act
HMDA is designed to detect redlining.
Requires larger residential lenders to disclose:number and type of loans madeloan amountslocation of the properties
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Other Federal LawsHome Mortgage Disclosure Act
HMDA is aimed at detecting redlining.
Requires larger residential lenders to disclose:number and type of loans madeloan amountslocation of the properties
Government will investigate lenders who have made no loans or few loans in certain neighborhoods.
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Other Federal LawsAmericans with Disabilities Act
ADA (1992) is intended to ensure that people with disabilities have equal access to all public accommodations.
Disability: Any physical or mental impairment that substantially limits one or more major life activities.
Public accommodation: A public or private entity with facilities open to the public.Examples: real estate offices, banks, stores
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If “readily achievable” a public accommodation must:
remove architectural and communications barriers
provide auxiliary aids and services
New commercial construction must be accessible to the disabled, unless structurally impractical.
Americans with Disabilities ActRequirements
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SummaryOther Federal Laws
Equal Credit Opportunity Act Home Mortgage Disclosure Act Americans with Disabilities Act Disability Public accommodation
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State Antidiscrimination Laws
California’s antidiscrimination laws include:the Unruh Civil Rights Actthe Fair Employment and Housing Actthe Housing Financial Discrimination Actthe Real Estate Law and regulations
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State Antidiscrimination LawsUnruh Civil Rights Act
Unruh Act entitles everyone to full use of services provided by a business establishment, regardless of:
racecolorreligionancestrynational originsexdisability
medical conditionsexual orientationmarital statusage*familial status*
*Additional categories for housing transactions
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State Antidiscrimination LawsUnruh Civil Rights Act
In addition to all the previous protected categories, housing-related transactions also include protections against discrimination on the basis of age or familial status (except for qualified senior citizen housing).
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Unruh ActBusiness establishments
All business establishments are subject to the Unruh Act.
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Unruh ActBusiness establishments
All business establishments are subject to the Unruh Act.
This includes:real estate brokerages and licenseesapartment buildingscondominium and homeowner
associationsreal estate developments
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Although the Unruh Act generally prohibits “No children” rules, there are exceptions for qualified senior citizen developments.
Exception: may require at least one member of each
household to be 55 or older, with some exceptions, and
may exclude anyone younger than 45.
Unruh ActSenior citizen developments
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Unruh ActPenalties
Violators of the Unruh Act may have to pay:
the injured party’s actual damages and attorney’s fees, and
up to three times the amount of actual damages or $4,000, whichever is more.
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State Antidiscrimination LawsFair Employment and Housing Act
Prohibits housing discrimination based on:
race color religion sex sexual orientation marital status
national origin ancestry familial status source of income disability
Also called the Rumford Act.
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Prohibits discrimination in sale, leasing, or financing of any type of housing.Applies to real estate agents and property
managers as well as sellers and landlords.
Fair Employment and Housing ActProhibitions
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Prohibits discrimination in sale, leasing, or financing of any type of housing.Applies to real estate agents and property
managers as well as sellers and landlords.
Unlawful for seller or landlord to ask about the race, religion, or other protected characteristic of a buyer or tenant, but they may verify identity and financial capacity.
Fair Employment and Housing ActProhibitions
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Fair Employment and Housing ActExemptions
The act does not apply to accommodations operated by nonprofit religious, fraternal, or charitable organizations.
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Fair Employment and Housing ActExemptions
The act does not apply to accommodations operated by nonprofit religious, fraternal, or charitable organizations.
It also does not apply to rental of part of a single-family, owner-occupied home to a boarder.
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Fair Employment and Housing ActEnforcement
Housing discrimination complaints may be submitted to the Department of Fair Employment and Housing.The Department will investigate the
complaint and issue an accusation and hold a hearing, as necessary.
The case may also be heard in superior court.
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If found guilty, the violator may have to:sell or lease the property or similar
property to the injured party,pay actual damages to the injured party,
and/orpay a civil penalty to the state.
The superior court may award punitive damages instead of civil penalties.
Fair Employment and Housing ActEnforcement
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State Antidiscrimination LawsHousing Financial Discrimination Act
Prohibits residential lenders from:discriminating on the basis of
neighborhood characteristicsconsidering neighborhood’s racial, ethnic,
religious, or national origin compositiondiscriminating based on borrower’s race,
color, religion, sex, marital status, national origin, or ancestry.
Also called the Holden Act.
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State Antidiscrimination LawsReal Estate Law
California’s Real Estate Law and the Commissioner’s regulations also prohibit discrimination by real estate licensees.
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State Antidiscrimination LawsReal Estate Law
California’s Real Estate Law and the Commissioner’s regulations also prohibit discrimination by real estate licensees.
Any violation of federal or state fair housing or civil rights laws is grounds for disciplinary action under the Real Estate Law.
Real Estate Commissioner could revoke or suspend the violator’s license.
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Discriminatory Restrictive Covenants
Covenants prohibiting sale or lease of a property to non-whites 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.
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This type of covenant may still appear in the chain of title of some older properties.
Such a covenant does not invalidate the deed, although the covenant itself is unenforceable. The conveyance can proceed, but the
restriction has no effect.
Discriminatory Restrictive Covenants
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SummaryState Laws and Restrictive Covenants
Unruh Civil Rights Act Fair Employment and Housing Act Housing Financial Discrimination Act Real Estate License Law Discriminatory restrictive covenants