1. Modern Real Estate Practice in Pennsylvania 12th Edition Chapter 17: Ethical Practices and Fair Housing

2. 17Fair Housing and Ethical Practices Learning objectives –Distinguish between law and ethics –Identify classes of people who are protected against discrimination in housing by various state and federal laws –Describe how state and federal fair housing laws are enforced, including penalties, sanctions –Explain the impact of state and federal fair housing laws on licensee conduct, advertising, and marketing –Define key terms 2 ©2012 Kaplan, Inc.

3. 17Fair Housing and Ethical Practices Professional ethics –System of moral standards for integrity and competence –Define code of conduct for relations within the industry –Fair Housing Act –Code of ethics 3 ©2012 Kaplan, Inc.

4. 17Fair Housing and Ethical Practices Equal opportunity in housing –Legal framework –Opportunity to live where one chooses –Real estate licensees must avoid prejudice In themselves From property owners –State laws often more strict than federal 4 ©2012 Kaplan, Inc.

5. 17Fair Housing and Ethical Practices Federal laws –Civil Rights Act of 1866 –Plessy v. Ferguson; Jones v. Mayer –Title VIII, Civil Rights Act of 1968 (Fair Housing Act) Race, color, religion, national origin Administered by HUD 5 ©2012 Kaplan, Inc.

6. 17Fair Housing and Ethical Practices Equal opportunity in housing –Fair Housing Amendments Act Families with children Disability –Housing for Older Persons Act (HOPA) Repealed “significant facilities and services” 55 and older Elderly persons –62 years (federal) –40 years (Pennsylvania) 6 ©2012 Kaplan, Inc.

7. 17Fair Housing and Ethical Practices Definitions –Familial status Under 18 living with parent/guardian over 18 Same terms and conditions for all –Disability Physical and mental impairment Substantially limits one or more major life activities Does not protect current users of illegal substances Landlords must allow reasonable modifications Can require deposit to restore to previous condition 7 ©2012 Kaplan, Inc.

8. 17Fair Housing and Ethical Practices Exemptions –Most federal exemptions under federal law do not apply in PA –Owner-occupied one-to-four family dwellings –Single-family housing sold or rented by owner –Organizations and private clubs –Individual does not own more than three such homes at one time –Real estate licensee is not involved –No discriminatory advertising 8 ©2012 Kaplan, Inc.

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10. 17Fair Housing and Ethical Practices Megan’s Law Equal Credit Opportunity Act Americans with Disabilities Act Pennsylvania Human Relations Act –Broader, applies to four or more employees –Applies to commercial property –Limited exemptions 10 ©2012 Kaplan, Inc.

11. 17Fair Housing and Ethical Practices Pennsylvania Real Estate Licensing and Registration Act –Prohibits discriminatory activities –Commission may discipline licensees Official notice and poster –Prominently displayed in place of business –Failure may be considered evidence of discrimination 11 ©2012 Kaplan, Inc.

12. 17Fair Housing and Ethical Practices Fair housing issues –Blockbusting (panic selling) –Steering –Advertising –Appraising –Redlining –Intent and effect –Response to concerns of terrorism –Threats or acts of violence 12 ©2012 Kaplan, Inc.

13. 17Fair Housing and Ethical Practices Enforcement of the Fair Housing Act –Complaints initiate investigation by HUD –Conciliation –Administrative proceedings –Penalties First offense: up to $16,000 Second offense: up to $37,500 Three or more offenses: up to $65,000 –Civil action in federal court 13 ©2012 Kaplan, Inc.

14. 17Fair Housing and Ethical Practices Implications for real estate licensees –Licensees are communities real estate experts –Must uphold reputation of community –Fair housing is the law PA fair housing guidelines –Standardized inventory –Consistent practices –Verifiable and measureable criteria –Written documentation 14 ©2012 Kaplan, Inc.