1. © 2010 Rockwell Publishing Lesson 14: Civil Rights and Fair Housing Principles of California Real Estate

2. © 2010 Rockwell Publishing Introduction Federal and state laws prohibit discrimination: based on race, religion, sex, and other characteristics applies to most real estate transactions Laws vary in: groups protected activities and transactions covered

3. © 2010 Rockwell Publishing Federal Antidiscrimination Laws Civil Rights Act of 1866 Civil Rights Act of 1866: prohibits discrimination on basis of race or color applies to all types of real estate transactions: residential or commercial improved or unimproved

4. © 2010 Rockwell Publishing Federal Antidiscrimination Laws Civil Rights Act of 1866 Act was passed right after Civil War, but widely ignored until 1968 Supreme Court decision Jones v. Mayer: Court held that act prohibits “all racial discrimination, private or public, in sale and rental of property.”

5. © 2010 Rockwell Publishing Title VIII of Civil Rights Act of 1968 is known as federal Fair Housing Act. Does not apply to nonresidential transactions (such as sale of commercial or industrial properties). Applies to sale or lease of: residential property vacant land to be used for residential construction Federal Antidiscrimination Laws Civil Rights Act of 1968

6. © 2010 Rockwell Publishing Fair Housing Act prohibits discrimination based on: race color religion sex national origin disability familial status Fair Housing Act Protected classes

7. © 2010 Rockwell Publishing In residential transactions, Fair Housing Act prohibits discrimination in the following activities: advertising (including real estate ads) lending brokerage (broker asked to violate act should decline the listing) other services Fair Housing Act Scope of law

8. © 2010 Rockwell Publishing Fair Housing Act always applies to any transaction involving real estate agent. Exemptions aren’t permitted when agent is involved. Agent may never discriminate. CA fair housing laws are stricter and offer even fewer exemptions. Fair Housing Act Real estate licensees

9. © 2010 Rockwell Publishing Fair Housing Act Exemptions: For sale by owner Law doesn’t apply to single-family home rented or sold by its owner if: owner owns no more than 3 such homes no real estate broker is employed no discriminatory advertising used If owner isn’t most recent occupant, she may use this exemption only once every 24 months.

10. © 2010 Rockwell Publishing Law doesn’t apply to rental of room or unit in dwelling with up to four units if: owner resides in one of the units no real estate broker employed no discriminatory advertising used Fair Housing Act Exemptions: Residential rental

11. © 2010 Rockwell Publishing Religious organizations may limit occupancy to members when dealing with their own property, so long as membership isn’t restricted based on race, color, or national origin. 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

12. © 2010 Rockwell Publishing Fair Housing Act Prohibited actions Refusal to rent or sell residential property after receiving good faith offer. Refusal to negotiate for sale or rental of residential property. Any other action that would make residential property unavailable.

13. © 2010 Rockwell Publishing 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. Using discriminatory loan criteria. Fair Housing Act Prohibited actions

14. © 2010 Rockwell Publishing Fair Housing Act Prohibited actions Federal Fair Housing Act also prohibits: blockbusting steering redlining

15. © 2010 Rockwell Publishing Prohibited Actions Blockbusting Blockbusting: When someone tries to induce homeowners to sell by predicting that: members of minority groups will be moving into neighborhood property values and quality of life will suffer as a result Also known as panic selling.

16. © 2010 Rockwell Publishing Prohibited Actions Steering Steering: Channeling prospective buyers or tenants to or away from particular neighborhoods based on their race, ethnicity, or other protected characteristic.

17. © 2010 Rockwell Publishing Prohibited Actions Steering No affirmative duty to show non-minority buyers houses in minority neighborhoods if they don’t request it. If non-minority buyers ask to be shown houses in minority neighborhoods, agent must comply.

18. © 2010 Rockwell Publishing Prohibited Actions Redlining Redlining: When lender refuses to make mortgage loans in particular neighborhood because of its racial or ethnic composition.

19. © 2010 Rockwell Publishing Fair Housing Act Disability 1988 amendments to Fair Housing Act added disability and familial status as protected categories. Disability: Physical and mental impairments that substantially limit one or more major life activities, including HIV/AIDS, mental illness, and alcoholism.

20. © 2010 Rockwell Publishing Disability Reasonable accommodations Under law, landlord must: make reasonable exceptions to rules for disabled tenants, and allow 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.

21. © 2010 Rockwell Publishing Fair Housing Act Familial 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 pregnant he/she has children he/she is about to adopt or gain custody of children

22. © 2010 Rockwell Publishing Fair Housing Act Enforcement Discrimination complaints may be pursued: with HUD’s Office of Fair Housing and Equal Opportunity via lawsuit in state or federal court

23. © 2010 Rockwell Publishing Fair Housing Act Enforcement HUD complaint must be filed within 1 year of discrimination and lawsuit must be filed within 2 years. If a case is found to involve “pattern or practice,” U.S. Attorney General may file federal lawsuit. HUD may also refer complaints to state for enforcement, as laws are similar.

24. © 2010 Rockwell Publishing Enforcement Administrative hearing If no conciliation agreement is reached between parties, and neither party decides to have case heard in court, an administrative hearing will be held. In hearing, HUD attorneys act on behalf of complainant, and administrative law judge will decide the case.

25. © 2010 Rockwell Publishing Enforcement Penalties If discrimination is found, administrative law judge or court might order: injunction against discriminatory activity affirmative steps to correct violation compensatory and/or punitive damages, including attorney’s fees civil penalty paid to federal government

26. © 2010 Rockwell Publishing Federal Antidiscrimination Laws Equal Credit Opportunity Act ECOA applies to all consumer credit: credit used for personal, family, or household purposes (e.g. residential mortgage loans)

27. © 2010 Rockwell Publishing Federal Antidiscrimination Laws Equal Credit Opportunity Act Prohibits lenders from discriminating against credit applicants on basis of: race color religion national origin sex marital status age receipt of public assistance

28. © 2010 Rockwell Publishing Federal Antidiscrimination Laws Americans with Disabilities Act ADA makes it illegal to discriminate against persons with disabilities in places of public accommodation. Public accommodations include real estate offices, stores, law offices, etc.

29. © 2010 Rockwell Publishing Federal Antidiscrimination Laws Americans with Disabilities Act The ADA seeks to protect rights of disabled to access places of public accommodation by requiring removal of architectural and communication barriers. Accessibility features must be added if “readily achievable.” Example: adding wheelchair ramp.

30. © 2010 Rockwell Publishing Summary Federal Antidiscrimination Laws Civil Rights Act of 1866 Civil Rights Act of 1968 Fair Housing Act Steering Blockbusting Redlining Familial status Equal Credit Opportunity Act ADA

31. © 2010 Rockwell Publishing State Antidiscrimination Laws California’s antidiscrimination laws include: Unruh Civil Rights Act Fair Employment and Housing Act Housing Financial Discrimination Act Real Estate Law and regulations

32. © 2010 Rockwell Publishing State Antidiscrimination Laws Unruh Civil Rights Act Law guarantees full use of services provided by business establishment, regardless of: racedisability colormedical condition religionsexual orientation ancestrymarital status national originfamilial status* sexage* * Additional categories for housing transactions.

33. © 2010 Rockwell Publishing Unruh Act Business establishments All business establishments are subject to Unruh Act. This includes: real estate brokerages (and licensees) apartment buildings condominium and homeowner associations

34. © 2010 Rockwell Publishing Unruh Act Penalties Violators of Unruh Act may have to pay: 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.

35. © 2010 Rockwell Publishing State Antidiscrimination Laws Fair Employment and Housing Act Fair Employment and Housing Act prohibits housing discrimination based on: racenational origin colorancestry religionfamilial status sexsource of income sexual orientationdisability marital status Also called the Rumford Act.

36. © 2010 Rockwell Publishing 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 race, religion, or other protected characteristic of buyer or tenant, but may verify identity and financial capacity. Fair Employment and Housing Act Prohibitions

37. © 2010 Rockwell Publishing The act also prohibits anyone from advertising housing for sale or rent in discriminatory terms. Fair Employment and Housing Act Prohibitions

38. © 2010 Rockwell Publishing Fair Employment and Housing Act Enforcement Discrimination complaints can be submitted to state’s Department of Fair Employment and Housing. If warranted, Department will issue an accusation and hold a hearing. Case may also be heard in superior court.

39. © 2010 Rockwell Publishing If discrimination found, violator may have to: sell or lease property or similar property to injured party pay actual damages pay civil penalty to state Court may also award punitive damages. Fair Employment and Housing Act Enforcement

40. © 2010 Rockwell Publishing State Antidiscrimination Laws Housing Financial Discrimination Act Prohibits residential lenders from discriminating based on: neighborhood characteristics (racial, ethnic, religious, or national origin composition) borrower’s race, color, religion, sex, marital status, national origin, or ancestry This kind of discrimination is called redlining.

41. © 2010 Rockwell Publishing State Antidiscrimination Laws Real Estate Law California’s Real Estate Law and 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 Real Estate Law. Real Estate Commissioner could revoke or suspend violator’s license.

42. © 2010 Rockwell Publishing Discriminatory Restrictive Covenants Covenants prohibiting sale or lease of 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.

43. © 2010 Rockwell Publishing This type of covenant may still appear in chain of title of some older properties. Such a covenant does not invalidate deed, although covenant itself is unenforceable. Conveyance can proceed, but restriction has no effect. Discriminatory Restrictive Covenants

44. © 2010 Rockwell Publishing Summary State Laws and Restrictive Covenants Unruh Civil Rights Act Fair Employment and Housing Act Housing Financial Discrimination Act Real Estate License Law Discriminatory restrictive covenants