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national chp. 8
practice of real estate
| Term | Definition |
|---|---|
| civil rights act of 1866 | prohibits discrimination based on an individual's race or ancestry |
| federal fair housing act of 1968 and amendments protected classifications | FRESH CoRN 1. family status 2. race 3. equal 4.sex 5. handicap/disability 6.color 7.religion 8. national origin |
| ...family status | -pregnant women & families w/ children protected -does NOT apply to retirement communities where 80% of units are occupied by residents 55 or older |
| ...handicap/DISABILITY | any physical or mental impairment that substantially limits one or more major life activity -includes those suffering from HIV/AIDS -both current and recovered mental patients are protected |
| ...also includes under disability? | alcoholics and drug addicts are protected if seeking treatment -not protected if using illegal drugs -law specifically excludes those convicted of dealing drugs -landlords are not obligated to rent to person w/ history of violence |
| ...can disabled tentants make changes? | landlords must allow disabled tenants to make changes at tenant's expense -owner may require tenant to return property to original condition upon termination of lease |
| not protected | 1. AGE 2. sexual orientation (homosexuality) 3. marital status 4. occupation (student) |
| prohibited actions | -less favorable treatment -discriminatory or restrictive ads -steering -blockbusting -redlining |
| steering | channeling of potential buyers to or away from particular areas as a means of discrimination |
| blockbusting | aka panic peddling -inducing people to sell their homes bc of the entry into the neighborhood of members of protected classes |
| redlining | refusing to offer or limiting loans in certain areas -may not refuse to LOAN based on HIGH CRIME RATES in a neighborhood |
| exceptions | apply to the PERSON, not the property -no exceptions in regard to racial discrimination |
| exceptions on rentals | -rental or sale of a single-family home -rental of units (4-unit building or less) where the owner occupies one of the unites - rental or sale of unit in buildings w/ at least 80% of occupants age 55+ |
| senior housing exemption | may discriminate against families w/ children (familial status) |
| complaints | HUD will first investigate all incidents -when advertising, best to describe the property, not who should or shouldn't live there |
| how long can complaints be filed w/ HUD? | w/in one year of discriminatory act -aggrieved party can file civil suit directly in federal court w/in 2 years |
| when can a broker file a complaint? | could file complaint and request commission as damages if a seller refuses to accept an offer from a protected class -brokers best protection is to keep good records |
| in a complaint, HUD considers? | 1. testing studies done on company by HUD 2. properties shown to buyer or tenant 3. if an equal opportunity poster is displayed in the office |
| When will HUD no consider broker/salespersons intentions? | even if broker/salesperson felt he was working in the buyer's best interest -ex: showing only neighborhoods w/ children to a family |
| equal credit opportunity act (ECOA) | prohibits discrimination in all consumer credit transactions based on the following -race -religion -color -sex -national origin |
| ...prohibits lenders from refusing loans to the following qualified borrowers? | 1. age (must lend to retired persons) 2. marital status (may not deny if unmarried) 3. receipt of public assistance/income |
| who does ECOA not protect? | -minors -person's sexual orientation - people w/ erratic employment histories |
| what does ECOA require lenders to do? | give notice of why credit was refused |
| americans w/ disabilities act (ADA) | ensures equal access to PUBLIC accommodations for disabled persons -uses same definition as disability as federal fair housing act |
| ...public accommodations | those places accessible to the public -including broker's office and retail stores -fair housing laws specifically apply to housing accommodations |
| megan's law | registration of sex offenders -brokers should inform buyers who may be concerned about a registered sex offender to contact local law enforcement offices -states vary on requirements of brokers for disclosure and how to inform buyers of this law |
| ethics for real estate professionals | refers to a system of moral principles, rules, and standards of conduct |
| expectations of brokers and salespeople | -exhibit higher level knowledge & competency than nonliscensed individual -protect interest of clients & treat all parties fairly & honestly -complete all state-mandated disclosures in time -fully explain to client obligations of c&b transaction |
| disclosure and practicing w/in level of competence | all real estate professionals are expected to know when they are not competent to performa a task |
| ...examples | -practicing outside area of expertise (res. selling comm) -broker completing & presenting legal docs that aren't fully understood -salesperon/broker becomes competent by completing education & working w/ others who are knowledgeable in area of practice |
| real estate professional is expected to fully disclose | -who they rep in transaction -obligations of all parties in regard to disclosure of material defects -whether she is a principal in the transaction -any environmental, material, or other issues requiring disclosure that might impact the property |
| illegal practice of law...legal advice | -real estate professionals must know when they need to recommend a party they are working w/ should seek legal advice |
| ...who should broker associates and salespeople recommend? | the use of attorneys, accountants, and other appropriate counsel to both buyers and seller |
| ...when is a licensee not allowed to give legal advice? | on ANY aspect of the real estate transaction |
| national do not call registry | national list of phone numbers telemarketers cannot call -brokers/salespeople must check the list before cold calling |
| ...when consumer makes an inquiry? | brokers may contact them for 3 months after they have made an inquiry |
| ...broker and consumers establish a business relationship? | may call consumers for up to 18 months after the last purchase |
| 8-7 brokers trust accounts | accounts w/ funds held for others by brokerage firm -ex: earnest money, tax and insurance, escrow payment, unearned commissions |
| handling earnest money deposits | licensee must give earnest money checks to listing brokerage firm immediately after the offer is accepted |
| ...who MUST DEPOSIT THE FUNDS in a TRUST account? | managing or employing broker of listing firm -time limit for depositing earnest money is set by state law |
| ...trust accounts must be? | demand accounts that allow for free deposit and withdrawal of funds |
| ...if broker receives a NSF check? | not sufficient funds check -broker must immediately inform the seller |
| commingling | prohibited -brokers cannot mix personal funds w/ trust funds |
| conversion | using trust funds for personal reasons or for other people |
| broker must keep accurate records of? | all money deposited in and disbursed from the trust account |
Created by:
kmills5
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