Modern Real Estate Practice in Pennsylvania 12th Edition

Chapter 17: Ethical Practices and Fair Housing

17 Fair 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

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17 Fair 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

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17 Fair 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

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17 Fair 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

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17 Fair 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– Housing for Older Persons Act (HOPA)• Repealed “significant facilities and services”• 55 and older• Elderly persons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)

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17 Fair 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

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• 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

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17 Fair 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

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• 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

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• Fair housing issues– Blockbusting (panic selling)– Steering– Advertising– Appraising– Redlining– Intent and effect– Response to concerns of terrorism– Threats or acts of violence

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17 Fair 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

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17 Fair 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

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