Fair Housing - empire-course-materials-cf.s3-us-west-2

Cover • A

CONTINUING EDUCATION

3 Hours

[email protected] | EmpireLearning.com | 855-460-1634

Fair Housing

i • Table of Contents

TABLE OF CONTENTS

Chapter 1: Fair Housing Laws 3Summary of Fair Housing Laws 3Federal Fair Housing Laws 4California Fair Housing Laws and Regulations 10

Chapter 1: Test Your Knowledge 17Chapter 1: Solutions and Suggested Responses 18

Chapter 2: Fair Lending Laws 19Equal Credit Opportunity Act 19The Housing Financial Discrimination Act of 1977 - Fair Lending Notice 22Home Mortgage Disclosure Act (HMDA) 23


Chapter 3: Special Topics 27Department of Housing and Urban Development (HUD) 27Equal Access for LGBT Persons 31Recent HUD Updates on Criminal History 32Voluntary Affirmative Marketing Agreement (VAMA) 33If You Think Your Housing Rights Have Been Violated 37


End of study materials 44

ii • Introduction

FAIR HOUSING

COURSE DESCRIPTION

Fair housing and fair lending in the sale and rental of real estate has been an issue since the 1960s. Many state and federal regulations have been instituted in the past 50 years that are still in effect today, although they are continually being revised to accommodate changes in society.

This course will highlight the prominent fair housing and fair lending laws that every real estate licensee needs to be aware of when selling or leasing real property. It will also address the role that HUD plays in fair housing, the rights of LGBT persons, advertising issues with the Voluntary Affirmative Marketing Agreement (VAMA), and what course of action should be taken if a violation occurs.

Credit Hours: 3 Hours Category: Fair Housing

This course is sold with the understanding that the publisher is not engaged in rendering legal or tax advice and assumes no liability in connection with its use. Since laws are constantly changing and vary by state and county, we urge you to do additional research and consult appropriate experts before relying on the information contained in this course to render professional advice. The advice and strategies in this course may not be suitable for your situation.

© Empire Learning, 2019

3 • Chapter 1: Fair Housing Laws

CHAPTER 1: FAIR HOUSING LAWS

SUMMARY OF FAIR HOUSING LAWSMany of the fair housing regulations can be quite lengthy and detailed so a summary of each is included here followed by more detailed information below:

Fair Housing Act (Federal)

Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).

Civil Rights Act of 1966 and 1970, 42 U.S.C. § 1981, 1982

These laws provide protection to those who have been denied property rights on the basis of race. The laws cover the right to make and enforce contracts as well as equal protection under the law.

Americans with Disabilities Act

The Americans with Disabilities Act (ADA) prohibits discrimination on the basis of disability in employment, State and local government, public accommodations, commercial facilities, transportation, and telecommunications.

Unruh Civil Rights Act

The Unruh Civil Rights Act provides protection from discrimination by all business establishments in California, including housing and public accommodations. The protected classes under the Unruh Act include those covered by the Fair Housing Act and extend to sexual orientation, gender identity, genetic information, medical condition, citizenship, primary language, and immigration status.

California Civil Code §54-55.1

These sections of the civil code provide further protections to disabled persons in the State of California.


California Fair Employment and Housing Act (FEHA)

The California Fair Employment and Housing Act covers similar unlawful discriminatory practices and protected classes as the federal Fair Housing Act and the Unruh Civil Rights Act.

Department of Real Estate Commissioner’s Regulations

Regulation 2780 prohibits discriminatory conduct by a real estate licensee on the basis of race, color, sex, religion, ancestry, physical handicap, marital status, or national origin.

FEDERAL FAIR HOUSING LAWS

FAIR HOUSING ACTHUD has played a lead role in administering the Fair Housing Act since its adoption in 1968. The 1988 amendments, however, have greatly increased the Department’s enforcement role. First, the newly protected classes of familial status and persons with disabilities have proven significant sources of new complaints. Second, HUD’s expanded enforcement role took the Department beyond investigation and conciliation into the area of mandatory enforcement.

Complaints filed with HUD are investigated by the Office of Fair Housing and Equal Opportunity (FHEO). If the complaint is not successfully conciliated, FHEO determines whether reasonable cause exists to believe that a discriminatory housing practice has occurred. Where reasonable cause is found, the parties to the complaint are notified by HUD’s issuance of a Determination, as well as a Charge of Discrimination, and a hearing is scheduled before a HUD administrative law judge. Either party - complainant or respondent - may cause the HUD-scheduled administrative proceeding to be terminated by electing instead to have the matter litigated in Federal court. Whenever a party has so elected, the Department of Justice takes over HUD’s role as counsel seeking resolution of the charge on behalf of aggrieved persons, and the matter proceeds as a civil action. Either form of action - the ALJ (Administrative Law Judge) proceeding or the civil action in Federal court - is subject to review in the U.S. Court of Appeals.

Significant Federal Updates

1. The 1988 amendments expanded the protected classes to include families with children (familial status) and persons with disabilities. The amendments also established an administrative enforcement mechanism, which gave HUD widely expanded powers to seek out violations of the Act and enforce compliance.

2. The Housing for Older Persons Act of 1995 (HOPA) makes several changes to the 55 and


older exemption. Since the 1988 Amendments, the Fair Housing Act has exempted from its familial status provisions properties that satisfy the Act’s 55 and older housing condition. First, it eliminates the requirement that 55 and older housing have significant facilities and services designed for the elderly. Second, HOPA establishes a good faith reliance immunity from damages for persons who in good faith believe that the 55 and older exemption applies to a particular property, if they do not actually know that the property is not eligible for the exemption and if the property has formally stated in writing that it qualifies for the exemption.

HOPA retains the requirement that senior housing must have one person who is 55 years of age or older living in at least 80 percent of its occupied units. It also still requires that senior housing publish and follow policies and procedures that demonstrate an intent to be housing for persons 55 and older.

An exempt property will not violate the Fair Housing Act if it includes families with children, but it does not have to do so. Of course, the property must meet the Act’s requirements that at least 80 percent of its occupied units have at least one occupant who is 55 or older, and that it publish and follow policies and procedures that demonstrate an intent to be 55 and older housing.

A Department of Housing and Urban Development rule published in the April 2, 1999, Federal Register implements the Housing for Older Persons Act of 1995, and explains in detail those provisions of the Fair Housing Act that pertain to senior housing.

3. Changes were made to enhance law enforcement, including making amendments to criminal penalties in section 901 of the Civil Rights Act of 1968 for violating the Fair Housing Act.

4. Changes were made to provide incentives for self-testing by lenders for discrimination under the Fair Housing Act and the Equal Credit Opportunity Act. See Title II, subtitle D of the Omnibus Consolidated Appropriations Act, 1997, P.L. 104 - 208 (9/30/96)

5. On April 4th, 2015, HUD’s Office of General Counsel issued guidance concerning how the Fair Housing Act applies to the use of criminal history by providers or operators of housing and real-estate related transactions (covered later in the course).

What Housing Is Covered?

The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with no more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members.

What Is Prohibited?

In the sale and rental of housing, no one may take any of the following actions based on race, color,


national origin, religion, sex, familial status or handicap:

• Refuse to rent or sell housing

• Refuse to negotiate for housing

• Make housing unavailable

• Deny a dwelling

• Set different terms, conditions or privileges for sale or rental of a dwelling

• Provide different housing services or facilities

• Falsely deny that housing is available for inspection, sale, or rental

• For profit, persuade owners to sell or rent (blockbusting) or

• Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing

In mortgage lending, no one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability):

• Refuse to make a mortgage loan

• Refuse to provide information regarding loans

• Impose different terms or conditions on a loan, such as different interest rates, points, or fees

• Discriminate in appraising property

• Refuse to purchase a loan or

• Set different terms or conditions for purchasing a loan

In addition, it is illegal for anyone to:

• Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right

• Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act.


Additional Protection if You Have a Disability

If you or someone associated with you:

• Have a physical or mental disability (including hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex and mental retardation) that substantially limits one or more major life activities

• Have a record of such a disability or

• Are regarded as having such a disability

Your landlord may not:

• Refuse to let you make reasonable modifications to your dwelling or common use areas, at your expense, if necessary for the disabled person to use the housing. (Where reasonable, the landlord may permit changes only if you agree to restore the property to its original condition when you move.)

• Refuse to make reasonable accommodations in rules, policies, practices or services if necessary for the disabled person to use the housing

Example: A building with a no pets policy must allow a visually impaired tenant to keep a guide dog.

Example: An apartment complex that offers tenants ample, unassigned parking must honor a request from a mobility-impaired tenant for a reserved space near her apartment if necessary to assure that she can have access to her apartment. However, housing need not be made available to a person who is a direct threat to the health or safety of others or who currently uses illegal drugs.

Requirements for New Buildings

In buildings that are ready for first occupancy after March 13, 1991, and have an elevator and four or more units:

» Public and common areas must be accessible to persons with disabilities

» Doors and hallways must be wide enough for wheelchairs

» All units must have:

• An accessible route into and through the unit

• Accessible light switches, electrical outlets, thermostats and other environmental controls

• Reinforced bathroom walls to allow later installation of grab bars and

• Kitchens and bathrooms that can be used by people in wheelchairs


If a building with four or more units has no elevator and will be ready for first occupancy after March 13, 1991, these standards apply to ground floor units.

These requirements for new buildings do not replace any more stringent standards in State or local law.

Housing Opportunities for Families

Unless a building or community qualifies as housing for older persons, it may not discriminate based on familial status. That is, it may not discriminate against families in which one or more children under 18 live with:

• A parent

• A person who has legal custody of the child or children or

• The designee of the parent or legal custodian, with the parent or custodian’s written permission

Familial status protection also applies to pregnant women and anyone securing legal custody of a child under 18.

Exemption: Housing for older persons is exempt from the prohibition against familial status discrimination if:

• The HUD Secretary has determined that it is specifically designed for and occupied by elderly persons under a Federal, State or local government program or

• It is occupied solely by persons who are 62 or older or

• It houses at least one person who is 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates an intent to house persons who are 55 or older

A transition period permits residents on or before September 13, 1988, to continue living in the housing, regardless of their age, without interfering with the exemption.

CIVIL RIGHTS ACT OF 1966 AND 1970, 42 U.S.C §1981, 1982These laws provide protection to those who have been denied property rights on the basis of race. The laws cover the right to make and enforce contracts as well as equal protection under the law. Section 1981 states that:

All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.


The term ‘‘make and enforce contracts’’ includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.

Section 1982 goes on to state:

All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.

Compared to the federal Fair Housing Act, these two statutes focus more directly on the rights of entering into legal contracts and owning property regardless of race.

AMERICANS WITH DISABILITIES ACTThe Americans with Disabilities Act (ADA) was passed in 1990 and prohibits discrimination on the basis of disability in employment, State and local government, public accommodations, commercial facilities, transportation, and telecommunications. The ADA potentially affects real estate licensees in a variety of ways.

As a potential employer/business owner, licensees may be affected by Title I of the Act, which deals with employment. The specific regulations vary depending on the number of employees in the business, but the Act essentially requires employers to provide qualified individuals with disabilities, or who have family members with disabilities, an equal opportunity for employment as well as to benefit from the full-range of employee-related opportunities available to others.

Title III of the ADA relates to public accommodations and commercial facilities. This section of the Act affects licensees in that the real estate office itself must comply with these regulations, and in that they must be aware of potential ADA non-compliance for property transactions they are involved in.

Public accommodations must comply with basic nondiscrimination requirements that prohibit exclusion, segregation, and unequal treatment. They must also comply with specific requirements related to architectural standards for new and altered buildings; reasonable modifications to policies, practices, and procedures; effective communication with people with hearing, vision, or speech disabilities; and other access requirements. Additionally, public accommodations must remove barriers in existing buildings where it is easy to do so without much difficulty or expense, given the public accommodation’s resources.

Property compliance with ADA regulations should be covered when evaluating a building that you are either listing or showing to a prospective buyer.


CALIFORNIA FAIR HOUSING LAWS AND REGULATIONS

UNRUH CIVIL RIGHTS ACTThe Unruh Civil Rights Act provides protection from discrimination by all business establishments in California, including housing and public accommodations. California

Civil Code describes the protections found under the Act:

All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.

The protected classes under the Unruh Act are more comprehensive than those of the federal Fair Housing Act, including sexual orientation, gender identity, genetic information, medical condition, citizenship, primary language, and immigration status. Protections under the Unruh Act, however, are not necessarily restricted to these classes. The Act is meant to cover all arbitrary and intentional discrimination by a business establishment on the basis of personal characteristics similar to those listed above.

The Unruh Civil Rights Act can be enforced against any owner, lessor, sublessor, assignor, managing agent, real estate broker, salesperson, or any person having any legal or equitable right of ownership or possession or the right to rent a housing accommodation. This includes property management companies and homeowners’ associations as well.

The Unruh Act covers any form of housing that can be termed a “business establishment.” This term has been liberally interpreted by the courts to include virtually every type of housing accommodation. The Act has been held to apply to operators of motels/hotels, real estate brokers and agents engaged in the sale or rental of real property, and owners of non-owner occupied single-family dwellings among others.

An important exemption to the Unruh Act exists for senior citizen housing. The exemption allows qualifying senior citizen communities to establish minimum age requirements of residents. As long as at least one “qualifying resident” resides, or did reside, in the development there are various exceptions that allow for younger cohabitants, spouses, and disabled, ill, or injured children. For more detail on qualifying residents and cohabitants see California Civil Code Section 51.3.

Penalties for violations of the Unruh Civil Rights Act include: forced sale or rental of the accommodation if it is still available, a civil fine of up to $10,000 for first time offenders or up to $50,000 for repeat offenders, payment of any actual damages, and/or suspension of real estate license (license status is decided by Dept. of Real Estate).


CALIFORNIA CIVIL CODE §54-55.1California Civil Code Section 54 provides further protections to disabled persons in the State of California. Related to housing, the code provides that:

Individuals with disabilities be entitled to full and equal access, as other members of the general public, to all housing accommodations offered for rent, lease, or compensation in the state.

Additionally, any person renting, leasing, or otherwise providing real property for compensation shall not refuse to permit an individual with a disability, at that person’s expense, to make reasonable modifications of the existing rented premises if the modifications are necessary to afford the person full enjoyment of the premises. However, any modifications under this paragraph may be conditioned on the disabled tenant entering into an agreement to restore the interior of the premises to the condition existing prior to the modifications. No additional security may be required on account of an election to make modifications to the rented premises under this paragraph, but the lessor and tenant may negotiate, as part of the agreement to restore the premises, a provision requiring the disabled tenant to pay an amount into an escrow account, not to exceed a reasonable estimate of the cost of restoring the premises.

Any person renting, leasing, or otherwise providing real property for compensation also shall not refuse to make reasonable accommodations in rules, policies, practices, or services, when those accommodations may be necessary to afford individuals with a disability equal opportunity to use and enjoy the premises.

CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT (FEHA)The California Fair Employment and Housing Act covers similar unlawful discriminatory practices and protected classes as the Unruh Civil Rights Act discussed earlier. Under the FEHA it is unlawful:

» For the owner of any housing accommodation to discriminate against or harass any person because of the race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information of that person.

» For the owner of any housing accommodation to make or to cause to be made any written or oral inquiry concerning the race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, disability, or genetic information of any person seeking to purchase, rent, or lease any housing accommodation.

» For any person to make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a housing accommodation that indicates any preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information or an intention to make that preference, limitation, or discrimination.


» For any person subject to the provisions of Section 51 of the Civil Code, as that section applies to housing accommodations, to discriminate against any person on the basis of sex, gender, gender identity, gender expression, sexual orientation, color, race, religion, ancestry, national origin, familial status, marital status, disability, genetic information, source of income, or on any other basis prohibited by that section. Selection preferences based on age, imposed in connection with a federally approved housing program, do not constitute age discrimination in housing.

» For any person, bank, mortgage company or other financial institution that provides financial assistance for the purchase, organization, or construction of any housing accommodation to discriminate against any person or group of persons because of the race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information in the terms, conditions, or privileges relating to the obtaining or use of that financial assistance.

» For any owner of housing accommodations to harass, evict, or otherwise discriminate against any person in the sale or rental of housing accommodations when the owner’s dominant purpose is retaliation against a person who has opposed practices unlawful under this section, informed law enforcement agencies of practices believed unlawful under this section, has testified or assisted in any proceeding under this part, or has aided or encouraged a person to exercise or enjoy the rights secured by this part. Nothing herein is intended to cause or permit the delay of an unlawful detainer action.

» For any person to aid, abet, incite, compel, or coerce the doing of any of the acts or practices declared unlawful in this section, or to attempt to do so.

» For any person, for profit, to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, ancestry, disability, genetic information, source of income, familial status, or national origin.

» For any person or other organization or entity whose business involves real estate-related transactions to discriminate against any person in making available a transaction, or in the terms and conditions of a transaction, because of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, source of income, familial status, disability, or genetic information.

» To deny a person access to, or membership or participation in, a multiple listing service, real estate brokerage organization, or other service because of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, ancestry, disability, genetic information, familial status, source of income, or national origin.

» To otherwise make unavailable or deny a dwelling based on discrimination because of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial


status, source of income, disability, genetic information, or national origin.

The provisions of the FEHA are generally applicable to any real property that is occupied or intended to be occupied as a home, residence, or sleeping place by one or more families. Only two categories of housing are expressly exempted. First, the FEHA does not apply to renting a portion of a single-family, owner-occupied house to one person. Second, religious organizations which own or operate housing accommodations for non-commercial purposes, either directly or through a related non-profit institution or organization, may give a preference to persons of the same religion in the sale, rental, or occupancy of such accommodations.

Any person who believes they have been discriminated against in violation of the Fair Employment and Housing Act may seek remedy through filing a complaint with the Department of Fair Employment and Housing (DFEH) or bringing a private lawsuit against the offender. Complaints filed with DFEH be must made within 1 year of when the alleged violation occurred or terminated and private actions must be initiated within 2 years of the violation.

Penalties for violating the FEHA include the sale or rental of the housing accommodation if it is still available; the provision of financial assistance, terms, conditions, or privileges previously denied; injunctive or other equitable relief; civil penalties of up to $10,000 for first-time offenders or $65,000 for repeat offenders; as well as the payment of actual damages to the complainant.

DEPARTMENT OF REAL ESTATE COMMISSIONER’S REGULATIONSIn addition to the various State and Federal laws regarding discrimination in housing, California real estate licensees are also subject to the regulations of the California Department of Real Estate Commissioner. Regulation 2780 prohibits discriminatory conduct by a real estate licensee on the basis of race, color, sex, religion, ancestry, physical handicap, marital status, or national origin. Prohibited conduct includes, but is not limited to, the following:

» Refusing to negotiate for the sale, rental or financing of the purchase of real property or otherwise making unavailable or denying real property to any person because of such person’s race, color, sex, religion, ancestry, physical handicap, marital status or national origin.

» Refusing or failing to show, rent, sell or finance the purchase of real property to any person or refusing or failing to provide or volunteer information to any person about real property, or channeling or steering any person away from real property, because of that person’s race, color, sex, religion, ancestry, physical handicap, marital status or national origin or because of the racial, religious, or ethnic composition of any occupants of the area in which the real property is located.

» Discriminating because of race, color, sex, religion, ancestry, physical handicap, marital status or national origin against any person in the terms, conditions or privileges of sale, rental or financing of the purchase of real property.


» Discriminating because of race, color, sex, religion, ancestry, physical handicap, marital status or national origin against any person in providing services or facilities in connection with the sale, rental or financing of the purchase of real property, including but not limited to: processing applications differently, referring prospects to other licensees because of the prospects’ race, color, sex, religion, ancestry, physical handicap, marital status or national origin, using with discriminatory intent or effect, codes or other means of identifying minority prospects, or assigning real estate licensees on the basis of a prospective client’s race, color, sex, religion, ancestry, physical handicap, marital status or national origin.

» Representing to any person because of his or her race, color, sex, religion, ancestry, physical handicap, marital status or national origin that real property is not available for inspection, sale or rental when such real property is in fact available.

» Processing an application more slowly or otherwise acting to delay, hinder or avoid the sale, rental or financing of the purchase of real property on account of the race, color, sex, religion, ancestry, physical handicap, marital status or national origin of a potential owner or occupant.

» Making any effort to encourage discrimination against persons because of their race, color, sex, religion, ancestry, physical handicap, marital status or national origin in the showing, sale, lease or financing of the purchase of real property.

» Refusing or failing to cooperate with or refusing or failing to assist another real estate licensee in negotiating the sale, rental or financing of the purchase of real property because of the race, color, sex, religion, ancestry, physical handicap, marital status or national origin of any prospective purchaser or tenant.

» Making any effort to obstruct, retard or discourage the purchase, lease or financing of the purchase of real property by persons whose race, color, sex, religion, ancestry, physical handicap, marital status or national origin differs from that of the majority of persons presently residing in a structural improvement to real property or in an area in which the real property is located.

» Performing any acts, making any notation, asking any questions or making or circulating any written or oral statement which when taken in context, expresses or implies a limitation, preference or discrimination based upon race, color, sex, religion, ancestry, physical handicap, marital status or national origin; provided, however, that nothing herein shall limit the administering of forms or the making of a notation required by a federal, state or local agency for data collection or civil rights enforcement purposes; or in the case of a physically handicapped person, making notation, asking questions or circulating any written or oral statement in order to serve the needs of such a person.

» Making any effort to coerce, intimidate, threaten or interfere with any person in the exercise or enjoyment of any right granted or protected by a federal or state law, including but not limited to: assisting in any effort to coerce any person because of his or her race, color, sex, religion, ancestry, physical handicap, marital status or national origin to move from, or to not


move into, a particular area; punishing or penalizing real estate licensees for their refusal to discriminate in the sale or rental of housing because of the race, color, sex, religion, ancestry, physical handicap, marital status or national origin of a prospective purchaser or lessee; or evicting or taking other retaliatory action against any person for having filed a fair housing complaint or for having undertaken other lawful efforts to promote fair housing.

» (Soliciting of sales, rentals or listings of real estate from any person, but not from another person within the same area because of differences in the race, color, sex, religion, ancestry, physical handicap, marital status or national origin of such persons.

» Making any effort to discourage or prevent any person from renting, purchasing or financing the purchase of real property through any representations of actual or alleged community opposition based upon race, color, sex, religion, ancestry, physical handicap, marital status or national origin.

» Providing information or advice to any person concerning the desirability of particular real property or a particular residential area(s) which is different from information or advice given to any other person with respect to the same property or area because of differences in the race, color, sex, religion, ancestry, physical handicap, marital status or national origin of such persons.

» Refusing to accept a rental or sales listing or application for financing of the purchase of real property because of the owner’s race, color, sex, religion, ancestry, physical handicap, marital status or national origin or because of the race, color, sex, religion, ancestry, physical handicap, marital status or national origin of any of the occupants in the area in which the real property is located.

» Making, printing or publishing, or causing to be made, printed or published, any notice, statement or advertisement concerning the sale, rental or financing of the purchase of real property that indicates any preference, limitation or discrimination because of race, color, sex, religion, ancestry, physical handicap, marital status or national origin, or any intention to make such preference, limitation or discrimination.

» Quoting or charging a price, rent or cleaning or security deposit for a particular real property to any person which is different from the price, rent or security deposit quoted or charged to any other person because of differences in the race, color, sex, religion, ancestry, physical handicap, marital status or national origin of such persons.

» Discriminating against any person because of race, color, sex, religion, ancestry, physical handicap, marital status or national origin in performing any acts in connection with the making of any determination of financial ability or in the processing of any application for the financing or refinancing of real property.

» Advising a person of the price or value of real property on the basis of factors related to the race, color, sex, religion, ancestry, physical handicap, marital status or national origin of residents of an area or of residents or potential residents of the area in which the property is


located.

» Discriminating in the treatment of, or services provided to, occupants of any real property in the course of providing management services for the real property because of the race, color, sex, religion, ancestry, physical handicap, marital status or national origin of said occupants.

» Establishing or implementing rules that have the effect of limiting the opportunity for any person because of his or her race, color, sex, religion, ancestry, physical handicap, marital status or national origin to secure real property through a multiple listing or other real estate service.

17 • Chapter 1: Review Questions

CHAPTER 1: TEST YOUR KNOWLEDGE

The following questions are included as an additional tool to enhance your learning experience and do not need to be submitted in order to receive credit.

We recommend that you answer each question and then compare your response to the suggested solutions on the following page(s) before taking the final exam.

1. The 1988 amendments to the federal Fair Housing Act added which of the following as a protected class:

A. age

B. familial status

C. education level

D. income

2. Which of the following allows a disabled tenant to make reasonable modifications to the rented property at the tenants own expense:

A. Fair Housing Act

B. Civil Rights Act of 1966

C. California Civil Code §54-55.1

D. California Fair Employment and Housing Act


CHAPTER 1: SOLUTIONS AND SUGGESTED RESPONSES

Below are the solutions and suggested responses for the questions on the previous page(s). If you chose an incorrect answer, you can review the page(s) as indicated for more information.

1. B. familial status

See page 4

2. C. California Civil Code §54-55.1

See page 11

19 • Chapter 2: Fair Lending Laws

CHAPTER 2: FAIR LENDING LAWS

EQUAL CREDIT OPPORTUNITY ACT

People use credit to pay for education or a house, a remodeling job or a car, or to finance a loan to keep their business operating. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Equal Credit Opportunity Act (ECOA), which prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because you get public assistance. Creditors may ask you for most of this information in certain situations, but they may not use it when deciding whether to give you credit or when setting the terms of your credit. Not everyone who applies for credit gets it or gets the same terms: Factors like income, expenses, debts, and credit history are among the considerations lenders use to determine your creditworthiness.

The law provides protections when you deal with any organizations or people who regularly extend credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Everyone who participates in the decision to grant credit or in setting the terms of that credit, including real estate brokers who arrange financing, must comply with the ECOA. Here’s a brief summary of the basic provisions of the ECOA.

When You Apply For Credit, Creditors May Not...

» Discourage you from applying or reject your application because of your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.

» Consider your race, sex, or national origin, although you may be asked to disclose this information if you want to. It helps federal agencies enforce anti-discrimination laws. A creditor may consider your immigration status and whether you have the right to stay in the country long enough to repay the debt.

» Impose different terms or conditions, like a higher interest rate or higher fees, on a loan based on your race, color, religion, national origin, sex, marital status, age, or because you receive public assistance.

» Ask if you’re widowed or divorced. A creditor may use only the terms: married, unmarried, or separated.

» Ask about your marital status if you’re applying for a separate, unsecured account. A creditor may ask you to provide this information if you live in “community property” states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A creditor in any state may ask for this information if you apply for a joint account or one


secured by property.

» Ask for information about your spouse, except:

• if your spouse is applying with you;

• if your spouse will be allowed to use the account;

• if you are relying on your spouse’s income or on alimony or child support income from a former spouse;

• if you live in a community property state.

» Ask about your plans for having or raising children, but they can ask questions about expenses related to your dependents.

» Ask if you get alimony, child support, or separate maintenance payments, unless they tell you first that you don’t have to provide this information if you aren’t relying on these payments to get credit. A creditor may ask if you have to pay alimony, child support, or separate maintenance payments.

When Deciding To Grant You Credit Or When Setting The Terms Of Credit, Creditors May Not...

» Consider your race, color, religion, national origin, sex, marital status or whether you get public assistance.

» Consider your age, unless:

• you’re too young to sign contracts, generally under 18;

• you’re at least 62, and the creditor will favor you because of your age;

• it’s used to determine the meaning of other factors important to creditworthiness. For example, a creditor could use your age to determine if your income might drop because you’re about to retire;

• it’s used in a valid credit scoring system that favors applicants 62 and older. A credit scoring system assigns points to answers you give on credit applications. For example, your length of employment might be scored differently depending on your age.

» Consider whether you have a telephone account in your name. A creditor may consider whether you have a phone.

» Consider the racial composition of the neighborhood where you want to buy, refinance or improve a house with money you are borrowing.


When Evaluating Your Income, Creditors May Not...

» Refuse to consider reliable public assistance income the same way as other income.

» Discount income because of your sex or marital status. For example, a creditor cannot count a man’s salary at 100 percent and a woman’s at 75 percent. A creditor may not assume a woman of childbearing age will stop working to raise children.

» Discount or refuse to consider income because it comes from part-time employment, Social Security, pensions, or annuities.

» Refuse to consider reliable alimony, child support, or separate maintenance payments. A creditor may ask you for proof that you receive this income consistently.

You Also Have The Right To...

» Have credit in your birth name (Mary Smith), your first and your spouse’s last name (Mary Jones), or your first name and a combined last name (Mary Smith Jones).

» Get credit without a cosigner, if you meet the creditor’s standards.

» Have a cosigner other than your spouse, if one is necessary.

» Keep your own accounts after you change your name, marital status, reach a certain age, or retire, unless the creditor has evidence that you’re not willing or able to pay.

» Know whether your application was accepted or rejected within 30 days of filing a complete application.

» Know why your application was rejected. The creditor must tell you the specific reason for the rejection or that you are entitled to learn the reason if you ask within 60 days. An acceptable reason might be: “your income was too low” or “you haven’t been employed long enough.” An unacceptable reason might be “you didn’t meet our minimum standards.” That information isn’t specific enough.

» Learn the specific reason you were offered less favorable terms than you applied for, but only if you reject these terms. For example, if the lender offers you a smaller loan or a higher interest rate, and you don’t accept the offer, you have the right to know why those terms were offered.

» Find out why your account was closed or why the terms of the account were made less favorable, unless the account was inactive or you failed to make payments as agreed.

A Special Note To Women

A good credit history — a record of your bill payments — often is necessary to get credit. This can hurt


many married, separated, divorced, and widowed women.

Typically, there are two reasons women don’t have credit histories in their own names: either they lost their credit histories when they married and changed their names, or creditors reported accounts shared by married couples in the husband’s name only.

If you’re married, separated, divorced, or widowed, contact your local credit reporting companies to make sure all relevant bill payment information is in a file under your own name. Your credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested or filed for bankruptcy. National credit reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that, in turn, use it to evaluate your applications for credit, insurance, employment, or renting a home.

The Fair Credit Reporting Act (FCRA) requires each of the three nationwide credit reporting companies — Equifax, Experian, and TransUnion — to give you a free copy of your credit report, at your request, once every 12 months.

THE HOUSING FINANCIAL DISCRIMINATION ACT OF 1977 - FAIR LENDING NOTICE

California legislation prohibiting state financial institutions from engaging in the practice of redlining (refusing to make loans due to the location of a property) became effective January 1, 1978. The Housing Financial Discrimination Act of 1977 or the Holden Act, makes it illegal to discriminate in the provision of or in the availability of financial assistance because of the consideration of:

1. Trends, characteristics or conditions in the neighborhood or geographic area surrounding a housing accommodation, unless the financial institution can demonstrate in the particular case that such consideration is required to avoid an unsafe and unsound business practice; or

2. Race, color, religion, sex, marital status, domestic partnership, national origin or ancestry.

It is illegal to consider the racial, ethnic, religious or national origin composition of a neighborhood or geographic area surrounding a housing accommodation or whether or not such composition is undergoing change, or is expected to undergo change, in appraising a housing accommodation or in determining whether or not, or under what terms and conditions, to provide financial assistance.

These provisions govern financial assistance for the purpose of the purchase, construction, rehabilitation or refinancing of one- to four-unit family residences occupied by the owner and for the purpose of the home improvement of any one- to four-unit family residence.

The ultimate responsibility for monitoring compliance with the Act resides in the Secretary of Business, Transportation, and Housing. Additionally, the Secretary of Business, Transportation, and Housing or the


Secretary’s designee is required to collect data compiled by various regulated lenders relating to their lending practices. This lending data is required to be submitted annually in each census tract within a metropolitan statistical area.

Complaint Resolution

The Act establishes a special three-step complaint resolution procedure available to any such applicant:

» First, an applicant may file a complaint with the Secretary of Business, Transportation, and Housing or the designee (depending on the lenders) who ha 30 days in which to resolve the complaint. If the Secretary or the designee finds a violation of this statute, he or she is empowered to order either: (a) the making of the loan or improving the terms of the loan, or (b) the payment of actual damages to the complainant of up to $1,000.

» The second step allows for an appeal of the Secretary’s or designee’s decision to the Office of Administrative Hearings. This is available to either the complainant or the financial institution.

» Finally, judicial review of the decision of the Office of Administrative Hearings may be obtained by either party filing a petition for Writ of Mandate.

The law also requires the financial institution to notify all such applicants at the time of written application for financial assistance of the prohibitions and right of review provided in the law. Such notice must also include the address of the Secretary and where complaints may be filed and questions asked.

HOME MORTGAGE DISCLOSURE ACT (HMDA)

The Home Mortgage Disclosure Act (HMDA) was enacted by Congress in 1975 and was implemented by the Federal Reserve Board’s Regulation C. This regulation provides the public loan data that can be used to assist:

» in determining whether financial institutions are serving the housing needs of their communities

» public officials in distributing public-sector investments so as to attract private investment to areas where it is needed

» and in identifying possible discriminatory lending patterns

This regulation applies to certain financial institutions, including banks, savings associations, credit unions, and other mortgage lending institutions.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) transferred HMDA rulemaking authority to the Consumer Financial Protection Bureau (CFPB). It also


affected HMDA supervisory and enforcement authority of the Board of Governors of the Federal Reserve System (FRS), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the National Credit Union Administration (NCUA), and the Department of Housing and Urban Development (HUD)

The Dodd-Frank Act also transferred OTS’s functions on July 21, 2011. While most of its functions were transferred to the OCC, certain other authorities of the OTS were transferred to the FDIC, the FRS, and the CFPB.

The appropriate Federal Agencies for HMDA Reporting and Compliance questions are:

» CFPB for very large banks, thrifts, credit unions (those with over $10 billion in assets) and their affiliates (including affiliates that are themselves banks, thrifts, or credit unions regardless of asset size and subsidiaries of such affiliates).

» FRS for any of the following that are not being handled by the CFPB as indicated above: state member banks of the Federal Reserve System, their subsidiaries, subsidiaries of bank holding companies, branches and agencies of foreign banks (other than federal branches, federal agencies and insured state branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act, and as a result of the Dodd-Frank Act changes, subsidiaries of savings and loan holding companies.

» FDIC for any of the following that are not being handled by the CFPB as indicated above: nonmember insured banks (except for federal savings banks) and their subsidiaries, insured state branches of foreign banks that are supervised by the FDIC, certain other depository institutions, and as a result of the Dodd-Frank changes, state-chartered savings associations and their subsidiaries.

» OCC for any of the following that are not being handled by the CFPB as indicated above: national banks and their subsidiaries, federal branches and federal agencies of foreign banks, and as a result of the Dodd-Frank Act changes, federal savings associations and their subsidiaries.

» NCUA for credit unions that are not being handled by the CFPB as indicated above.

» HUD for other lending institutions that are not being handled by the CFPB or another agency as indicated above.

25 • Chapter 2: Review Qestions




1. Which of the following actions by a creditor is a violation of the Equal Credit Opportunity Act:

A. imposing a higher interest rate on a loan based on your marital status

B. discouraging you from applying for credit because you receive public assistance

C. asking about your plans for having children

D. all of the above

26 • Chapter 2: Review Qestions



1. D. all of the above

See page 19

27 • Chapter 3: Special Topics

CHAPTER 3: SPECIAL TOPICS

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)

Purpose

It is HUD’s mission to promote non-discrimination and ensure fair and equal housing opportunities for all. In an ongoing effort to provide services and activities on a nondiscriminatory manner and to affirmatively further fair housing, HUD is charged by law to implement and enforce a wide array of civil rights laws, not only for members of the public in search of fair housing, but for HUD funded grant recipients as well. HUD is also charged with ensuring the successful operation of specific enforcement of housing programs. The array of laws, executive orders, regulations, etc. are collectively known as civil rights requirements and called “Civil Rights Related Program Requirements (CRRPRs).”

Non-discrimination

HUD-funded grant recipients are obligated under various laws not to discriminate in housing or services directly or indirectly on the basis of race, color, religion, sex, national origin, age, familial status, or disability. HUD rules further require that recipients of Federal financial assistance comply with civil rights-related program requirements (CRRPRs) that affect nearly every aspect of each program. HUD’s non-discrimination requirements are compiled from several different federal laws designed to protect each individual’s right to fair housing and equal opportunity.

Affirmative Strategies

A. Fair Housing Act

A strong commitment to affirmatively further fair housing is not only one of the Department’s guiding principles, it is a requirement for participating in HUD’s many housing and community development programs. The Fair Housing Act specifies that the Secretary of Housing and Urban Development shall administer programs and activities relating to housing and urban development in a manner that affirmatively furthers the policies outlined in section 808 (e) 5. This responsibility is assigned to HUD funded recipients as well, through:

» Consolidated Plan


» Public Housing Agency Plans

» Super Notice of Funding Availability (SuperNOFA)

Some examples of ways to carry out these requirements include:

» Establishing fair housing enforcement organizations in areas where there are no such organizations

» For public housing agencies, strting a counseling program to help housing choice voucher recipients to find housing outside of minority and/or poverty concentrated areas

» Outreach to housing providers in non-minority and poverty concentrated areas;

» Marketing available housing to persons less likely to apply for housing in a metropolitan statistical area

» Encouraging banks and other lending organizations to operate in areas that are underserved and to provide services to underserved populations

» Encouraging banks and other lenders to use non-traditional methods for evaluating credit and loan amount terms, based on cultural differences and other individual factors

B. Housing and Community Development Act of 1974, as amended

The Housing and Community Development Act of 1974, as amended, is the dominant statute for the Community Development Block Grant (CDBG) program. It requires that each federal grantee certify to HUD’s satisfaction that (1) the awarded grant will be carried out and administered according to the Fair Housing Act, and (2) the grantee will work diligently to affirmatively further fair housing. This certification to HUD may be implemented through the Consolidated Plan process.

Under the Consolidated Plan, HUD funded recipients are required to: (1) examine and attempt to alleviate housing discrimination within their jurisdiction; (2) promote fair housing choice for all persons; (3) provide opportunities for all persons to reside in any given housing development, regardless of race, color, religion, sex, disability, familial status, or national origin; (4) promote housing that is accessible to and usable by persons with disabilities; (5) and comply with the non-discrimination requirements of the Fair Housing Act.

HUD encourages jurisdictions to consult with one another and initiate metropolitan wide area fair housing planning. The Fair Housing Planning Guide provides information to State, State funded, and Entitlement jurisdictions on how they may take steps to affirmatively further fair housing. Check out the Fair Housing Planning Guide at https://www.hud.gov/sites/documents/FHPG.PDF to learn more about Affirmatively Furthering Fair Housing.

1. Certification of Affirmatively Furthering Fair Housing

State and Entitlement recipients are required to sign a certification to affirmatively further

https://www.hud.gov/sites/documents/FHPG.PDF


fair housing. As part of the jurisdiction’s Consolidated Plan, these recipients are required to undertake fair housing planning. Fair Housing Planning consists of the following:

• An Analysis of Impediments (AI) to fair housing choice

• Actions to cover the effects of the identified impediments

• Maintenance of records to support the affirmatively furthering fair housing certification.

2. Analysis of Impediments to Fair Housing Choice

Analysis of Impediments (AI) is a review of impediments or barriers that affect the rights of fair housing choice. It covers public and private policies, practices, and procedures affecting housing choice. Impediments to fair housing choice are defined as any actions, omissions, or decisions that restrict, or have the effect of restricting, the availability of housing choices, based on race, color, religion, sex, disability, familial status, or national origin. The AI serves as the basis for fair housing planning, provides essential information to policy makers, administrative staff, housing providers, lenders, and fair housing advocates, and assists in building public support for fair housing efforts. Conducting an analysis of impediments is a required component of certification and involves the following:

• An extensive review of a State or Entitlement jurisdiction’s laws, regulations, and administrative policies, procedures, and practices

• An assessment of how those laws affect the location, availability, and accessibility of housing

• An evaluation of conditions, both public and private, affecting fair housing choice for all protected classes

• An assessment of the availability of affordable, accessible housing in a range of unit sizes

The Analysis of Impediments Memorandum gives guidance to HUD field offices regarding the requirements of the Consolidated Plan to prepare an Analysis of Impediments to Fair Housing Choice.

C. The Quality Housing and Work Responsibility Act of 1998 (QHWRA)

The Quality Housing and Work Responsibility Act of 1998 applies to public housing and public housing agency-administered (PHA) Housing Choice Voucher programs. The purpose of the QHWRA is to:

1. Deregulate public housing agencies

2. Provide more flexible use of Federal assistance to PHAs

3. Open the door to mixed income communities


4. Decrease concentrations of poverty in public housing

5. Increase accountability and reward effective management of PHAs

6. Create incentives and economic opportunities for residents assisted by PHAs to work andbecome self-sufficient

7. Join the Section 8 voucher and certificate programs into a single program

8. Remedy the problems of troubled PHAs

9. Replace or revitalize severely distressed public housing projects.

PHAs must certify to the affirmatively furthering fair housing requirements in their annual public housing agency plans (PHAPs). PHAs may conduct their own AIs or ensure their annual PHAPs are consistent with the applicable jurisdiction’s Consolidated Plan and AIs.

Under 24 CFR 903.2(d)(1) and (2), PHAs must enforce their tenant selection and assignment plans in a nondiscriminatory manner and must take affirmative steps to reduce “racial and national origin concentrations.”

According to 24 CFR 903.7(o), the civil rights certification says that the PHA must also certify that it will affirmatively further fair housing. This compliance is achieved by fulfilling the requirements of Sec. 903.2(b):

1. Examines its programs or proposed programs

2. Identifies any impediments to fair housing choice within those programs

3. Addresses those impediments in a reasonable fashion in view of the resources available

4. Works with local jurisdictions to implement any of the jurisdiction’s initiatives to affirmativelyfurther fair housing that require PHA involvement

5. Maintains records reflecting these analyses and actions.

D. Super Notice of Funding Availability (SuperNOFA)

HUD has developed requirements for the Department’s annual Super Notice of Funding Availability to ensure that HUD and HUD-funded recipients work against discrimination, and toward affirmatively furthering fair housing.

HUD’s SuperNOFA specifies the amount of funds available and the requirements for each grant within programs operated and administered by HUD. The General Section of the

SuperNOFA provides application procedures and requirements relevant to all programs in the SuperNOFA. Applicants applying for HUD funding must affirmatively further fair housing, as well as meet required civil rights threshold requirements found in the general section of the SuperNOFA.


EQUAL ACCESS FOR LGBT PERSONS

The federal Fair Housing Act prohibits housing discrimination based on race, color, national origin, religion, sex, disability, and familial status (i.e., presence of children in the household). The Fair Housing Act does not specifically include sexual orientation and gender identity as prohibited bases. However, a lesbian, gay, bisexual, or transgender (LGBT) person’s experience with sexual orientation or gender identity housing discrimination may still be covered by the Fair Housing Act. In addition, housing providers that receive HUD funding, have loans insured by the Federal Housing Administration (FHA), as well as lenders insured by FHA, may be subject to HUD program regulations intended to ensure equal access of LGBT persons.

Examples:

• A property manager refuses to rent an apartment to a prospective tenant who is transgender. If the housing denial is because of the prospective tenant’s non-conformity with gender stereotypes, it may constitute illegal discrimination on the basis of sex under the Fair Housing Act.

• An underwriter for an FHA insured loan is reviewing an application where two male incomes are being used as the basis for the applicants’ credit worthiness. The underwriter assumes the applicants are a gay couple and, as a result, denies the application despite the applicants’ glowing credentials. This scenario may violate HUD regulations which prohibit FHA-insured lenders from taking actual or perceived sexual orientation into consideration in determining adequacy of an applicant’s income.

HUD LGBT FINAL RULE OF 2012Through this final rule, HUD implemented policy to ensure that its core programs are open to all eligible individuals and families regardless of sexual orientation, gender identity, or marital status. This rule followed a January 24, 2011, proposed rule, which noted evidence suggesting that lesbian, gay, bisexual, and transgender (LGBT) individuals and families are being arbitrarily excluded from housing opportunities in the private sector. Such information was of special concern to HUD, which, as the Nation’s housing agency, has the unique charge to promote the federal goal of providing decent housing and a suitable living environment for all. It is important not only that HUD ensure that its own programs do not involve discrimination against any individual or family otherwise eligible for HUD-assisted or-insured housing, but that its policies and programs serve as models for equal housing opportunity.

HUD’s regulations requiring equal access to LGBT persons include the following:

• A general equal access provision which requires housing that is funded by HUD or subject to a mortgage insured by the Federal Housing Administration (FHA) to be made available without regard to actual or perceived sexual orientation, gender identity, or marital status.


• Clarification that the terms “family” and “household” as used in HUD programs, include persons, regardless of actual or perceived sexual orientation, gender identity, or marital status.

• Prohibition on owners and operators of HUD funded housing or housing insured by FHA from asking about an applicant’s or occupant’s sexual orientation or gender identity for the purpose of determining eligibility or otherwise making housing available.

• Prohibition on FHA lenders from taking into account actual or perceived sexual orientation or gender identity in determining the adequacy of a potential borrower’s income.

Many state, city, and county laws specifically include sexual orientation and gender identity as prohibited bases, and California is one of those states, so all licensed California Real Estate agents need to make sure they are informed and compliant with any possible LGBT violations. If you have a general question or need information about reporting a violation of HUD program regulations or the Fair Housing Act, you can email [email protected].

RECENT HUD UPDATES ON CRIMINAL HISTORY

On April 4th, 2015, HUD’s Office of General Counsel issued guidance concerning how the Fair Housing Act applies to the use of criminal history by providers or operators of housing and real-estate related transactions. Specifically, the guidance addresses how the discriminatory effects and disparate treatment methods of proof apply in Fair Housing Act cases in which a housing provider justifies an adverse housing action – such as a refusal to rent or renew a lease – based on an individual’s criminal history.

The Fair Housing Act prohibits both intentional housing discrimination and housing practices that have an unjustified discriminatory effect because of race, national origin or other protected characteristics. Because of widespread racial and ethnic disparities in the U.S. criminal justice system, criminal history-based restrictions on access to housing are likely disproportionately to burden African Americans and Hispanics. While the Act does not prohibit housing providers from appropriately considering criminal history information when making housing decisions, arbitrary and overbroad criminal history-related bans are likely to lack a legally sufficient justification. Thus, a discriminatory effect resulting from a policy or practice that denies housing to anyone with a prior arrest or any kind of criminal conviction cannot be justified, and therefore such a practice would violate the Fair Housing Act.

Policies that exclude persons based on criminal history must be tailored to serve the housing provider’s substantial, legitimate, nondiscriminatory interest and take into consideration such factors as the type of the crime and the length of the time since conviction. Where a policy or practice excludes individuals with only certain types of convictions, a housing provider will still bear the burden of proving that any discriminatory effect caused by such policy or practice is justified. Such a determination must be made on a case-by-case basis.

Selective use of criminal history as a pretext for unequal treatment of individuals based on race, national


origin, or other protected characteristics violates the Act.

In summary, the use of any policy that excludes persons based upon criminal history may be a violation of the Fair Housing Act. When forming a new policy or reviewing a current policy, it is best to consult legal counsel to avoid being in violation, inadvertently or not, of the Fair Housing Act.

VOLUNTARY AFFIRMATIVE MARKETING AGREEMENT (VAMA)

The Voluntary Affirmative Marketing Agreement (VAMA) is a quasi-contractual instrument negotiated between HUD Headquarters and the National Association of Realtors® (NAR) in 1975, and is still in effect today. It is designed to carry out a broad equal opportunity program, including outreach advertising, affirmative employment, safeguards against racial steering, etc.

Introduction

Title VIII of the Civil Rights Act of 1968 established that “It is the policy of the United States, to provide, within constitutional limitations, for fair housing throughout the United States.” In 1974, the scope of Title VIII, which originally prohibited discrimination in housing based on race, color, religion or national origin, was extended, through the Housing and Community Development Act, to include sex. Although “fair housing” is not defined in the act, since 1968 it has become clear that, apart From the statutory prohibition against housing discrimination, “fair housing” at the very least means “equal housing opportunity.” That concept is defined in HUD’s Affirmative Fair Housing Marketing Regulations (40 FR 53008, 11/14/75) as “ ...a condition in which individuals of similar income levels in the same housing market area have a like range of housing choices available to them regardless of their race, color, religion, sex or national origin.” Moreover, all executive departments and agencies are charged by Title VIII to “administer their programs and activities relating to housing and urban development in a manner affirmatively to further the purposes of the Title...”

Authority

Section 809 of Title VIII states: “Immediately after the enactment of this title the Secretary shall commence such educational and conciliatory activities as in his judgment will further the purposes of this title. He shall call conferences of persons in the housing industry and other interested parties to acquaint them with the provisions of this title and his suggested means of implementing it, and shall endeavor with their advice to work out programs of voluntary compliance and enforcement...” Congress recognized, in its inclusion of Section 809, the importance of voluntary action. To effectuate its mandate to work out programs of voluntary compliance, HUD established an Office of Voluntary Compliance (OVC) within the Office of Fair Housing and Equal Opportunity (FHEO). It’s charge,--to extend the range of equal


opportunity activities beyond the area of law enforcement by promoting institutional change designed to secure voluntary compliance with the spirit of the law and its policy of fair housing.

General Features

There are a broad range of activities that may properly be related to voluntary compliance, including conferences, seminars and advertising programs that promote equal treatment in housing and employment. Community planning and funding processes, and HUD research and demonstration projects may be used to promote it. Other Federal agencies and private industry can ensure that equal housing opportunity is a consideration in their business practices and operations. Excellent vehicles for achieving equal housing opportunity are voluntary area-wide affirmative marketing plans and agreements. Properly implemented, they vastly extend the impact of Federal affirmative fair housing policy beyond HUD-assisted housing to the conventional market in major housing areas.

Purpose

Three equal opportunity goals variously animate HUD’s voluntary compliance activities:

1. Expanding housing options for minorities and women by working for a condition in which individuals of similar income levels in the same housing market area have a like range of housing choices available to them.

2. Providing equal treatment in the delivery of HUD program benefits.

3. Expanding jobs, training and business opportunities for minorities and women.

Program Policy

There is a two-fold policy approach to HUD’s voluntary compliance programs:

1. Cooperation and assistance in aiding persons, firms, agencies, and municipalities to comply voluntarily with the provisions of the Federal Fair Housing Law and HUD equal opportunity requirements; and

2. Encouragement of these same parties to exceed the level of formal requirements by affirmatively working for a condition in which all persons are enabled to live where they wish within their economic capability.

In carrying out their program responsibilities, Fair housing and Equal Opportunity and program staff should work cooperatively to correct the effects of past discrimination. Programs developed must contain safeguards to deter future discrimination, and be results oriented so that progress toward the goal of increasing housing opportunities for minorities and women can be evaluated.


Cooperation with Housing Industry Groups and National Business and Professional Organizations

Vitally important components of support for equal housing opportunity are found in the private sector among housing industry groups, and national business and professional organizations. The Office of Voluntary Compliance pursues a variety of programs to enlist

that support, chiefly, area-wide affirmative marketing plans and agreements and national affirmative action programs.

1. Area-wide Plans and Agreements. Voluntary area-wide affirmative marketing plans and agreements commit signatory parties to collective action in support of affirmative marketing programs in specific housing market areas to achieve the goals of equal housing opportunity.

2. National Affirmative Action Programs. National associations and organizations are also encouraged to establish ongoing fair housing programs for their members in order to contribute to the total programmatic effort.

HOUSING AND HOME FINANCE GROUPS THAT SUPPORT VOLUNTARY COMPLIANCE

A. Home Builders

The National Association of Home Builders (NAHB) has over 75,000 members and a local chapter in almost every major metropolitan area--each with an executive officer. Area Office FHEO Division Directors should establish effective liaison with these executive officers in order to implement HUD’s voluntary affirmative marketing agreement with the NAHB, adopted on October 22, 1976.

B. Real Estate Brokers

1. The National Association of Realtors® (NAR) also has an affirmative marketing agreement with HUD. Since its adoption, all 1,600 member boards have been encouraged to endorse and implement the agreement. In addition, the NAR® has revised its code of ethics, incorporating more extensive equal housing opportunity provisions. Pursuant to this code, member boards will not discriminate “in the sale, purchase, exchange, rental or lease of real property,” will not participate in racial steering, panic tactics, or engage in any advertising that “indicates any preference, limitation or discrimination based on race, color, religion, or ethnic background.”

2. Another organization of real estate practitioners is the National Association of Real Estate Brokers® (NAREB). Members of NAREB, known as Realtists®, years ago organized as a black counterpart to what was then the National Association of Real Estate Boards as a result of being barred from joining the latter organization. In the spring of 1976, HUD and NAREB®


adopted a voluntary agreement similar in many respects to HUD’s agreement with the NAR®. An important aspect of voluntary compliance work with real estate brokers is to promote cooperation between Realtors® and Realtists®.

C. Property Managers

Through a series of voluntary plans in various cities, property managers, particularly of apartments, are being brought into the equal opportunity effort. For example, the Minnesota State Apartment Association developed a plan with HUD that covers 375 owners and managers of rental units, and assures that their properties will be leased or rented without regard to race, color, religion, sex or national origin.

D. Mortgage Lenders

The Mortgage Bankers Association of America, working with staff of the Office of Voluntary Compliance, instituted a Fair Loan Availability Guaranty (FLAG) program and a national code of ethics that must be conspicuously displayed in all members’ offices. The code stipulates that mortgages and loans will be provided without regard to race, color, sex, religion or ethnic background of the prospective borrower. The FLAG program affects such other operations as loan applications, verifying loan qualifications, establishing the loan value of collateral ratio, discounting loans, setting fees, and determining the loan’s quality service.

E. Housing Professionals

Groups such as the American Institute of Architects have also joined the fair housing effort. The AIA recently revised its national code of ethics to commit its members not to “undertake housing projects which deny the human rights of any segment of society ...” In addition, various groups of real estate appraisers (the Society of Real Estate Appraisers, American Institute of Real Estate Appraisers, and others) are all developing affirmative action programs.

F. Business Organizations

Several major corporations have signed voluntary compliance agreements with HUD, but most corporations prefer to develop fair housing programs by working with local fair housing groups. OVC developed a “Manual for Corporate Employers” on fair housing which has been widely distributed. A HUD contract was recently awarded to stimulate corporate interest in fair housing in the South and several seminars were conducted in this regard. Office of Voluntary Compliance staff are working with the National Urban League to expand its work among corporations. Additionally, OVC published a “Corporate Newsletter” on fair housing which has been regularly and widely circulated to major U.S. corporations. OVC also works closely with the American Association of Life Insurance, and that group


has issued a policy statement in support of fair housing.

G. National Organizations

Groups not directly involved in the housing industry, or with industry in general, are also making a contribution. For example, the Association of Real Estate License Law Officials (ARELLO) is made up of State real estate licensing officials who are responsible for the testing and certification of real estate brokers and salesmen. ARELLO, working with the National Association of Realtors®, has agreed to incorporate questions on equal housing opportunity into state examinations for licensing.

IF YOU THINK YOUR HOUSING RIGHTS HAVE BEEN VIOLATED

HUD is ready to help with any problem of housing discrimination. If you think your rights have been violated, the Housing Discrimination Complaint Form is available for you to download, complete and return, or complete online and submit, or you may write HUD a letter, or telephone the HUD Office nearest you. You have one year after an alleged violation to file a complaint with HUD, but you should file it as soon as possible.

What to Tell HUD

• Your name and address

• The name and address of the person your complaint is against (the respondent)

• The address or other identification to the housing involved

• A short description to the alleged violation (the event that caused you to believe your rights were violated)

• The date(s) to the alleged violation

Where to Write or Call

Send the Housing Discrimination Complaint Form or a letter to the California HUD office:

California Regional office of FHEO

US Department of Housing and Urban Development

600 Harrison St., 3rd Floor


San Francisco, CA 94107-1387

Or you may call the office directly at:

(415) 489-6524

(800) 347-3739

TTY (415) 436-6594

If You Are Disabled

HUD also provides:

• A toll-free TTY phone for the hearing impaired: 1-800-927-9275.

• Interpreters

• Tapes and braille materials

• Assistance in reading and completing forms

What Happens when You File a Complaint?

HUD will notify you when it receives your complaint. Normally, HUD also will:

• Notify the alleged violator of your complaint and permit that person to submit an answer

• Investigate your complaint and determine whether there is reasonable cause to believe the Fair Housing Act has been violated

• Notify you if it cannot complete an investigation within 100 days of receiving your complaint

Conciliation

HUD will try to reach an agreement with the person your complaint is against (the respondent). A conciliation agreement must protect both you and the public interest. If an agreement is signed, HUD will take no further action on your complaint. However, if HUD has reasonable cause to believe that a conciliation agreement is breached, HUD will recommend that the Attorney General file suit.

Complaint Referrals

If HUD has determined that your State or local agency has the same fair housing powers as HUD, HUD will refer your complaint to that agency for investigation and notify you of the referral. That agency must


begin work on your complaint within 30 days or HUD may take it back.

What if You Need Help Quickly?

If you need immediate help to stop a serious problem that is being caused by a Fair Housing Act violation, HUD may be able to assist you as soon as you file a complaint. HUD may authorize the Attorney General to go to court to seek temporary or preliminary relief, pending the outcome of your complaint, if:

• Irreparable harm is likely to occur without HUD’s intervention

• There is substantial evidence that a violation of the Fair Housing Act occurred

Example: A builder agrees to sell a house but, after learning the buyer is black, fails to keep the agreement. The buyer files a complaint with HUD. HUD may authorize the Attorney General to go to court to prevent a sale to any other buyer until HUD investigates the complaint.

What Happens after a Complaint Investigation?

If, after investigating your complaint, HUD finds reasonable cause to believe that discrimination occurred, it will inform you. Your case will be heard in an administrative hearing within 120 days, unless you or the respondent want the case to be heard in Federal district court. Either way, there is no cost to you.

The Administrative Hearing

If your case goes to an administrative hearing HUD attorneys will litigate the case on your behalf. You may intervene in the case and be represented by your own attorney if you wish. An Administrative Law Judge (ALJ) will consider evidence from you and the respondent. If the ALJ decides that discrimination occurred, the respondent can be ordered:

• To compensate you for actual damages, including humiliation, pain and suffering.

• To provide injunctive or other equitable relief, for example, to make the housing available to you.

• To pay the Federal Government a civil penalty to vindicate the public interest. The maximum penalties are $16,000 for a first violation and $65,000 for a third violation within seven years.

• To pay reasonable attorney’s fees and costs.


Federal District Court

If you or the respondent choose to have your case decided in Federal District Court, the Attorney General will file a suit and litigate it on your behalf. Like the ALA, the District Court can order relief, and award actual damages, attorney’s fees and costs. In addition, the court can award punitive damages.

IN ADDITION…

You May File Suit

You may file suit, at your expense, in Federal District Court or State Court within two years of an alleged violation. If you cannot afford an attorney, the Court may appoint one for you. You may bring suit even after filing a complaint, if you have not signed a conciliation agreement and an Administrative Law Judge has not started a hearing. A court may award actual and punitive damages and attorney’s fees and costs.

Other Tools to Combat Housing Discrimination

If there is noncompliance with the order of an Administrative Law Judge, HUD may seek temporary relief, enforcement of the order or a restraining order in a United States Court of Appeals.

The Attorney General may file a suit in a Federal District Court if there is reasonable cause to believe a pattern or practice of housing discrimination is occurring.

For Further Information

The Fair Housing Act and HUD’s regulations contain more detail and technical information. If you need a copy of the law or regulations, contact the San Francisco Regional Office of FHEO.

FAIR HOUSING INITIATIVES PROGRAM (FHIP)Fair housing organizations and other non-profits that receive funding through the Fair Housing Initiatives Program (FHIP) assist people who believe they have been victims of housing discrimination.

FHIP organizations partner with HUD to help people identify government agencies that handle complaints of housing discrimination. They also conduct preliminary investigation of claims, including sending “testers” to properties suspected of practicing housing discrimination. Testers are minorities and whites with the same financial qualifications who evaluate whether housing providers treat equally-qualified people differently.

In addition to funding organizations that provide direct assistance to individuals who feel they have been


discriminated against while attempting to purchase or rent housing, the FHIP program has four initiatives that promote fair housing laws and equal housing opportunity awareness.





1. Which of the following is part of the Quality Housing and Work Responsibility Act (QHWRA):

A. opens the door to mixed income communities

B. joins the Section 8 voucher and certificate programs into a single program

C. deregulates public housing agencies

D. all of the above

2. Which of the following is not specifically protected in the Fair Housing Act:

A. race

B. religion

C. sexual orientation

D. disability




1. D. all of the above

See pages 29-30

2. C. sexual orientation

See page 31

44 • End of Study Materials

END OF STUDY MATERIALS

Exam Information

The exam for this course can be accessed by logging in to your account at www.EmpireLearning.com.

» Number of Questions: 15 » Time Limit: 15 minutes » Passing Score: 70%

DRE Regulations Regarding Exam Availability

The California Department of Real Estate strictly regulates the timing of when exams can be taken for continuing education courses. Exams will only be available when the following two conditions are met:

1. The corresponding number of study hours have been accumulated.a. 8 hours of study time is granted automatically every 24 hours starting at the

time of purchase.b. This course is worth 3 hours of CE credit and therefore requires 3 hours of

unused study time credit.c. Your currently available study hours are listed on the My Account page.

2. Taking this exam will not put the licensee over the DRE limit of 15 credits of final exams in any 24-hour period.

a. This course is worth 3 CE Credits, so no more than 12 CE Credits of exams can be taken in the 24 hours before taking this exam.

b. The number of credits of exams you have taken in the last 24 hours is listed on the My Account page, as well as the time each of those exams was completed.

© Empire Learning, 2019

Documents

Fair Housing - empire-course-materials-cf.s3-us-west-2