Fair housing = good business 2014

Fair Housing = Good Business

Kevin Cahill

(I wrote this course in 2009, as a 3 hour Continuing Education course. The material is not

dated, though I taught the class with this powerpoint as a visual aid to the class. I’ve

removed the slides thanking sponsors and those surrounding the coffee-break. Use it as you wish!)

Welcome!

Discrimination can be subtle, or indirect, and sometimes unintentional. It is very important that real estate agents are aware of and compliant with the laws that govern housing discrimination.

Today we will look at the history of important legislation and court cases affecting equal housing opportunities; we will look at working properly with our buyers, and properly counseling our sellers; and we will look at properly advertising to open the doors for more people to the dream of home-ownership.

Practicing fair housing is a better way to conduct your real estate business; it is the right thing to do for your clients and customers; and it is the law.

The Pledge of Allegiance

Allow me to introduce myself…

Kevin Cahill• Licensed Realtor since June of 1999

– Keller Williams Realty• Team Leader, South Tampa, Florida, May 2009• Realtor, Greater Cleveland, Ohio, Nov. 2004-present

– Smythe, Cramer Co.

Realtor, Shaker Heights, June 1999-Nov.2004

• Director, CABOR and Ohio Association of Realtors• Accredited Buyer Representative (ABR)• e-PRO certified• Member of the Real Estate Program of the National Trust for

Historic Preservation• Certified ProManage Instructor• Husband, father of two daughters• Pretty Nice Guy (PNG)

Fair Housing = Good Business

Outline:

• Introduction and History of important legislation and Court Cases

• The Protected Classes• Disparate Treatment of Customers and Clients• Steering of Buyers; Obligations to Out-of-Towners• Buyer Agent Fair Housing Practices

• Fair Housing Issues with Sellers• Fair Housing and Advertising: Words that can and cannot be used;

providing direction• Complaints and Penalties

• Questions and Answers – Fair Housing in Practice

Introduction

The remarkable homeownership rate in America is not a free-market phenomenon.

Since the time of our founding fathers, the government has had a deliberate policy of promoting and subsidizing property ownership.

From the Declaration of Independence to the Homestead Act of 1862 to modern policies in this current administration, the federal and state government have made it easy for more and more families to own a home.

The U.S. government seized on this idea of democratic ownership of property and made it the envy of the world.

History of Important Legislation and Court Cases

History of Important Legislation and Court Cases (cont’d)

“Life, Liberty and the Pursuit of…”


“Life, Liberty and the Pursuit of Property”

Jefferson had drawn on the philosophy of John Locke (1632-1704), who had written in his Second Treatise on Government in 1690 that under the law of nature, every man has “a power not only to preserve his property—that is, his life, liberty and estate, against the injuries and attempts of other men, but to judge of and punish the breaches of that law in others.” Life and liberty, as well as owned land, were all considered property in Locke’s view, and his treatise spells out very clearly the concept of natural property rights entitled to all men.


“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed…”


"OUR LIVES, OUR FORTUNES, OUR SACRED HONOR"

Of those 56 who signed the Declaration of Independence, nine died of wounds or hardships during the war. Five were captured and imprisoned and were tortured before they died. Several lost wives, sons or entire families. One lost his 13 children. Two wives were brutally treated. All were at one time or another the victims of manhunts and driven from their homes. Twelve signers had their homes completely burned. Seventeen lost everything they owned. Yet not one defected or went back on his pledged word. Their honor, and the nation they sacrificed so much to create, is still intact.


“Fortunately, the Constitution of the United States knows no distinction between citizens on account of color. Neither does it know any difference between a citizen of a State and a citizen of the United States. Citizenship evidently includes all the rights of citizens, whether State or national. If the Constitution knows none, it is clearly no part of the duty of a Republican Congress now to institute one. The mistake of the last session was the attempt to do this very thing, by a renunciation of its power to secure political rights to any class of citizens, with the obvious purpose to allow the rebellious States to disfranchise, if they should see fit, their colored citizens. This unfortunate blunder must now be retrieved, and the emasculated citizenship given to the negro supplanted by that contemplated in the Constitution of the United States, which declares that the citizens of each State shall enjoy all the rights and immunities of citizens of the several States,--so that a legal voter in any State shall be a legal voter in all the States.”

RECONSTRUCTIONby Frederick DouglassAtlantic Monthly 18 (1866): 761-765.


Civil Rights Act of 1866“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.”

The Fourteenth Amendment 1868Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Section 2. The Congress shall have power to enforce this article by appropriate legislation

Passed by Congress in June of 1866… All of the Confederate States needed to ratify this amendment in order to return to the Union… only Tennessee ratified it immediately; by 1868, the other ten states did.


The Fifteenth Amendment 1870

• Section 1. The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any state on account of race, color, or previous condition of servitude.

• Section 2. The Congress shall have power to enforce this article by appropriate legislation.

In 1870 African Americans were also given the right to vote through the 15th Amendment. Despite this right, some Southern states added grandfather clauses to their state Constitutions to counter this new right. Typical clauses stated that the right to vote extended only to citizens or their descendants, who had the right to vote prior to 1866 or 1867. The U.S. Supreme Court declared grandfather clauses unconstitutional in 1915 and in 1939.


Plessy v. Ferguson 1896 (Separate but Equal)

On June 7, 1892, a 30-year-old shoemaker named Homer Plessy was jailed for sitting in the “white" car of the East Louisiana Railroad. Plessy was only one-eighths black and seven-eighths white, but under Louisiana law, he was considered black and therefore required to sit in the “colored" car. Plessy went to court and argued, in Homer Adolph Plessy v. The State of Louisiana, that the Separate Car Act violated the Thirteenth and Fourteenth Amendments to the Constitution.

The judge at the trial was John Howard Ferguson, a lawyer from Massachusetts who had previously declared the Separate Car Act "unconstitutional on trains that traveled through several states". In Plessy's case, however, he decided that the state could choose to regulate railroad companies that operated only within Louisiana. He found Plessy guilty of refusing to leave the white car. Plessy appealed to the Supreme Court of Louisiana, which upheld Ferguson's decision. In 1896, the Supreme Court of the United States heard Plessy's case and found him guilty once again. Speaking for a seven-person majority, Justice Henry Brown wrote:

"That [the Separate Car Act] does not conflict with the Thirteenth Amendment, which abolished slavery...is too clear for argument...A statute which implies merely a legal distinction between the white and colored races -- a distinction which is founded in the color of the two races, and which must always exist so long as white men are distinguished from the other race by color -- has no tendency to destroy the legal equality of the two races...The object of the [Fourteenth A]mendment was undoubtedly to enforce the absolute equality of the two races before the law, but in the nature of things it could not have been intended to abolish distinctions based upon color, or to enforce social, as distinguished from political equality, or a commingling of the two races upon terms unsatisfactory to either."

The lone dissenter, Justice John Harlan, showed incredible foresight when he wrote:"Our Constitution is color-blind, and neither knows nor tolerates classes among citizens. In respect of civil rights, all citizens are equal before the law...In my opinion, the judgment this day rendered will, in time, prove to be quite as pernicious as the decision made by this tribunal in the Dred Scott case...The present decision, it may well be apprehended, will not only stimulate aggressions, more or less brutal and irritating, upon the admitted rights of colored citizens, but will encourage the belief that it is possible, by means of state enactments, to defeat the

beneficient purposes which the people of the United States had in view when they adopted the recent amendments of the Constitution.“

Over time, the words of Justice Harlan rang true. The Plessy decision set the precedent that "separate" facilities for blacks and whites were constitutional as long as they were "equal." The "separate but equal" doctrine was quickly extended to cover many areas of public life, such as restaurants, theaters, restrooms, and public schools. Not until 1954, in the equally important Brown v. Board of Education decision, would the "separate but equal" doctrine be struck down.

http://www.watson.org/~lisa/blackhistory/scott/


Buchanan v. Warley 1917It was ruled that Louisville, Kentucky’s residential segregation laws (block-by-block

segregation) were unconstitutional because they interfered with a landowner’s right to dispose of real property.

Block-by-block segregation was replaced with racially restrictive covenants whereby owners agreed not to sell to anyone other than a member of a specific group, or excluded specific groups.

Shelley v. Kraemer 1948In 1945, a black family by the name of Shelley purchased a house in St. Louis, Missouri.

At the time of purchase, they were not aware that a restrictive covenant had been in place on the property since 1911. The restrictive covenant barred "people of the Negro or Mongolian Race" from owning the property. Neighbors sued to restrain the Shelleys from taking possession of the property they had purchased. The Supreme Court of Missouri held that the covenant was enforceable against the purchasers because the covenant was a purely private agreement between the original parties thereto, which "ran with the land" and was enforceable against subsequent owners. The United States Supreme Court reversed this decision in 1948.

In 1972, The US Supreme Court ruled that the recording of deeds with racial restrictions violated the Fifth Amendment and the Federal Fair Housing Law passed in 1968.

Fair Housing Struggles in the 1960s


Title VI of the Civil Rights Act of 1964 Title VI prohibits discrimination on the basis of race, color, or national origin in programs and activities receiving federal financial assistance.

The Fair Housing Act of 1968Title 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 of legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).


Fair Housing-Related Presidential Executive Orders:

• Executive Order 11063 (20 November 1962 Kennedy)Executive Order 11063 prohibits discrimination in the sale, leasing, rental, or other disposition of properties and facilities owned or operated by the federal government or provided with federal funds.

• Executive Order 11246 (24 September 1965 Johnson)Executive Order 11246, as amended, bars discrimination in federal employment because of race, color, religion, sex, or national origin.

• Executive Order 12892 (17 January 1994 Clinton)Executive Order 12892, as amended, requires federal agencies to affirmatively further fair housing in their programs and activities, and provides that the Secretary of HUD will be responsible for coordinating the effort. The Order also establishes the President's Fair Housing Council, which will be chaired by the Secretary of HUD.

• Executive Order 12898 (11 February 1994 Clinton)Executive Order 12898 requires that each federal agency conduct its program, policies, and activities that substantially affect human health or the environment in a manner that does not exclude persons based on race, color, or national origin.

• Executive Order 13166 (16 August 2000 Clinton)Executive Order 13166 eliminates, to the extent possible, limited English proficiency as a barrier to full and meaningful participation by beneficiaries in all federally-assisted and federally conducted programs and activities.

• Executive Order 13217 (18 June 2001 Bush)Executive Order 13217 requires federal agencies to evaluate their policies and programs to determine if any can be revised or modified to improve the availability of community-based living arrangements for persons with disabilities.


Are there issues today before the courts you question as right and good?

Eminent Domain?

Let’s have the local township take your $100,000 lakefront cottage, and those of your neighbors, and give them to a private developer who will build a $10,000,000 condo project… it is, after all, for the greater good.

OUCH!


I’d like to hear your thoughts…

Were you alive in 1964?

What were your thoughts about fair housing?

Did you watch the evening news… what was on?

Were there Gentleman’s Agreements to discriminate?

The Protected ClassesFederal Level

• Race • Color • Religion • National Origin • Sex (gender)• Handicap (disability)• Familial Status (persons with children under 18

years of age; women who are pregnant)

The Protected ClassesOther States and Municipalities may have additional classes

• Race • Color • Religion • National Origin • Sex (gender)• Handicap (disability)• Familial Status (persons with children under 18 years of age;

women who are pregnant)• Age• Sexual Orientation• Lawful Occupation• Citizenship Status• Marital Status

The Protected Classesin Ohio

• Race • Color • Religion • National Origin • Ancestry• Sex (gender)• Handicap (disability) and those associated with a

person with a disability• Familial Status • Sexual Orientation in some jurisdictions• Military Status (effective 24 March 2008)

– “Military status” means a person’s status in “service in the uniformed services” as defined in section 5903.01 of the Revised Code.

“Service in the uniformed services” means the performance of duty, on a voluntary or involuntary basis, in a uniformed service, under competent authority, and includes active duty, active duty for training, initial active duty for training, inactive duty for training, full-time national guard duty, and performance of duty or training by a member of the Ohio organized militia pursuant to Chapter 5923. of the Revised Code. “Service in the uniformed services” includes also the period of time for which a person is absent from a position of public or private employment for the purpose of an examination to determine the fitness of the person to perform any duty described in this division.

(H) “Uniformed services” means the armed forces, the Ohio organized militia when engaged in active duty for training, inactive duty training, or full-time national guard duty, the commissioned corps of the public health service, and any other category of persons designated by the president of the United States in time of war or emergency

Military Status

The Protected Classes (cont’d)In 1965, Ohio became one of the first states to enact Fair Housing Legislation. On June 30, 1992, Governor George Voinovich signed House Bill 321, which enacted changes in the classes of persons protected by the Ohio Fair Housing Law, and significantly enhanced the enforcement powers of The Ohio Civil Rights Commission. The law gives all persons in the protected classes the right to live wherever they can afford to buy a home or rent an apartment. It is unlawful on the basis of race, color, religion, sex, national origin or ancestry, disability, or familial status to:

a. refuse to rent, sell, finance, or insure housing accommodations or residential property b. represent to any person that housing accommodations are not available for inspection, sale, rental or lease c. refuse to lend money for the purchase, construction, repair, rehabilitation, or maintenance of housing

accommodations or residential property d. discriminate against any person in the purchase, renewal, or terms and conditions of fire, extended coverage, or

home owner’s or renter’s insurance e. refuse to consider without prejudice the combined income of both spouses. f. print, publish, or circulate any statement or advertisement which would indicate a preference or limitation. g. deny any person membership in any multiple listing services, or real estate broker’s organization.

The law covers all housing accommodations, residential buildings, vacant lots, or other property used for residential purposes. However, religious, fraternal, or bona fide private organizations that provide housing accommodations may give a preference to their own members.

The Fair Housing Act of 1968, as amended, also prohibits discrimination in housing on the basis or race, color, religion, sex, national origin, familial status, or disability. Familial status means either one or more minors (under the age of 18) who live with a parent or guardian or any person who is pregnant, or in the process of securing legal custody of any minor. The familial status provision, with limited exceptions, prohibits a housing provider from denying housing to families with children; however, protection is not applicable if housing is intended for, and to be occupied only by persons 62 years or older; or at least one person 55 years or older resides in each unit.

The law states that protection is provided for persons who have a disability as defined by the law, or who have a history of a disability, or who are perceived as being disabled. The law also protects those persons who are associated with a disabled person. Reasonable accommodation or a person’s disability, and/or modifications of the housing accommodations that will afford the person with a disability full enjoyment of the premises or services of the housing accommodations, must be provided for all common use areas. Under some circumstances the landlord, manager or owner must pay the expense of these reasonable accommodations or modifications. Under other circumstances, that cost can be paid by the occupant or user of the housing accommodations. All new construction designed or first occupied on or after March 13, 1991, must meet accessibility standards for persons with disabilities.

-- Ohio Civil Right Commission website

Disparate Treatment of Customers and Clients

disparate \DIS-puh-rit; dis-PAIR-it\, adjective:1. Fundamentally different or distinct in quality or kind.2. Composed of or including markedly dissimilar elements.

Disparate Treatment of Customers and Clients (cont’d)

Provide your Buyer Clients with the pamphlet:

Fair Housing: Know the Law

Disparate Treatment of Customers and Clients (cont’d)

Specific Actions prohibited under the Fair Housing Act:

• Refuse to rent or sell housing or to negotiate for housing.• Make housing unavailable or deny a dwelling.• Set different terms, conditions or privileges for sale or rental of a dwelling or in the

provision of 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).• Discriminate in residential real estate related transactions• Deny anyone access to or membership in a facility or service (such as the MLS)

related to the sale of rental or housing• Threaten, coerce, intimidate, or interfere with anyone exercising a fair housing

right or assisting others who exercise that right

Steering of Buyers; Obligations to Out-of-Towners

Buyers are entitled to see any property that can fit their needs, regardless of location.

Real estate agents must take special care to show out-of-towners any properties that can fit their needs, without limiting what they see based on a discriminatory factor, or on what the buyer requests in terms of a protected class distinction.

Buyer Agent Fair Housing Practices

• Treat all of your buyer clients consistently.• Treat all of your buyer clients fairly.• Utilize systems to ensure consistent and

fair treatment of your buyer clients.• Take copious notes of your buyer clients’

needs.• Keep records of what properties you’ve

shown buyer clients, and be able to demonstrate consistent and fair treatment.

Fair Housing Issues with Sellers

Provide your Seller Clients with the pamphlet:

Fair Housing: Know the Law

Accidental Landlords

•Property owners who become landlords cannot discriminate against prospective renters.

•They must treat all prospective renters equally… if they do it to one, request it from one, allow it from one… they must treat all others equally and lawfully.

•This is an area of renewed concern, and an issue that is quite treacherous.

Fair Housing Issues with Sellers (cont’d)

• Discuss Fair Housing with your seller clients.• Counsel your seller clients that they will, of

course, sell their home to any buyer who can afford it, without regard to any protected classes.

• Have your seller client initial and date the Fair Housing clause of your listing agreement, to demonstrate that you had this discussion with the seller prior to listing their home for sale.

• Be prepared with scripts and dialogues should you ever encounter a resistant seller

Fair Housing Issues with Sellers (cont’d)

Who can share an example of an effective script or dialogue should you encounter a seller who has issue with Fair Housing?

Fair Housing Issues with Sellers (cont’d)The Resistant Seller

• First Step:– refer resistant seller to the Fair Housing

pamphlet, and the conversation you had when listing the property…

– remind the resistant seller that the only concern we have is whether the seller can afford the property.


• Second Step (if needed)– Remind the resistant seller that this is the law

of the land, that we’re talking about Federal Law.

– Inform the seller that you will not be party to a violation of Federal Law


• Third Step (if needed)– “Mr and Mrs Seller, I am going to sit here

while you call your attorney, and inform your attorney of what you are trying to do.”

– Have them contact their attorney.– If they refuse to contact their attorney, contact

your own attorney immediately, as you need to demonstrate that you are not in any way a party to a Fair Housing Violation.

Fair Housing and Advertising: Words that can and cannot be used

Refer to the 4-page handout of words that can and cannot be used, and those that should only be used with caution.

A helpful rule of thumb is to always describe the property, and never describe the buyer or seller of that property.

Fair Housing and Advertising: Providing Direction

• You may not provide location information or driving directions that refer to local landmarks which might be inferred to suggest a preference of certain buyers… for example, you cannot say that a property is near a church, or near a synagogue, or near a temple.

• You can use street names, you can use road references in your directions.

• Remember, we want as many buyers as possible to consider purchasing our listings!

Complaints and Penalties

Fair Housing Enforcement

Fair Housing Enforcement is conducted by the US Department of Justice, and the US Attorney General is authorized to bring Civil Actions if:

• There is cause to believe that any person or group is engaged in a pattern or practice of resistance to the full enjoyment of any rights granted by this title

• There is cause to believe that any group of persons has been denied any rights and such denial raise and issue of general public importance

• The Secretary of HUD refers a case of discriminatory practice to the Attorney General

• There is a breach of conciliation agreement entered into by HUD

These civil actions pursued by the Attorney General may result in a penalty up to $55,000 for the first violation and up to $110,000 for any subsequent violation.

Complaints and Penalties (cont’d)

Fair Housing Enforcement

Private Law Suits

• Federal District Court or State Court

– Any aggrieved person may file suit, at their own expense, within two years of an alleged violation

– You may even bring suit after filing a complaint with HUD, 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. The Fair Housing Amendments Act also removed the former $1,000 cap on punitive damages.

Questions and Answers – Fair Housing in Practice

I welcome your questions and observations.

Helpful Resources

• www.nationalfairhousing.org– Opening America’s Closed Doors

• http://crc.ohio.gov– Ohio’s Civil Rights Commission

• www.hud.gov– Homes and Communities

• www.realtor.org/housopp.nsf– Housing Opportunity Program

Conclusion

• We need to do the right thing and practice proper behavior

• Treat all people fairly and consistently in your business practices

• Think Win-Win • Have Integrity• Remember the Golden Rule:

treat everyone like you’d want to be treated.

It’s the Law, but it’s also just good business!

This has been my pleasure!Thank you for attending!

Kevin Cahill

• Evolve Real Estate in Florida• www.evolverealestate.net• 727-755-1995• [email protected]

• Freely distributed for your use.