1. The Real Estate School
U N I T 1 6
ETHICAL PRACTICES AND FAIR
HOUSING
1
Page 271

5. 5
ALLENTOWN, PA (2011-2012)

6. 6
ALLENTOWN, PA (2011-2012)
• Conducted 33 tests (22 phone; 11 in-person)
• One with white buyer and one with minority buyer
• Identical on paper with same income level, employment
history and number of household residents
• Agents treated white and minority home buyers
differently in 73% of cases

7. 7
LONG ISLAND, NY (2016-2019)

8. 8
LONG ISLAND, NY (2016-2019)
• Three-year investigation by NewsDay into real estate
practices
• 25 undercover testers trained; 93 real estate agents
tested; 249 hours of meetings secretly recorded; 5,763
listings analyzed
• The RESULTS:
o Asians treated differently 19% of the time
o Hispanics treated differently 39% of the time
o Blacks treated differently 49% of the time

9. 9
LONG ISLAND, NY (2016-2019)
Newsday.com/divided

10. FEDERAL & STATE CIVIL RIGHTS LAWS
• Federal, state, and local fair housing or equal opportunity laws
affect every phase of a real estate transaction
• Agents can’t allow
discriminatory attitudes
of property owners or
seekers to affect
compliance with fair
housing laws
10
Page 272

11. FEDERAL & STATE CIVIL RIGHTS LAWS
• Civil Rights Act of 1866 – Prohibits discrimination based on race
“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.”
11
Page 272

12. FEDERAL & STATE CIVIL RIGHTS LAWS
• Jones vs. Mayer (Supreme Court Case 1968)
Racial discrimination is prohibited in the
sale or rental of publicly or privately held
property, whether facilitated by a real
estate agent or sold or rented by the
owner
• Upheld the Civil Rights Act of 1866
12
Page 272
Joseph & Barbara
Jones

13. FEDERAL & STATE CIVIL RIGHTS LAWS
• Fair Housing Act
Group of laws prohibiting discrimination based on race, color,
religion, sex, disability, familial status, and national origin
13
Page 273

14. FEDERAL & STATE CIVIL RIGHTS LAWS
• Fair Housing Act (cont’d)
• Administered by the U.S.
Department of Housing and
Urban Development (HUD)
• Distributes an equal housing
opportunity poster to businesses
14
Page 273
Figure 16.1

15. FEDERAL & STATE CIVIL RIGHTS LAWS
• Title VIII of the Civil Rights Act
of 1968 Prohibits discrimination
in housing because of race,
color, religion, and national
origin
15
Page 273

16. FEDERAL & STATE CIVIL RIGHTS LAWS
• Fair Housing Amendments Act (1974) – Added sex to the protected
classes in the sale or rental of housing
16
Page 273

17. FEDERAL & STATE CIVIL RIGHTS LAWS
17
Page 273
• Fair Housing Amendments Act (1988) – Included families with
children (familial status) and people with physical or mental
disabilities
• Also changed the
penalties, making
them more severe,
and added
damages

18. FEDERAL & STATE CIVIL RIGHTS LAWS
18
Page 273
• Housing for Older Persons Act (1995) – Repealed the requirement
that 55-and-older housing have significant facilities and services
designed for seniors
• Exemptions:
1. All units are occupied
by persons 62 and older
2. If 80% of the units are
occupied by at lease one
person 55 and older

19. FEDERAL & STATE CIVIL RIGHTS LAWS
19
Page 275
• Definitions
• Housing – Any building designed for occupancy as a residence
by one or more families

20. FEDERAL & STATE CIVIL RIGHTS LAWS
20
Page 275
• Definitions (cont’d)
• Familial Status – One or more individuals younger than age 18
living with a parent or guardian
• Also includes a woman who is pregnant
• Illegal to advertise properties as being
for adults only or to indicate a
preference for a certain number of
children

21. FEDERAL & STATE CIVIL RIGHTS LAWS
21
Page 275
• Definitions (cont’d)
• Disability – A physical or mental impairment that substantially
limits one or more major life activities

22. FEDERAL & STATE CIVIL RIGHTS LAWS
22
Page 275
• Definitions (cont’d)
• Persons who have HIV virus (AIDS) are protected

23. FEDERAL & STATE CIVIL RIGHTS LAWS
23
Page 275-276
• Definitions (cont’d)
• Renters with disabilities must be permitted to make reasonable
modifications at their own expense provided they restore the
property to its previous condition at the end of the lease
Grab Bars
Lower
Kitchen
Cabinets
Wheelchair
Ramp
Handicap
Parking
Space

24. FEDERAL & STATE CIVIL RIGHTS LAWS
24
Page 276
• Service Animals and Emotional Support Animals
• Landlords may not refuse to rent to a tenant with a disability
who requires an assistance
animal, even if the property
has a no pets policy
• Assistance animals are not
pets and are a reasonable
accommodation

25. FEDERAL & STATE CIVIL RIGHTS LAWS
25
Page 276-277
• Service Animals and Emotional Support Animals (cont’d)
• HUD has two categories for assistance animals:
1. Service Animals – Trained to work, provide assistance or perform
tasks (dogs & miniature horses)
2. Emotional Support Animals – Alleviate symptoms of a person’s
mental disability (no species or breed restrictions)
NOTE: Animals that provide ‘affection’ do not necessarily qualify as service animals according to the
Americans with Disabilities Act (ADA)

26. FEDERAL & STATE CIVIL RIGHTS LAWS
26
Page 277
• Service Animals and Emotional Support Animals (cont’d)
• Landlords may not ask an individual to prove the need for an
assistance animal if the disability is readily apparent
• If the disability is apparent, a health professional may supply a
letter which is sufficient

27. FEDERAL & STATE CIVIL RIGHTS LAWS
27
Page 277
• Service Animals and Emotional Support Animals (cont’d)
• Landlords my not require a pet deposit or additional fee for an
assistance animal
• May require assistance animals to be vaccinated
• Tenants must follow rules regarding waste cleanup, noise levels,
and behavior problems

28. FEDERAL & STATE CIVIL RIGHTS LAWS
28
Page 278
• Exemptions to the Fair Housing Act
• Owner-occupied buildings of one to four family dwellings
• Pennsylvania only recognizes an exemption in the rental of:
• Owner-occupied two unit dwelling
• Owner-occupied rooming house with a common entrance and shared
bathroom facility
• The rental of housing accommodations in a single-sex dormitory

29. FEDERAL & STATE CIVIL RIGHTS LAWS
29
Page 278
• Exemptions to the Fair Housing Act (cont’d)
• Sale or rental of a single family home when:
• An individual owns not more than three homes
• Does not sell more than one home every two years
• Real estate licensee is not used
• Discriminatory advertising is not used
• This exemption does not apply in Pennsylvania

30. FEDERAL & STATE CIVIL RIGHTS LAWS
30
Page 278
• Exemptions to the Fair Housing Act (cont’d)
• Housing owned by religious organizations may be restricted to
people of the same religion if membership in the organization is
not restricted on the basis of race, color, or national origin

31. FEDERAL & STATE CIVIL RIGHTS LAWS
31
Page 278
• Exemptions to the Fair Housing Act (cont’d)
• A private club that is not open to the public may restrict the
rental or occupancy of lodgings that it owns to its members as
long as the lodgings are not operated commercially

32. FEDERAL & STATE CIVIL RIGHTS LAWS
32
Page 278
• Pennsylvania Human Relations Act (PHRA) – State law that is
substantially equivalent to the federal Fair Housing Act but
more restrictive
• In addition to the Federal protected classes, PHRA adds
religious creed, ancestry, and age (40 yrs.)

33. FEDERAL & STATE CIVIL RIGHTS LAWS
33
Page 279
• Housing Accommodations and Commercial Property – Unlike
Federal law, Pennsylvania law applies to not only housing
accommodations but also to commercial property

34. FEDERAL & STATE CIVIL RIGHTS LAWS
34
Page 279
• Exemptions – The Federal Housing Act exemptions have limited
application in Pennsylvania
• Pennsylvania Real Estate Licensing
and Registration Act - Violating any
provision of the Pennsylvania Human
Relations Act is also a violation of the
real estate licensing law

35. FEDERAL & STATE CIVIL RIGHTS LAWS
35
Page 279-283
• Official Notice and Poster – Fair Housing and Lending posters
must be prominently displayed in the place of business of those
individuals who are subject to the PHRA

36. NAR CODE OF ETHICS
36
• Standard of Practice 10-5
REALTORS® must not use harassing speech, hate speech, epithets, or slurs
based on race, color, religion, sex, disability, familial status, national origin,
sexual orientation, or gender identity. (Adopted and effective November 13,
2020, Amended 1/23)

37. OTHER LAWS
37
Page 284
• Megan’s Law – Promotes the establishment of registration systems
to maintain information on persons who have kidnapped or
committed sexual crimes
against children or
committed sexually
violent crimes

38. OTHER LAWS
38
Page 284
• Megan’s Law (cont’d)
• Licensees are not required to research or disclose information
about sex offenders (page 357, para.24)
www.PaMegansLaw.state.pa.us

39. OTHER LAWS
39
Page 284
• Equal Credit Opportunity Act (ECOA) – Prohibits discrimination in
lending based on race, color, religion, national origin, sex, marital
status, age, or receipt of public assistance in the granting of credit
• Enforced by the Federal
Trade Commission and
the Department of Justice

40. OTHER LAWS
40
Page 284-285
• Americans with Disabilities Act (ADA) – Requires reasonable
accommodations in employment and access to goods, services,
and public buildings
• Title I requires that employers with 15 or
more employees make reasonable
accommodations that enable an individual
with a disability to perform essential job
functions
• Only 4 or more in Pennsylvania

41. OTHER LAWS
41
Page 285
• Americans with Disabilities Act (ADA) (cont’d)
• Title III requires that individuals with disabilities have full
accessibility to businesses, goods, and public services
• Best to advise commercial
clients to seek the services
of vendors who specialize
in ADA issues

42. FAIR HOUSING ACT ENFORCEMENT
42
Page 286
• Blockbusting (Panic Selling) – Unlawful act of encouraging people
to sell or rent their homes by claiming that the entry or
prospective entry of a protected class of people into a
neighborhood will have a negative impact on property values

43. FAIR HOUSING ACT ENFORCEMENT
43
Page 287
• Steering – The channeling of home seekers to particular
neighborhoods or discouraging potential buyers from considering
some areas

44. FAIR HOUSING ACT ENFORCEMENT
44
Page 287
• Steering (cont’d)
• Landlords may not put members of a protected class on a
certain floor or building

45. FAIR HOUSING ACT ENFORCEMENT
45
Page 287
• Advertising – Advertisements of property for sale or rent may not
include language indicating a preference or limitation
• No exception
to this rule
no matter
how subtle

46. FAIR HOUSING ACT ENFORCEMENT
46
Page 288
• Appraising – Race, color, religion, national origin, sex, disability and
familial status may not be used as factors when preparing
appraisals

47. FAIR HOUSING ACT ENFORCEMENT
47
Page 288
• Redlining – The practice of refusing to make mortgage loans or
issue insurance policies in
specific areas for reasons
other than economic
qualifications of the
applicants

48. FAIR HOUSING ACT ENFORCEMENT
48
Page 289
• Any aggrieved person who believes illegal discrimination has
occurred may file a complaint with HUD within one year of the
alleged act
• HUD has 100 days after receiving
the complaint to determine if there
is reasonable cause to bring a
charge of illegal discrimination or
dismiss the complaint

49. FAIR HOUSING ACT ENFORCEMENT
49
Page 289
• An administrative law judge (AJL) may award actual damages or
impose monetary penalties:
• $21,039 for first offense
• $52,596 for a 2nd violation
within 5 years
• $105,194 for a 3rd violation
within 7 years
• May also issue an injunction

50. FAIR HOUSING ACT ENFORCEMENT
50
Page 289
• Parties may elect civil (judicial) action in federal court at any time
with two years of the discriminatory act
• Unlimited punitive damages can be awarded in addition to actual
damages

51. FAIR HOUSING ACT ENFORCEMENT
51
Page 289
• Real estate licensee’s Errors and Omissions (E&O) Insurance
normally does not pay on violations of the fair housing laws

52. FAIR HOUSING ACT ENFORCEMENT
52
Page 290
• The attorney general may file a civil action in federal district court
upon finding reasonable cause of violation
• Up to $55,000 for
first violation
• Up to $110,000 for
second and
subsequent violations

53. FAIR HOUSING ACT ENFORCEMENT
53
Page 290
• Complaints brought under the Civil Rights Act of 1866 are taken
directly to a federal court

54. IMPLICATIONS FOR BROKERS & SALESPERSONS
54
Page 290
• Intent and Effect
• Disparate Impact – Policies and procedures that appear to be
neutral but negatively affect people in protected classes

55. • Response to Concerns of Terrorism – Landlords and property
managers need to ensure that their procedures do not infringe on
fair housing rights
• Asking applicants for citizenship documentation or immigration
status papers during the screening process does not violate the
Fair Housing Act
IMPLICATIONS FOR BROKERS & SALESPERSONS
55
Page 290-291

56. IMPLICATIONS FOR BROKERS & SALESPERSONS
56
Page 291
• Threats or Acts of Violence
• Fair Housing Act protects rights of those
who seek the benefits of the open
housing law, including property owners,
brokers and salespersons
• Threats, coercion, and intimidation
are punishable by criminal action

57. IMPLICATIONS FOR BROKERS & SALESPERSONS
57
Page 291
• Threats or Acts of Violence (cont’d)
• Ethnic Intimidation and
Vandalism Act prohibits
retaliation against those who
file complaints

58. • Standards of professional ethics address the two sides of a
profession:
1. Standards for integrity and
competence in dealing with
consumers
2. Code of conduct for relations
with professionals inside an
industry
58
Page 291
IMPLICATIONS FOR BROKERS & SALESPERSONS

59. • National Association of REALTORS®
established a Code of Ethics in 1913
• Practical applications of the
articles of the code are
known as the Standards
of Practice
59
Page 291-292
IMPLICATIONS FOR BROKERS & SALESPERSONS

60. IMPLICATIONS FOR BROKERS
AND SALESPERSONS
60
Page 292
• The Pennsylvania Human Relations Commission and the
Pennsylvania Association of REALTORS® have jointly
authored the Fair Housing Guidelines
• Resource for developing nondiscriminatory policies and
procedures

61. IMPLICATIONS FOR BROKERS
AND SALESPERSONS
61
Page 292
• Fair Housing Guidelines recommendations for:
• Standardized inventory of properties for sale/rent
• Consistent practices
• Verifiable and measurable
criteria for selecting tenants
• Written documentation of
interactions