Section ONE Fair Housing

Transcription

1 Section ONE Fair Housing Note: In 2013 the State of California reorganized and the Department of Real Estate was placed, as a Bureau, under the Department of Consumer Affairs. Thus, the DRE has become the BRE. Many references in the law, as quoted in this document, still refer to The Department when The Bureau would be the intended reference. Introduction: In the Preface to the California Attorney General's Office Civil Rights Handbook, UNLAWFUL DISCRIMINATION Your Rights and Remedies, third Edition published in August 2001, it is stated that, Equal opportunity and freedom from discrimination are fundamental goals of our nation and state. Both the California Constitution and the United States Constitution contain provisions commonly referred to as equal protection clauses. These constitutional provisions prohibit government from engaging in unlawful discrimination. Furthermore, Congress and the California Legislature have adopted statutes to address specific problems of discrimination in the private as well as the public sector. No doubt, the inspiration for these anti-discrimination laws is the concept of equality embodied in the equal protection clauses and in our nation s history. Unfortunately, discrimination is still a fact of life in the United States. Discrimination may be defined as the unequal treatment of a person because of color, religion, familial status, age, sex, nationality or handicap. There are unwritten, unspoken color barriers in many communities. Unmarried partners often find it difficult to rent living accommodations. A single parent may find it more difficult to purchase a home. Handicapped persons are often excluded from many areas of residence. Overtime, the laws have expanded the criteria for groups or classes protected from discrimination. The California Association of Realtors publishes Question and Answer style Memoranda on various subjects and in one titled, Property Management Frequently Asked Questions (Revised in January of 2013) a list is given which helps to illustrate the current law with regards to protected groups or classes: The list below is a list of some of the main categories which you CANNOT consider in evaluating a tenant:

2 1. Race 2. Color 3. Religion 4. Ethnic Background 5. National Origin 6. Familial Status which includes: o pregnant women o families with children o the age or sex of the children 7. Age 8. Disability 9. Sexual Orientation 10. Whether or not the tenant s source of income comes from public assistance 11. Arbitrary choices based on a personal characteristic o for example you cannot have a no beard policy or an only people who wear uniforms to work provision 12. HIV infection 13. Gender Identity and expression 14. Marital Status 15. Ancestry 16. Breastfeeding and any medical conditions connected to breastfeeding 17. Religious grooming or clothing practices (Cal. Fair Housing and Employment Act, Cal. Gov t Code 1200 et seq., Fair Housing Act, 42 United States Code 3601 and et seq., Cal. Civ. Code 51.) This course is designed to provide the student with knowledge of fair housing, historically and in today s world. Fair housing terms and definitions, history, applications, examples and exceptions to fair housing laws will be covered. Fair housing is not an option, it is the law. As a resident of United States and a Real Estate Professional, knowledge and practice of fair housing laws and practices will enable you to live and do business in an ethical manner. Covered in this course are: FEDERAL HISTORY OF FAIR HOUSING THE CIVIL RIGHTS ACTS of 1866 and 1870 provided that all persons have the same right to make and enforce contracts, to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens. Cases have held that these laws prohibit refusing to sell lots to African Americans, a homeowners association s discriminatory interference with the sale of a home to a black person, racially motivated opposition to the construction of low-income housing and steering.

3 THE CIVIL RIGHTS ACT OF 1964, CRA of 1964, was the landmark legislation outlawing discrimination based on race, color, religion, sex or national origin. The CRA was initiated by President John F. Kennedy. It was signed into Law on July 2, 1964 by President Lyndon Johnson. The Act ended institutionalized racism in the United States a century after the slavery s abolishment. The Act was originally conceived to protect the rights of black men. The bill was amended to protect the civil rights of women. The CRA of 1964 transformed American society. It prohibited discrimination in public facilities, in government and in employment. The Jim Crow laws in the South were abolished and it was illegal to compel segregation of the races in schools, housing or hiring. Major features of the Civil Rights Act of 1964 are: Title I: Barred unequal application of voter requirements, but did not abolish literacy requirements sometimes used to disqualify certain individuals or groups. Title II: Outlawed discrimination in areas of public accommodation engaged in interstate commerce. While exempting private clubs, it did not define private clubs. Title III: Encouraged the desegregation of public schools and authorized the U.S. Attorney General to file suits to force desegregation. Title IV: Provided for the desegregation of public schools. Title V: Extended the Commission on Civil Rights Title VI: Guaranteed equal protection for blacks in federally funded programs by prohibiting discrimination on the basis of race, color or national origin in programs and activities that receive federal financial assistance. Title VII: Provided for equal employment opportunity. THE VOTING RIGHTS ACTS OF 1965 signed into law by President Johnson on August 6, 1965, enforced the fifteenth amendment to the United States Constitution. This act made literacy test illegal. However, racial discrimination was still common in many neighborhoods. The 1964 law protected the constitutional rights of all Americans and enforced provisions preventing discrimination at the federal level, but the Civil Rights Act did not extend to the housing market. Housing rights would soon get attention. As veterans began to return from Vietnam, they discovered that racial preferences barred those of color from living in neighborhoods of their choice. Meanwhile, a series of marches led by Dr. Martin Luther King, Jr., in Chicago in accompanied by nationally broadcasted images of white outrage - finally put the issue of fair housing firmly on the political map.

4 Even so, while Congress had discussed a fair housing bill through much of the mid-1960s, not much had been done to make it a reality. That changed following Dr. King s assassination on April 4, While the nation mourned the murdered activist and angry riots raged in America s cities, President Lyndon Johnson, sensing that the time was right, pushed Congress to pass the Act. On April 11, 1968, just one week after Dr. King was shot, the UNITED STATES CIVIL RIGHTS ACT OF 1968, also known as the FEDERAL FAIR HOUSING ACT was finally put into law. Title VIII of the Act of 1968, was amended in The Act now prohibits discrimination on the basis of race, color, religion, sex, handicap, familial status or national origin in the sale or rental of housing. Prohibited acts include: Refusing to sell or rent, after a bona fide offer has been made Discriminating on terms, conditions or privileges of a sale or lease or in providing services or facilities Indicating any preferences in advertising or statements, oral or written False representation as to the availability of a dwelling unit including channeling and steering to a particular neighborhood Attempting to persuade owners to sell or rent dwellings by making representations about the entry into the neighborhood of certain classes of people. The first reported decision applying new enforcement of this amended act was HUD v. Blackwell, settled in Gordon Blackwell, a real estate broker, owned a single family home in Georgia. The home was shown to Mr. and Mrs. Herron, a black couple. Blackwell and the Herrons never met, as all negotiations were done through Blackwell s and Herrons agents. Negotiations were completed and a contract was agreed upon. After the contract was agreed upon, Blackwell asked the brokers if the Herrons were black. The brokers stated that he (Blackwell) was not allowed to ask that question. A few days later, Blackwell attempted to cancel the contract and then refused all contact with the brokers or the Herrons. Blackwell then showed the property to a white couple, the Coopers, and entered into a lease option agreement with them. Blackwell described the Coopers as good, white tenants. The Coopers were told about the previous contract and assured that it had been

5 cancelled. The Herrons complained to HUD. An administrative law judge assessed Blackwell over $85,000 in damages and civil penalties. Enforcement and Remedies The Federal Fair Housing Act Who may sue under the Act: 1. The Department of Housing and Urban Development, HUD 2. The U.S. Attorney General 3. Private Parties 4. State agencies, when the matter has been turned over to them by HUD. Choice of Administrative Proceedings: 1. Any person who is the victim of housing discrimination may file an administrative complaint with HUD or file a lawsuit in federal court or both 2. If the person elects to file an administrative complaint, and HUD finds reason to believe that there has been a violation of the federal fair housing laws, either the complainant or the respondent can elect to have HUD prosecute the matter in federal court or before an administrative law judge. Penalties and legal remedies (penalties and remedies subject to change): 1. If action brought by HUD: a. Civil penalties of up to $10,000 for first time offenders b. Civil penalties of up to $25,000 for second discriminatory practice within last 5 years c. Civil penalties up to $50,000 if more than two discriminatory practices within the last 7 years. d. If the same natural person (not a corporation or firm) committed the acts, then the $25,000 or $50,000 sanctions may be used if the violations ever occurred without regard to the 5 and 7 year periods. e. Injunctive relief f. Attorney s fees. 2. If action is brought by the Attorney General: a. Damages to aggrieved persons b. Civil penalties of up to $50,000 for the first violation c. Civil penalties of up to $100,000 for any subsequent violations d. Injunctive relief e. Attorney s fees. 3. If action is brought by private parties: a. Actual and punitive damages b. Injunctive relief c. Attorney s fees.

6 EQUAL CREDIT OPPORTUNITY ACT, effective in 1975, prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age or because an applicant receives income from a public assistance program. When a person applies for credit, a creditor may not ask you to reveal your sex, race, national origin or religion. When applying for a home loan, a creditor may ask you to voluntarily provide this information to be used by federal agencies to enforce anti-discrimination laws. Home loan applicants may also be asked about residence or immigration status. Questions regarding age may only be asked for two reasons: 1. applicant may be too young to sign contracts 2. applicant may be 62 or older, and the creditor will favor the applicant due to age. A creditor may ask about marital status if the applicant lives in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas) or if applying for a joint account or one secured by property. Credit applicants who feel they have been discriminated against my file a complaint and/or lawsuit. The Department of Justice may file a lawsuit under ECOA where there is a pattern or practice of discrimination. The Department may file suit under both the Fair Housing Act and ECOA. Complaints regarding ECOA, involving residential property may be filed with HUD, by individuals. The AMERICANS WITH DISABILITIES ACT OF 1990 was signed into law by President George H. W. Bush. It is a comprehensive civil rights law for people with disabilities, as it provides protections similar to those afforded to individual on the basis of race, color, sex, national origin and religion. It derives elements from the Civil Rights Act. Discrimination against persons with disabilities is prohibited in employment, public services, telecommunications, public accommodations and commercial facilities. The Department of Justice separates the ADA s requirements in three areas: Title I: Employment practices by units of State and local governments Title II: Programs, services and activities of State and local governments Title III: Public accommodations and commercial facilities. In 2000, the U.S. Attorney General s office filed suit against Hoyts Cinemas for violating the ADA. Accessible wheelchair seating was placed at the very front of the theaters, with stadium style seating, resulting in distorted and uncomfortable viewing for wheelchair users. The lawsuit challenged the failure to provide persons with disabilities seating locations and lines of sight comparable to those of the general public. Regal Entertainment Group (which is the largest

7 movie theater chain in the country) acquired most of Hoyts movie theaters in Regal agreed to make changes to nearly 1000 existing stadium style theaters, by moving wheelchair seating further back from the screen. Regal also will construct future theaters in accordance with design requirements that place wheelchair seating near the middle of the theater. Through lawsuits and both formal and informal settlement agreements the Department of Justice has achieved greater access for individuals with disabilities in thousands of cases. Under general rules, governing lawsuits brought by the Federal Government, the Department of Justice may not file a lawsuit unless it has first unsuccessfully attempted to settle the dispute through negotiations. The primary goal of the Justice Department s enforcement program is to increase voluntary compliance through technical assistance and negotiation. The Department will take legal action, however, when entities continue to resist complying with the law. The ADA has resulted in a surprisingly small number of lawsuits, only about 650 in five years. That is tiny compared to the 6 million businesses, 666,000 public and private employers and 80,000 units of state and local governments that must comply. The Department of Justice may file lawsuits in Federal Court to enforce the ADA and may obtain court orders including compensatory damages and back pay to remedy discrimination. Under Title III, the Department may also obtain civil penalties of up to $55,000 for the first violation and $110,000 for subsequent violations. I. CALIFORNIA HISTORY OF Fair Housing In California, Fair Housing was slow to become accepted. THE UNRUH CIVIL RIGHTS ACT OF 1959 was proposed by Assemblyman W. Byron Rumford, along with the creation of the FAIR EMPLOYMENT PRACTICES COMMISSION. The Act protects California residents from discrimination from businesses, which included housing providers such as hotels, motels, broker-sellers, and property managers. The Act stated: all persons within the jurisdiction of the state are free and equal, and entitled to the full and equal accommodations, advantages, facilities and privileges or services in all business establishments of any kind whatsoever. The courts have been applied the term business to include virtually every type of housing accommodation, as the Act applies to operators of hotels and motels, real estate brokers and agents and others engaged in the sale or rental of real property, owners of triplexes, duplexes, non-owner occupied single-family dwellings, public assisted housing projects, operators of mobile home parks and condominium homeowners associations. The Act prohibits discrimination on the basis of race, color, religion, sex, national origin, ancestry or disability. Protection included in the UNRUH ACT covers a broader base of people than California s FEHA because UNRUH ACT has been held by the courts to prohibit arbitrary

8 discrimination on the basis of personal characteristics or traits. Housing for seniors, also known as housing for older Americans is exempt from certain aspects of this law. ENFORCEMENT AND REMEDIES UNRUH ACT Who may sue: 1. Private parties Penalties and legal remedies: 1. Actual damages 2. Punitive damages of up to three times damages, but not less than $1,000 for each offense 3. Attorney s fees. Then in 1963, Assemblyman Rumford proposed another civil rights bill aimed at fair housing, RUMFORD ACT. This Act is also known as the FAIR EMPLOYMENT AND HOUSING ACT in California. The Rumford Act prohibits discrimination in sale, rental, lease, negotiation or financing or housing based on race, color, creed or national origin. It was later amended to add sex, marital status, familial status, disability, sexual orientation, ancestry and source of income. FEHA prohibits retaliatory eviction of a person seeking to uphold rights under FEHA. FEHA prohibits the refusal to reasonably accommodate a disabled person. ENFORCEMENT AND REMEDIES RUMFORD ACT Who may sue: 1. Private parties 2. The California Attorney General 3. The Department of Fair Employment and Housing Penalties and legal remedies 1. Injunctive relief (requiring the sale or rental of the subject property) 2. Actual damages 3. Civil penalties not to exceed $10,000 for a first violation; not to exceed $25,000 for a second violation within the past five years: and not to exceed $50,000 if two or more violations within a seven year period. The following year an overwhelming majority of Californians voted in favor of PROPOSITION 14 to repeal the progressive Rumford Act. Proposition 14 became the focal point of the 1964 election. Proposition 14 sought to prohibit the state and its agencies and local governments from

9 denying, limiting or abridging the right of an individual to decline to sell or rent his residential property to anyone as he chooses. In 1966, the California Supreme Court found the proposition to be unconstitutional. The proposition was found unconstitutional the United States Supreme Court. The Rumford Act or FEHA, again became law in California. CALIFORNIA CIVIL CODE SECTIONS BLIND AND OTHER PHYSICALLY DISABLED PERSONS states that individuals with disabilities are entitled to the same right as the general public to the full and free use of public places. It also states that blind, handicapped and disabled persons may not be discriminated against in the provision of housing accommodations. Owners cannot refuse to allow tenants to make reasonable modifications if they will restore the premises to their original condition upon movement. Furthermore, owners cannot refuse to make reasonable accommodations to afford equal use to facilities. Guide and service animals may not be discriminated against. ENFORCEMENT AND PENALTIES CA. CIVIL CODE Who may sue: 1. The City Attorney 2. The District Attorney 3. The Department of Rehabilitation through the Attorney General 4. Private Parties. Penalties and Remedies 1. Actual Damages 2. Punitive damages not less than $ Attorney s fees 4. Injunctive Relief. CALIFORNIA BUREAU OF REAL ESTATE REGULATIONS #2780. Discriminatory conduct as the Basis for Disciplinary Action Prohibited discriminatory conduct by a real estate licensee based upon race, color, sex, religion, ancestry, physical handicap, marital status or nation origin includes, but is not limited to the following: (a) Refusing to negotiate for the rental, sale or financing of the purchase of real property or otherwise making unavailable or denying real property to any person. (b) Refusing or failing to show, sell, rent 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, religion, color, marital status, sex, ancestry, physical handicap 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.

10 It does not constitute discrimination under this subdivision for a real estate licensee to refuse or fail to show, sell, rent or finance the purchase of real property to any person having a physical handicap because of the presence of hazardous conditions or architectural barriers to the physically handicapped which conform to applicable state or local building codes and regulations, (c) Discrimination against any person in the sale or purchase or negotiation or solicitation of the sale or purchase or the collection of payment or performance or service in connection with contracts for the sale of real property or in connection with loans secured directly or collaterally by liens on real property or on a business opportunity. Prohibited discriminatory conduct by a real estate licenses under this subdivision does not include acts based on a person s marital status which are reasonably taken in recognition of the community property laws of this state as to the acquiring, financing, holding or transferring of real property. (d) Discrimination against any person in the terms, conditions or privileges of sale, rental, or financing of the purchase of real property. This does not prohibit the sale price, rent or terms of a housing accommodation containing facilities for the physically handicapped to differ reasonably from a housing accommodation not containing such facilities. (e) Discrimination against any person in providing services or facilities in connection with the sale, rental or financing of the purchase of real property, included but not limited to: processing applications differently, referring prospects to other licensees, using with discriminatory intent or effect, codes or other means of identifying minority prospects or assigning real estate licensees on the basis of discriminatory means. This does not include a person s marital status, which are reasonably taken in recognition of state community property laws. (f) Representing to any person that real property is not available for inspection, sale or rental when such real property is in fact available. (g) Processing an application more slowly or otherwise acting to delay, hinder or avoid the sale, rental or financing of the purchase of real property of a potential owner or occupant. (h) Making any effort to encourage discrimination against persons in the showing, sale, lease or financing of real property. (i) 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.

11 (j) Making any effort to obstruct, retard or discourage the purchase, lease or financing of the purchase of real property by persons who differ from that of the majority of persons residing in a structural improvement to real property or in an area in which real property is located. (k) 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; however nothing shall limit the administering of forms or the making of a notation required by a federal, state or local agency for data collection for civil rights enforcement purposes: or in the case of a physically handicapped person, making a notation, asking questions or circulating and written or oral statement in order to serve the needs of such a person. (l) Making any effort to coerce, intimidate, threaten or interfere with any person in the exercise or enjoyment of, or on account of such person s having aided or encouraged any other person in the exercise or enjoyment of any right granted or protected by federal or state law, including but not limited to assisting in any effort to coerce any person 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: 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. (m) Soliciting of sales, rentals or listings of real estate from any person, but not from another person within the same area because of differences. (n) Discriminating in informing persons of the existence of waiting lists or other procedures with respect to the future availability or real property for purchase or lease. (o) 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. (p) Making any effort to discourage or prevent any person from renting, purchasing or financing real property because of the presence or absence or occupants of a particular race, color, etc. or on the basis of the future presence or absence of a particular race, color, etc., whether actual or implied. (q) Providing information or advice to any person concerning the desirability of particular property or a particular residential area(s) which is different from information provided to another person. (r) Refusing to accept a rental or sales listing or application for financing of the purchase of real property on a discriminatory basis.

12 (s) Entering into an agreement, or carrying out any instructions of another, explicit or implied, not to show, lease, sell or finance the purchase of real property which are discriminatory. (t) Making, printing, publishing or causing to be made, published or printed any notice or advertising concerning the sale, lease or financing of real property which contain discriminatory statements. (u) Using any words, phrases, sentences, descriptions or visual aids in any notice, statement or advertisement describing real property which indicate discriminatory preferences or limitations. (v) Selectively using, placing or designing any notice, statement or advertisement having to do with the sale, rental or financing of the purchase of real property in such a manner as to cause or increase discriminatory practices. This does not limit the use of an affirmative marketing program. (w) Quoting or charging a rent, price or cleaning or security deposit for a particular real property to any person which is different from the price, rent, cleaning or security deposit charged to another person because of protected differences. This does not prohibit the quoting or charging of a price, rent or cleaning or security deposit for housing accommodations which differ reasonably from other accommodations. (x) Discrimination against any person in performing any acts in connection with the making of any determination of financial ability or in the process of any application for financing or refinancing of real property. (y) Advising a person of the price or value of real property on a discriminatory basis of the residents or potential residents of the area in which the property is located. (z) Discrimination in the treatment of or services provided to occupants of any real property in the course of providing management services for real property. (aa) Discriminating against the owners or occupants of real property because of the race, color, sex, religion, national origin, physical handicap, or marital status of their guests, visitors or invitees. (bb) Making any effort to instruct or encourage licensees, employees or other agents to engage in any discriminatory act. (cc) Establishing or implementing rules which are discriminatory through a multiple listing or other real estate service.

13 (dd) Assisting or aiding in any way, any person in the sale, rental or financing of the purchase of real property, where there are reasonable grounds to believe that such persons intends to discriminate Panic selling as the Basis for Disciplinary Action This section prohibits discriminatory conduct including, but not limited to, soliciting sales or rental listings, making written or oral statements creating fear or alarm, transmitting written or oral warnings or threats, or acting in any manner so as to induce or attempt to induce the sale or lease of real property through any representation, express or implied, regarding the present or prospective entry of one or more persons of another race, color, sex, religion, physical handicap, ancestry, marital status or national origin into an area or neighborhood. THE HOUSING FINANCIAL DISCRIMINATION ACT OF 1977, which is also known as HOLDEN ACT of the California Health and Safety Codes, section , has two parts: 1. Act prohibits financial institutions from discrimination in providing financial assistance, based on race, color, religion, sex, marital status, ancestry or national origin. 2. The act applies to money for home improvement loan for non-owner and owner occupied properties and for purchase money loan for owner occupied residential properties of 1 to 4 units. ENFORCEMENT AND PENALTIES HOLDEN ACT Who may sue: 1. Private Parties 2. California Business,Transportation and Housing Authority. Penalties and legal remedies 1. Requiring the financial institution to make the loan 2. Damages of up to $1, State treasurer will no longer deposit state funds into that institution 4. Attorney s fees. HOME MORTGAGE DISCLOSURE ACT, also known as HMDA of California Health and Safety Code, Sections affects all lenders who are in the business of originating residential loans. This act requires lenders to report loans that they make, by census tract numbers, to the state agency governing their jurisdiction. CONSUMER CREDIT REPORTING AGENCIES ACT applies to agencies initiating and using credit reports, such as landlords and property managers. All agencies must act with fairness, impartiality and a respect for the consumer s right to privacy. If credit is denied, the consumer must be supplied with name and address of the credit reporting agency, the right to obtain a copy of said report and the right to dispute said report.

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