Author: ft Editorial Staff

Civil rights and fair housing laws

This article outlines the federal and California anti-discrimination laws and how the laws affect the rental of residential property. Property rights cannot be based on status All citizens of the United States have the right to rent real estate, regardless of race. [42 United States Code §1982] Further, all persons within the United States, legally or illegally, have the same rights to make and enforce contracts (rental and lease agreements), sue, be sued, and enjoy the full benefits of the law. All are subject to the same punishments, penalties, taxes and licenses, regardless of race. [42 USC §1981] The Civil Rights Act applies to racial discrimination on the rental of all types of real estate, both residential and nonresidential. Thus, the right to lease real estate is protected by giving all persons the right to make and enforce contracts, regardless of race. Thus, racially motivated activities in any real estate leasing transaction are prohibited. The Civil Rights Act protects against racial discrimination in all activities between persons, and is much broader than the protection under the Federal Fair Housing Act, which is limited to dwellings. Anti-discrimination legislation for residential property The Federal Fair Housing Act (FFHA) prohibits unlawful discrimination in the rental or advertisement of dwellings for rent. [42 USC §§3601 et seq.] A dwelling includes any building or structure that is occupied, or designed to be occupied, as...

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Seniors-only housing

This article covers acceptable and unacceptable age discrimination in California housing. California’s fair housing laws A landlord of an apartment complex with an adults-only rental policy enters into a lease with a pregnant tenant. The lease contains a provision stating no person under 18 years of age can reside in the leased unit. The tenant gives birth prior to the expiration of the lease.   Civil rights and fair housing laws prohibit landlords from practicing discrimination when locating tenants for a property. The landlord immediately serves the tenant with a 3-day notice to remove the child from the premises or vacate. The tenant does neither. The landlord files an unlawful detainer to evict the tenant since the tenant remains in possession and has failed to perform under the notice. The tenant claims she cannot be evicted since the adults-only policy is an unlawful discriminatory practice and violates the child’s civil rights. Can the tenant avoid the landlord’s adults-only policy agreed to in the lease? Yes! The landlord cannot refuse to rent based on age unless the person can be excluded under senior citizen housing laws. The landlord’s adults-only policy violates California’s Unruh Civil Rights Act. [Marina Point, Ltd. v. Wolfson (1982) 30 C3d 721] Civil rights and fair housing laws prohibit landlords, property managers and leasing agents from practicing any discrimination (which is prohibited because of the protected status...

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Due-on waiver and the carryback seller

This article discusses the need for carryback sellers to negotiate a waiver of the senior lender’s due-on clause on a sale subject to its trust deed loan. Prior planning prevents a call A seller of real estate encumbered with a first trust deed lists the property for sale with his broker. The trust deed contains a due-on clause. Later, the broker presents the seller with a purchase offer from a buyer on terms which include: a cash down payment; an assumption of the existing first trust deed by the buyer; and a carryback note executed by the buyer in favor of the seller for the balance of the purchase price, to be secured by a second trust deed on the property. The seller accepts the offer, and a sales escrow is opened. As part of their instructions, escrow then requests a loan assumption package from the lender who holds the note secured by the existing trust deed.Before the close of escrow, the lender approves the sale on one condition: the buyer assumes the loan obligation and agrees to a modification of the interest rate and payment schedule in the note.   By consenting to the conveyance of secured property, the lender has, by its conduct, waived its rights under the due-on clause. The buyer agrees to the lender’s demands and signs a loan assumption and note modification agreement. The...

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The broker’s use of supervisors

This article explains the broker’s continuing responsibilities when delegating his supervisory duties to an office manager or transaction coordinator. Supervision delegated, not agency A salesperson employed by a broker is the agent of the broker, not the client. In turn, the broker is the agent of the client. As an agent representing the broker, a real estate salesperson is authorized to prepare listings, sales documents, disclosure sheets, etc., on behalf of the broker.   The broker may employ others to carry out his supervisory responsibility to review documents and maintain files. The DRE’s supervisory scheme requires the broker to reasonably supervise a salesperson’s activities. Reasonable supervision includes establishing policies, rules, procedures and statements to review and manage: transactions requiring a real estate license;   documents having a material effect upon the rights or obligations of a party to the transaction;   the filing, storage and maintenance of documents;   the handling of trust funds;   the advertisement of services that require a license;   the salesperson’s knowledge of anti-discrimination laws; and   the reports of the activities of the salespersons. [Department of Real Estate Regulation §2725] The broker may employ others to carry out his supervisory responsibility to review documents and maintain files, including: another licensed real estate broker; or a real estate salesperson employed by the broker. [DRE Reg. §2725] The review of documents and file maintenance should not just be a mechanical function...

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Community property

This article discusses the effect a marriage has on a spouse’s ability to sell real estate. The broker’s role A broker who represents a married person in the sale, lease or financing of community real estate must know whether the married person can avoid performing under a listing (paying the brokerage fee) or under a transactional purchase agreement (closing escrow) by raising community property defenses in order to inflict a loss on the broker. For example, a broker obtains an exclusive right-to-sell listing signed only by the wife. The real estate listed is community property, vested in the name of the husband and wife as joint tenants. During the listing period, the husband and wife sell the property without the aid of the listing broker. The listing entitles the broker to a fee if the property is sold by anyone during the listing period. [See first tuesday Form 102 §4.1(a)] The broker claims both the husband and wife are liable for the brokerage fee since the property was sold during the listing period. The wife claims the listing is unenforceable without the husband’s signature since the property listed cannot be sold and conveyed without her husband’s written consent.  Is the broker entitled to his fee? Yes! While the husband, who did not sign the listing agreement, is not personally liable for the brokerage fee, the wife is liable for...

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Zestimates are great conversation starters with sellers and buyers. Zillow has done more for our bottom line than NAR ever has or will. Don’t fight the current of the river, learn to run with it. Disruption is inevitable in any industry that is fragmented or inefficient. Granted, it does feel like armchair experts and platforms are plentiful in real estate these days, but when the tide rolls out we will see the value proposition of the truest professionals in this industry shine once again.

Justin Bonney, on Zillow’s impact on the real estate industry

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