We’re still scratching our heads over this one: Housing Wire’s article, “When your realtor goes mum. . .here’s why” recently tried to pass off this egregious fallacy as truth:
“Some common questions agents will have to turn away are:
1. Is this area safe?
2. What kinds of people live in the building/neighborhood?
3. Is this place family-friendly?
4. Are the schools good?
5. Is this a liberal or conservative area?
6. Is the seller/buyer (old, young, single, married, Hispanic, gay, etc.)?
7. Are there kids in the neighborhood?
8. What are the best neighborhoods to live in?
Answering these questions could constitute a violation of the Fair Housing Act of 1968.”
The Fair Housing Act of 1968 was a cornerstone of the Civil Rights Movement. It’s imperative real estate professionals understand both the spirit and the letter of this law in order to continue the progress that began in 1968.
The Fair Housing Act prohibits the use of a person’s race, color, religion, sex, handicap, familial status or national origin as a reason for:
- refusing to sell or rent;
- discriminating against any person in the terms or conditions of a sale or lease;
- making and/or distributing any advertising that discriminates against any person;
- claiming a dwelling is not available for rent or sale when it in fact is; and
- inducing someone to sell their property.
There is nothing — not a hint, touch, implication, innuendo, insinuation or allusion — in the law that bars a real estate agent from providing demographic information to their client. There is certainly nothing in the law that prohibits agents from opining on the safety or suitability of a particular neighborhood. Quite the opposite is true.
A real estate agent owes a duty to their client to disclose all material facts affecting the value and desirability of a property. Further, a real estate agent is to counsel their client to the best of their ability based on the full scope of their education and experience. [Calif. Civil Code §2079.16; Field v. Century 21 Klowden-Forness Realty (1998) 63 CA4th 18]
Of course, this does not give any agent carte blanche to espouse their personal opinions, racist, sexist or otherwise. The key term in all of this discussion is, material facts. When asked, “is this area safe?”, direct your client to one of the many websites that publishes local crime rates, in addition to providing your state-mandated Megan’s Law disclosures. If your client inquires, “is this area liberal or conservative?”, simply do the research and provide them the results of the most recent election. The potentially tricky question to answer, “what kind of people live in this neighborhood?” is easily dispatched by a true professional. A little digging on the Census Bureau web site and your client will be swimming in material facts about the demographics of their potential neighbors.
Seller’s agents ought to use caution when considering publishing demographics information in their listing advertisements. The Fair Housing Act explicitly forbids an individual from expressing any preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status or national origin in any form of housing advertising. Rather than risk an uncharitable interpretation of your advertising, save the hard demographics facts for when your client makes a direct inquiry.
The only question listed above that may be off limits is number 6: “Is the seller/buyer (old, young, single, married, Hispanic, gay, etc.)?” An agent is not required to disclose any information that may be deemed confidential by the other party if it does not materially affect the value or desirability of the property. The sexual preference or marital status of the owner/seller has no relevance to the value of a property and thus the agent ought not share it. [CC §2079.16]
Unfortunately, this author’s erroneous conclusions are indicative of the inherited misinformation and misconduct rampant in the real estate community. Such a gross misunderstanding of the law leads to an overcorrection on behalf of the agent, which ultimately prevents him or her from properly performing their duties. The same misconduct arises from the misperception that agents are barred from advising their clients about the legal and tax aspects of a real estate transaction.
Real estate brokers and agents have a duty to share the wealth of knowledge they’ve gained from their experience and state mandated education. If your client asks any of the questions listed above, do your best to provide a well-researched, reasonable and, above all else, factual response.