CATEGORY: Fair Housing

TITLE: A Group Home For Handicapped Persons Is Covered By The Fair Housing Act

 FACTS: The brokerage recently accepted a listing for a property located near a group home for recovering alcoholics and drug addicts.  The seller is concerned about potential liability for not disclosing the group home to prospective buyers.

ISSUE: Can the group home be disclosed to prospective buyers by the seller or listing agent?

ANSWER: No.

DISCUSSION:

The Fair Housing Act (the “Act”) prohibits discrimination against a person with a disability or handicap in connection with the sale or rental of a dwelling.  Under the Act, “handicap” is defined as: (1) a mental or physical impairment that substantially limits at least one major life activity; or (2) a record of such impairment; or (3) being regarded as having such an impairment.  See 42 U.S.C. § 3602(h).  Recovering from alcoholism and drug addiction is considered a handicap.  Therefore, the seller and listing agent are prohibited from disclosing the group home in connection with the sale of the property.

CATEGORY: Commission

TITLE: Buyer And Seller May Not Change Commission Terms Without The Broker’s Consent

FACTS: The buyer and seller signed an Addendum to the Purchase Contract that amended the terms of the real estate agents’ commissions.

ISSUE: Can the buyer and seller change the terms of the agents’ commission through an Addendum to the Purchase Contract?

ANSWER: No.

DISCUSSION:

The buyer is not a party to the commission agreement and therefore cannot agree to alter the commission. Furthermore, the commission should never be negotiated in the Purchase Contract or an Addendum to the Purchase Contract. Only the seller and broker can change the terms of the commission agreed to under the Listing Agreement.

Reviewed May 2016

Over 100 years ago, in furtherance of its commitment to business integrity and fair dealing, the National Association of Realtors® (NAR) adopted its Code of Ethics. The Code of Ethics defines, guides, and regulates the professional conduct of Realtors® and demonstrates REALTORS’® level of commitment, emphasis on education and dedication to their profession. The Arizona Association of REALTORS® (AAR) is responsible for enforcing the Code of Ethics.

Among the core principles of the code is a promise to provide equal professional service to all clients and customers. Article 10 of the Code of Ethics therefore prohibits Realtors® from discriminating practices and requires that equal professional services be provided to all individuals as part of a Realtor’s® commitment to fair housing.

Because NAR firmly believes in equal opportunities in housing, in November 2010, NAR’s Board of Directors passed an amendment to  Article 10 of the Code of Ethics prohibiting members from discriminating on the basis of sexual orientation. While the inclusion of sexual orientation was intended to be all-encompassing, NAR ultimately decided to add “gender identity” as a definitional clarification. Effective January 2014, Article 10 of the Code of Ethics therefore reads as follows:

Realtors® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.  Realtors® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation or gender identity. (Amended 1/14)

Realtors®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.  (Amended 1/14)

Moreover, Standard of Practice 10-3 was amended as follows:

Realtors® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, national origin sexual orientation, or gender identity. (Adopted 1/94, Renumbered 1/05 and 1/06, Amended 1/14)

The 2014 amendment to Article 10 therefore not only reaffirms NAR’s and AAR’s commitment to fair housing, it is also a reflection of our collective commitment to a market free of discrimination.

Fair Housing Resources from NAR

April 2014 marks the 46th anniversary of the 1968 landmark Fair Housing Act. Each year REALTORS® recognize the significance of this event and reconfirm our commitment to upholding fair housing law as well as our commitment to offering equal professional service to all in their search for real property.

Resources can be found here: http://www.realtor.org/programs/fair-housing-program

Editor’s Note: The Code of Ethics turns 100 in 2013. AAR will be celebrating the code with monthly articles published under the caption, Code Talk, in the Arizona REALTOR® Magazine, discussing the various ways the code governs professional conduct and interaction with the consumer in every day transactions. 

April 2013 marks the 45th anniversary of the 1968 landmark Fair Housing Act. Each year, REALTORS® recognize the significance of this event and reconfirm our commitment to upholding fair housing laws as well as our commitment to offering equal professional service to all in their search for real property.

If you have not read the Fair Housing Declaration in a while, I encourage you to do so.

Every real estate licensee in Arizona is required to take a minimum of three hours of continuing education in Fair Housing each renewal period, so you are already well versed in Fair Housing issues. What can AAR impart to our members regarding their duty to offer equal services to all and thereby provide consumers with equal opportunity in housing? Article 10 states:

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation (Amended 1/11).

You are therefore reminded that regardless of your client’s race, color, religion, sex, handicap, familial status, national origin or sexual orientation they are entitled to the same level of care and service that you take pride in offering.

In the March Code Talk column, members discussed the mechanics of listing agreements, ancillary forms for listings, MLS dissemination and advertising through the Internet as it pertains to the Code of Ethics. Standard operating procedure (SOP) 10-3 relates to listings, as well stating:  “REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, national origin, or sexual orientation,” (Adopted 1/94, Renumbered 1/05 and 1/06, Amended 1/11). 

Mary Lee Greason, a Tucson REALTOR® and Fair Housing educator, offered some sage words of advice: “In advertising our listings, we need to remember the advice I heard years ago from an attorney [who] prosecuted Fair Housing violations, ‘Stick to the amenities of the property and not the people who might live there!’”

The Department of Housing and Urban Development recently shared two scenarios which may constitute housing discrimination:

• A gay man is evicted because his landlord believes he will infect other tenants with HIV/AIDS.  That situation may constitute illegal disability discrimination under the Fair Housing Act because the man is perceived to have a disability, HIV/AIDS.

• A property manager refuses to rent an apartment to a prospective tenant who is transgender.  If the housing denial is because of the prospective tenant’s non-conformity with gender stereotypes, it may constitute illegal discrimination on the basis of sex under the Fair Housing Act.

Finally, a reminder that Article 10 and SOP 10-4 extends discrimination to cover employment in real estate offices:  As used in Article 10, “real estate employment practices” relates to employees and independent contractors providing real estate-related services and the administrative and clerical staff directly supporting those individuals. (Adopted 1/00, Renumbered 1/05 and 1/06). 

I would like to leave you with the following from the National Association of REALTORS®:

As REALTORS®, our success isn’t measured by the bottom line. It’s measured by the trust of our clients and customers and the esteem in which we’re held by our colleagues and competitors. The National Association was founded with the goal of uniting the real estate profession through high standards to protect buyers and sellers. 100 years after its adoption, the Code of Ethics continues to be what sets us apart as REALTORS®.

About the author:

Jan Steward brings a wealth of experience to the Arizona Association of REALTORS® as the Risk Management Specialist. She is a former title company manager and escrow officer with paralegal training. As a REALTOR® and broker, Jan served the Northern Arizona Association of REALTORS® (NAAR) as board president, vice-president, director, MLS chair, delegate to NAR’s national convention and a member of the Professional Standards and Grievance Committees. Jan was honored as REALTOR® of the Year by NAAR. She also has served on AAR’s Professional Standards Committee and a variety of ad hoc committees.