Free Real Estate Sales Fair Housing and Disclosures Questions and Answers — Questions and Answers
Question 1: A real estate agent is creating an advertisement for a new listing. Which of the following phrases would be a violation of the Fair Housing Act?
- "Great for a growing family"
- "Features a master bedroom"
- "Located in a quiet, residential area"
- "Ideal for young professionals" (Correct answer)
Correct answer: "Ideal for young professionals"
The Fair Housing Act prohibits advertising that indicates a preference, limitation, or discrimination based on protected classes. While phrases like "great for a growing family" (familial status) can be problematic, "ideal for young professionals" is a more direct violation as it implies a preference based on age, which, although not a federal protected class, is often covered by state and local laws and considered discriminatory by HUD as it discourages families and older individuals. Descriptions of the property itself, like "master bedroom" or "quiet, residential area," are generally acceptable.
Question 2: A prospective buyer asks their agent to only show them homes in neighborhoods where the residents are predominantly of a specific national origin. By agreeing to this request, the agent would be engaging in the illegal practice of:
- Blockbusting
- Redlining
- Steering (Correct answer)
- Panic peddling
Correct answer: Steering
Steering is the illegal practice of guiding or directing homebuyers towards or away from certain neighborhoods based on their race, national origin, or another protected characteristic. Blockbusting (or panic peddling) involves inducing homeowners to sell by suggesting that the entry of a protected class will lower property values. Redlining is the discriminatory practice by lenders of refusing to make loans in specific geographic areas.
Question 3: Under the federal Residential Lead-Based Paint Hazard Reduction Act, which of the following is TRUE regarding the sale of a home built in 1975?
- The seller is required to remove all known lead-based paint before closing.
- The buyer must be given a 10-day opportunity to conduct a lead paint inspection. (Correct answer)
- The law does not apply because the home was built after 1978.
- The real estate agent is solely responsible for providing the required disclosures.
Correct answer: The buyer must be given a 10-day opportunity to conduct a lead paint inspection.
The Residential Lead-Based Paint Hazard Reduction Act of 1992 applies to most housing built before 1978. The law requires that sellers provide buyers with a 10-day period to conduct a lead paint inspection or risk assessment at their own expense. The seller is not required to remediate or remove the paint, only to disclose any known information and provide available records. Both the seller and the agent share responsibility for ensuring compliance with the disclosure requirements.
Question 4: A landlord owns a four-plex and lives in one of the units. She refuses to rent to a family with children, claiming an exemption under the Fair Housing Act. Which statement is correct?
- The landlord is exempt under the 'Mrs. Murphy' exemption.
- The landlord is in violation of the Fair Housing Act. (Correct answer)
- The exemption applies because she does not own more than three single-family homes.
- The exemption is valid as long as she does not use a real estate agent.
Correct answer: The landlord is in violation of the Fair Housing Act.
The 'Mrs. Murphy' exemption allows owner-occupants of buildings with four or fewer units to be exempt from certain Fair Housing Act provisions, but it NEVER allows for discrimination based on race. More importantly for this scenario, the exemption does not apply if discriminatory advertising is used or if the owner's refusal is based on familial status when a real estate agent isn't involved. However, the 1988 Fair Housing Amendments Act, which added familial status and disability as protected classes, made it so the familial status protection applies in this case, making the landlord's refusal a violation. The most critical point is that even when some exemptions might seem to apply, they are narrow, and discrimination against families with children is broadly prohibited.
Question 5: Which of the following is a requirement for commercial properties under Title III of the Americans with Disabilities Act (ADA)?
- All existing commercial buildings, regardless of age, must be immediately upgraded to meet all current ADA standards.
- Newly constructed commercial facilities must be readily accessible to and usable by individuals with disabilities. (Correct answer)
- The ADA's requirements apply only to government-owned and operated public facilities.
- Residential properties with five or more units are covered under Title III of the ADA.
Correct answer: Newly constructed commercial facilities must be readily accessible to and usable by individuals with disabilities.
Title III of the Americans with Disabilities Act (ADA) mandates that newly constructed commercial facilities and places of public accommodation must be designed and built to be readily accessible to and usable by individuals with disabilities. While existing buildings are required to remove architectural barriers when it is 'readily achievable,' they are not necessarily required to meet all current standards immediately. The ADA applies to private entities that own, lease, or operate places of public accommodation, not just government facilities. Residential properties are generally covered by the Fair Housing Act, not Title III of the ADA.
Question 6: A seller completes a state-mandated property condition disclosure statement. After the buyer has received the form and the parties have signed the purchase contract, the seller discovers a new, significant leak in the roof. What is the seller's obligation?
- The seller has no further obligation as the disclosure was accurate when completed.
- The seller should repair the leak but is not required to inform the buyer.
- The seller is only required to disclose the new defect if the buyer specifically asks.
- The seller must amend the disclosure statement or otherwise inform the buyer of the newly discovered defect. (Correct answer)
Correct answer: The seller must amend the disclosure statement or otherwise inform the buyer of the newly discovered defect.
Most state disclosure laws require sellers to provide truthful and accurate information based on their knowledge at the time of completion. If a seller discovers a new material defect after the disclosure has been delivered but before closing, they have a duty to update the disclosure or otherwise inform the buyer in writing. Failure to disclose the new information could be considered misrepresentation. The discovery of a new material fact changes the conditions upon which the buyer's offer was based.
Free Real Estate Sales Fair Housing and Disclosures Questions and Answers
A real estate agent is creating an advertisement for a new listing.
Which of the following phrases would be a violation of the Fair Housing Act?