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REALTOR® Emeritus |  |  | | ||
|  Three Lines of Defense Against Risk Keeping Risks Under Control Controlling Transaction Risks Agency Disclosure Avoiding Antitrust Risks Minimizing Liability from Contracts Fair Housing Risks Controlling Personnel Risks Communications Policies to Minimize Risks Insuring Against Risks More Resources: Controlling Business Risks Code of Ethics: Controlling Business Risks | 2 Discrimination Cases: You Be the Judge Case Study 1: When a Client Violates the Law Facts: Mr. and Mrs. Banai hired a rental specialist employed by Manhattan Group Real Estate Inc. to rent a house they owned in Florida. She showed the home to an interested couple and called the Banais to let them know about the potential renters. The Banais asked if the couple was black, and when the rental specialist said they were, the Banais refused to rent the house to them. The rental specialists informed the Banais that their behavior was discriminatory, but called the prospective renters and told them they wouldn’t be able to rent the house after all. The rental specialist then reported the incident to her supervisor, and the company immediately terminated its listing agreement with the Banais. What do you think? Findings: The U.S. Department of Housing and Urban Development's administrative law judge found the Banais in violation of the Fair Housing Act and ordered them to pay $70,000 in damages to the complainants and a $10,000 civil penalty to HUD. The judge also found that by just answering the question about the complainants' race, the rental specialist had facilitated the Banais' discrimination, albeit not as willing accomplice. She was ordered to pay a $100 civil fine and to attend fair housing training. Since Manhattan employed the rental specialist, the company was vicariously liable for her actions, but no penalty was imposed because it immediately terminated the listing agreement with the Banais. This case emphasizes how careful licensees must be in responding to questions about classes of individuals protected under the Fair Housing Act. Case Study 2: Racial Steering Facts: Over a one-year period, sales associates for Matchmaker Real Estate showed black testers in Chicago homes that were below their price range in racially mixed areas and white testers homes that were above their price range in white neighborhoods. The broker had a written fair housing policy and required his sales associates to attend fair housing training, but he did not monitor their actions by keeping documentation relating to prospects' desired locations, locations actually shown, or price range. What do you think? Findings: The trial court found Matchmaker, its owner, and four sales associates guilty of steering prospective homebuyers according to their race. But because the broker had actively supported the fair housing laws, the appellate court overturned the trial court's punitive damage award against him and the company. However, the compensatory award was upheld. Cases adapted from Don’t Risk It: A Broker’s Guide to Risk Management, NATIONAL ASSOCIATION OF REALTORS®, 2000. Fair Advertising Practices > | |