The Basics Aren’t Just for Rookies

by Chicago Agent

Take the time to remember the basic legal issues that agents face daily

When it comes to legal issues, the same rules apply for rookie agents and veteran experts. The only difference is that for rookies, this information is fresh and new. In this difficult market, agents are preoccupied with the specifics of getting homes sold and making clients happy. While your licensing renewal exams will remind you of some of the important rules, knowing the basic legal issues is always imperative to keep you out of trouble.

Below is a brief overview of some of the most important legislative and regulatory issues that affect real estate, according to the National Association of Realtors (NAR). The issues below are mainly federal legal issues, pertaining to Realtors across the country. For more specific state information, contact your local association or a local real estate attorney to learn more about rules specific to Illinois

ADA. The Americans with Disabilities Act is a federal law that makes it unlawful to discriminate against people with disabilities. Title I contains provisions for accommodating the disabled in the workplace, which affects real estate offices and association offices with at least 15 employees. The legal definition of an employee is determined on a case-by-case basis, and the federal statute does not apply to independent contractors. Title III requires accommodations for the disabled to access public places, which also affects association offices, real estate offices and commercial facilities.

ANTITRUST. Antitrust laws are designed to ensure competition and prevent monopolies and agreements to restrain trade. The nature of the real estate industry makes agents particularly susceptible to antitrust issues. Agents vigorously compete to secure property listings to offer for sale, but they also regularly cooperate with one another to complete a transaction. This duality of competition and cooperation, which exists in few other professions, presents frequent opportunities for antitrust misconduct, whether intentional or inadvertent. Brokers must be particularly conscious of abiding by the requirements of antitrust law.

FAIR HOUSING. Fair housing laws were created to eliminate discriminatory behavior from the housing market. There are both federal and state fair housing laws, and most of these laws apply equally to the sale and rental of property. The federal fair housing laws prohibit housing discrimination based on race, religion, national origin, sex, handicap and familial status. The laws prohibit conduct such as the refusal to sell or rent housing for discriminatory reasons; steering, which means influencing a person’s housing choice toward a certain neighborhood based on a discriminatory purpose; and blockbusting, defined as creating sales by playing on discriminatory fears of a community that people of a certain group are moving into the area. For more on Fair Housing, turn to page 20.

ILLINOIS RADON AWARENESS ACT. An entirely local issue, the Illinois Radon Awareness Act went into effect January 1, 2008. The Illinois Radon Awareness Act and the Illinois Real Property Disclosure Act requires that a seller must disclose information if aware of unsafe concentrations of radon in the home that is being sold. The acts do not require that testing or remediation work be conducted; however, many relocation companies and lending institutions, as well as homebuyers, request a radon test when purchasing a house. Sellers and brokers are cautioned to err on the side of full disclosure of material facts prior to entering into a purchase agreement.

LEAD-BASED PAINT. The federal Residential Lead-Based Paint Hazard Reduction Act of 1992 and the subsequent regulations enacted by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Environmental Protection Agency (EPA) generally apply to sale or lease transactions of residential property constructed before 1978. Sellers and lessors of housing to which the regulations apply must provide a federal pamphlet of information on the risks of lead paint and perform other duties, including disclosing all known lead-based paint on the property and providing all testing reports. Any agent hired to market the property must ensure that the seller or lessor complies with the requirements. A buyer also has the right to conduct lead-based paint testing on the property.

RESPA. The Real Estate Settlement Procedures Act was enacted by Congress in 1974 with the goal of providing consumers with various protections in the homebuying processes and also to reduce the cost of homeownership. RESPA focuses on services provided in connection with the settlement of a federally insured mortgage loan. It regulates “abusive” practices by outlawing unearned fees and kickbacks and requires that consumers be provided with information about the settlement process and full disclosure of associated fees.

TELEMARKETING. Federal telemarketing, or do-not-call, rules prohibit a real estate professional from making cold-calls to a consumer who has a phone number registered on the National Do-Not-Call Registry. The rules do contain some exceptions, such as allowing real estate professionals to contact someone they have done business with in the past 18 months. The federal rules preempt state telemarketing laws where the state laws are less restrictive, but not state laws that are more restrictive.

For more information on any of the above, Visit Realtor.org, or contact the NAR Legal Affairs department. The attorneys employed by NAR provide legal counsel to NAR leadership, committees and staff, as well as state and local associations, on the programs and policies of the association.

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