Real Estate Practice and Fair Housing
Day-to-day practice combines marketing, ethics, and strict compliance with federal fair housing and antitrust laws. This topic tests the conduct rules that keep brokers and their clients out of legal trouble.
Federal Fair Housing Law
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, sex, national origin, disability, and familial status. Illegal practices include steering buyers toward or away from areas based on protected class, blockbusting to induce panic selling, and redlining to deny loans in certain neighborhoods. Reasonable accommodations and modifications must be allowed for persons with disabilities. Advertising must avoid language that indicates a preference or limitation based on a protected class.
Antitrust and Ethical Marketing
Antitrust law forbids competing firms from fixing commission rates, allocating markets, or engaging in group boycotts, so commission rates are always negotiable between a firm and its client. Puffing, which is nonfactual sales opinion, is legal, but misrepresenting material facts is fraud. Advertising must be truthful and must not create the false impression that a broker is a private party rather than a licensed professional. Keeping accurate records and honoring disclosure duties protects both consumers and the broker's license.