Chapter 3
Legal Environment of Brokerage

Other State and Local Regulations

* Zoning laws

* Sign ordinances

* Implied warranty of habitability

Federal Laws

* Civil Rights Acts of 1866 and 1968

* Fair housing

* Credit and lending

* Regulation Z

* Land sales laws

* RESPA

* Environmental

Civil Rights Issues

* Civil Rights Act of 1866--Prohibits discrimination based upon race.

* Fair Housing Act of the Civil Rights Act of 1968 prohibits discrimination of protected classes

Protected Classes Include:

* Race

* Color

* Sex

* Handicap

* Religion

* Familial status (including age)

* National origin

* I expect that sexual preference will soon be added.

Exemptions:

* Sex discrimination may be allowed in the case of single-sex dormitories or rooming houses.

* Religious discrimination may be allowed in properties owned by the religious institution.

* Private clubs can restrict rentals to members provided membership is not discriminatory.

* Age discrimination against children allowed in multifamily units restricted for occupancy by the elderly (55+) provided that significant facilities and services are provided specifically for the elderly and that 80% of the occupants must be 55+.

Fair Housing Law Issues

* Blockbusting

* Steering

Pennsylvania's Human Relations Act

* Includes an additional protected category of age (40+)

* Protection of guide animals

Credit and Lending Laws

* Redlining

* Regulation Z: Truth in Lending Act of 1969

* Equal Credit Opportunity Act

RESPA

* Information booklet

* Good faith closing cost estimate

* Uniform Settlement Statement

* Prohibition against kickbacks

Interstate Land Sales Full Disclosure Act of 1968

* Sales of properties where large number of buyers are out-of-state

* Requires deliver of HUD Report that includes disclosure of specific questions and answers specified by HUD.

Hazardous Substances

* Radon

* PCBs

* Aluminum wiring

* Lead

* Asbestos

* Urea Formaldehyde

* LUST

Contracts for Sale

* Role of contracts

* Specify duties, rights, obligations of parties

* Provide remedies in case of default

* Specify timing of events

* Statute of frauds

Elements of Valid Contract Offer and Acceptance

* Termination of offer

* Accept

* Rejection

* Lapse of time

* Counter offer

* Mail

Reality of Consent (Mutual Assent): Meeting of the Minds

* Undue influence

* Mistake

* Misrepresentation, puffing

* Fraud

Elements of Valid Contract Competent Parties

* Infants

* Voidable upon majority

* May contract for necessities but need only pay for "fair market value"

* Diminished mental capacity

* Insane: voidable if not adjudicating or if no undue harm; voidable if notice through actions

* Drunkards

* Duress, undue influence

Other Elements of a Valid Contract

* Legal object

* Consideration

* Good and valuable

* Unconscionable

* Love and affection

* Executed

* Executory

* Written and signed

* Adequate legal description

Preliminary Contracts

* Binder - obligates both parties to complete negotiation of a contract

* Letter of intent - Obligates parties to serious negotiation

* Options

* Right of first refusal