Fair Housing is a Serious Matter

Illinois REALTOR® Magazine | April 2013

Fair Housing is a Serious Matter

Plus, when electronic signatures are acceptable in contracts and hosting open houses for your agent/friend

By Elizabeth A. Urbance  |  IAR Legal Hotline Attorney; Associate, Sorling Northrup Attorneys

In a residential lease transaction, is it appropriate for a landlord to refuse to rent to tenants who are recipients of the federal Section 8 voucher program?

Landlord participation in the federal Section 8 voucher program is still voluntary UNLESS there is a local ordinance that includes source of income as a protected class and the source of income class includes the Section 8 program. It is extremely important for licensees to be aware of local ordinances like this that can be stricter than federal or state fair housing laws.

  • Look for NEW Fair Housing Rules Relating to “Disparate Impact” or “Discriminatory Effect.”

These rules became effective on or around March 17, 2013. The rules were drafted by the U.S. Department of Housing and Urban Development (HUD) to give landlords and tenants a clearer picture of what could constitute illegal discrimination in housing when there is a “disparate impact” or “discriminatory effect” even if the initial limitation is facially neutral. There does not have to be an intent to discriminate to violate the rules. Read more online: http://portal.hud.gov/hudportal/documents/huddoc?id=discriminatoryeffectrule.pdf and download the IAR Legal Webinar on this topic.

Popular Question from IAR Legal Webinar:

Is it acceptable to use electronic signatures and documents for real estate contracts and related disclosures?

Yes, if the parties to the contract agree electronic signatures/documents can be used, then they are allowable. You do need to know whether there is a statutory requirement to provide a disclosure or notice in writing, in which case, the electronic signatures/documents would not be acceptable without the written consent of the person to whom written notice is required to be given. An example of this would be where a purchase contract is signed by the parties and before becoming bound by the contract, the buyer has a statutory right to receive the Illinois Residential Real Property Disclosure Form. The buyer would need to consent to receive this form electronically, if that is how this form will be provided, when the entire transaction takes place on an electronic platform. If consent is not given, the disclosure form would need to be provided in hard copy. Also, keep in mind that the evidence for proving signatures or the content of contractual provisions if there is denial or disagreement by one of the parties will be different than evidence that might be used to prove a “wet” signature or the terms and provisions of agreements made “on paper.”

Licensees must work for One Sponsoring Broker:

Under the Illinois Real Estate License Act of 2000 (the Act), if I am a licensee sponsored by ABC Realty, Inc., could I host an open house for a property listed by XYZ Realty, Inc. to “cover” for my friend who is the listing agent and who is sponsored by XYZ?

Generally speaking, no. Section 10-20(a) of the Act requires you, as a sponsored licensee, to work for the one sponsoring brokerage company that sponsors your license. In this case, your sponsoring brokerage company is ABC Realty, Inc. (ABC). The listing agreement is between the homeowner and XYZ Realty, Inc. (XYZ). Thus, only licensees sponsored by XYZ may engage in activities required to market the home for sale under the listing agreement that exists between the homeowner and XYZ.

However, if XYZ and ABC enter into an agreement between the two sponsoring brokerage entities the Act would not prohibit this sort of arrangement. The sponsoring brokerage companies would need an agreement between them that defines the rights, duties, payment and responsibilities of each company that would ideally be drafted with the assistance of their respective attorneys. As you can see, once there is an agreement between the sponsoring brokerage companies, the licensees would then still be working for their individual sponsoring brokerage companies and will receive their payment for services from their own sponsor. It is still XYZ’s listing, but you could sit the open house under the terms of the agreement between XYZ and ABC. XYZ would make payment for your time to ABC, who in turn, would pay you according to the terms of your contractual agreement with ABC who is your sponsoring broker.  You might also surmise that this is a fairly complicated arrangement in order to effectuate your listing agent/friend’s simple request to host her company’s open house. Whether or not to enter into such an agreement would be within the business discretion of XYZ and ABC, presumably with the consent of the homeowner.


Breakout Text: 

April 2013

April 2013 cover

April is Fair Housing Month

Find resources including a guide for real estate professionals and purchase “Fair Housing Is a Serious Matter! A Sellers’ Guide” designed for listing presentations from the IAR REALTOR® Store, http://shop.illinoisrealtor.org, 800/529-2696.

  • Under Federal Fair Housing Law and the Illinois Human Rights Act, protected classes include: race, color, religion, sex, national origin, familial status, handicap, marital status, sexual orientation and order of protection status.
  • Article 10 of the REALTORS® Code of Ethics provides that “REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin or sexual orientation. REALTORS® shall not be a party to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin or sexual orientation. REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin or sexual orientation.”