Chapter 1
Kentucky Real Estate Law & Regulations
Course: Kentucky Real Estate Exams Prep
Subject: Kentucky State Sales Associate Exam Prep
Chapter: Ethics Fair Housing Risk Management Of Kentucky National Sales Associate Exam Prep
Protected Classes:
- Federal Fair Housing Act (FHA): Prohibits discrimination in the sale, rental, financing, advertising, and brokerage of housing based on: Race, Color, Religion, Sex, National Origin, Familial Status (presence of children under 18), and Disability.
- Kentucky Fair Housing Act (KFHA): Includes all federal classes and adds additional state-level protections. Most notably, it prohibits discrimination based on a person's status as a "Smoker or Nonsmoker." It also provides for enforcement through the Kentucky Commission on Human Rights, which can investigate complaints and impose penalties.
Prohibited Acts with Examples:
- Steering: Channeling buyers toward or away from neighborhoods based on a protected class.Example: An agent assumes a Hispanic family would be "more comfortable" in a certain part of town and only shows them homes there, despite their stated preferences for other areas. This is illegal steering.
- Example: An agent assumes a Hispanic family would be "more comfortable" in a certain part of town and only shows them homes there, despite their stated preferences for other areas. This is illegal steering.
- Blockbusting (Panic Peddling): Inducing homeowners to sell by suggesting that members of a protected class are moving into the area and will cause property values to decline.Historical Case Study: In the 1960s and 70s, this was a common, unscrupulous practice where agents would solicit listings in white neighborhoods by fearmongering about racial integration. It is now strictly illegal.
- Historical Case Study: In the 1960s and 70s, this was a common, unscrupulous practice where agents would solicit listings in white neighborhoods by fearmongering about racial integration. It is now strictly illegal.
- Redlining: A systemic practice by lenders or insurers of denying services or increasing costs for geographic areas based on the racial or ethnic composition of those areas.
- Discriminatory Advertising: Advertising must be inclusive. Phrases like "great bachelor pad" (could imply discrimination based on familial status), "walk to St. Mary's church" (religious preference), or "perfect for a quiet single" (discourages families) can be violations. Advertisements should focus on the property's features, not the intended occupant.