U.S. Supreme Court Rules on Texas ‘Disparate Impact’ Case

On June 25, 2015, the U.S. Supreme Court issued its opinion in the case entitled, Texas Department of Housing and Community Affairs et al. v. Inclusive Community Project, Inc., et al., examining the question of whether “disparate impact claims are cognizable under the Fair Housing Act….”(576 U.S.____(2015)). In other words, is it appropriate for the Court to consider claims alleging discrimination where a particular statute or regulation appears neutral on its face; but application appears to create an “after-the-fact” discriminatory effect or disparate impact on members of a protected class?

The Supreme Court held, in a 5-4 decision, with Justice Anthony Kennedy writing for the majority, that disparate impact claims are appropriate for consideration by the courts, but that care should be taken when considering these types of cases so as not to impose “racial targets or quotas.” Click here to read the opinion.

Secrets of ‘No Error Transactions’

IAR Legal Transactions Attorney Jeffrey T. Baker answered questions and coached REALTORS® on having “No Error Transactions” during his presentation at MREDPalooza on June 23, 2015 in Rosemont, Illinois. Here are some of the top take-aways and best practices from that session.

Sellers’ Brokers:

  • Know your client. Who actually owns the property and has the authority to sign the deed? Does your client have power of attorney for the owners? Is a trust involved?
  • Explain exactly how and where you will market the property. Pocket listings are acceptable, but are they in the client’s best interest?
  • Educate the seller about disclosure duties. These include common law duties as well as those mandated by the Sellers Disclosure Act. It’s your duty to inform the seller, not to provide legal advice.
  • Provide all disclosures well in advance of the contract being signed.
  • Don’t hold onto earnest money checks. Cash them immediately – the law requires it.
  • Changes to the listing agreement do not involve the buyer or the buyer’s broker. Listing agreements are strictly between the seller and the seller’s broker. Do not amend the contract.

Buyers’ Brokers:

  • Avoid misunderstandings and protect your right to get paid by obtaining a buyer representation agreement. At minimum, provide a designated agent form up front to establish your duties to your client – this is required.
  • Make sure inspection and attorney review language is in the contract.
  • “If it’s not in the contract, it’s not in the sale.” If the buyer wants a particular piece of personal property included in the sale, include that property in the contract.

All Brokers:

  • Be clear about acceptance dates. Acceptance needs to be communicated promptly.
  • Pay attention to deadlines and stick to them! Insist that both parties adhere to deadlines.
  • Do not leave blanks in contracts. If using a form, write N/A or cross out parts that don’t apply and have both parties initial the change.
  • TRID will change closings and how broker’s payments are reported. Get clients ready for closing 7-10 days before the proposed closing date in the contract.
  • Respect personal privacy rights. Buyers should not take photos without the seller’s consent. Sellers should not record video without the buyer’s consent, although it is legal to do so. Recording audio without consent is illegal

Members of the Illinois Association of REALTORS® may consult the IAR Transaction Helpline at any time for answers to questions about contract formation, due diligence and closings. The IAR Legal Center is a resource for members of the Illinois Association of REALTORS® related to the laws, regulations and policies that govern the real estate industry in Illinois. Visit http://illinoisrealtor.org/legal for more information.

IAR offers members Legal Webinar Thursday morning about TRID

REALTORS® – Get your questions answered about changes to the Truth In Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosures during the IAR Legal Webinar at 9:30 a.m. tomorrow.

IAR Transaction Helpline Attorney Jeff Baker and IAR Legal Hotline Attorney Betsy Urbance will conduct the webinar – “Are You Ready for TRID?” – from Springfield.

Although changes in federal regulations were originally scheduled to be implemented Aug. 1, the Consumer Financial Protection Bureau is proposing a change to Oct. 1.

If you would like a specific question answered by either Baker or Urbance, please send it in advance to webinar@iar.org. Although questions will be answered during the webinar, priority will be given to those received in advance.

Space is limited for the session, so join the webinar promptly. If you are unable to participate in the live version, an audio recording will be available to members within 48 hours at http://www.illinoisrealtor.org/legal/webinars. IAR member login is required.


D.R. Legal News discusses 5 legal case studies for IAR managing brokers

The United States Supreme Court’s ruling that a professional licensing board was not immune from an anti-trust violation was just one of five legal case studies reviewed in the May edition of the D.R. Legal News.

Lisa Harms Hartzler, Sorling Northrup Attorneys, writes about the five cases for the Illinois Association of REALTORS®. The cases concluded that:

  • an auction company did not have an obligation to supply an Illinois Residential Real Property Disclosure Act form to a trustee for delivery to a successful bidder;
  • a California broker could not list Nebraska properties on the Internet;
  • liability insurance was not applicable to cover a real estate broker in a claim of negligent supervision; and
  • a plaintiff could not challenge rezoning of property without strictly following the Illinois Municipal Code.

D.R. Legal News is an e-newsletter published six times a year with targeted legal, market and management information for Illinois broker managers and designated REALTORS®.

REALTORS® get legal updates from Urbance, Baker

Betsy Urbance and Jeffrey Baker

The integration of TILA/RESPA, case summaries, the REALTOR® Code of Ethics Citation Program, social media and team names in advertising, drones and surveillance were among the topics reviewed by the Legal Services team of Betsy Urbance and Jeffrey T. Baker Wednesday at the IAR Spring Conference in Collinsville.

Baker reviewed many of the points covered in Tuesday’s joint TILA/RESPA webinar with the Illinois Bankers’ Association.  He noted the changes were intended to eliminate confusing language and forms used in financed real estate transactions.

Baker also said brokers can expect some delays at closings as banks continue to adjust to the new rules. Because banks are just absorbing the changes, software companies are still working on changes to loan forms. The new rules go in effect Aug. 1, but it remains to be seen if the bank software will be ready by then.

Baker said members should expect fewer closings per day as the new rule becomes operational and closing windows in general will likely be longer. Brokers should prepare clients for closings seven to 10 days in advance, he said, to accommodate for the new rule changes.

Urbance moved quickly through a variety of topics, including the importance of REALTORS® following the Code of Ethics and License Law when using social media for any part of their business. Regarding drones, she advised members not to use them unless a waiver is secured from the FAA. There is a risk that liability insurers would not cover damages caused by a drone being flown in contravention of federal laws.