A variety of federal statutes have been enacted to ensure fairness and transparency in real estate transactions. These statutes pertain to landlords, brokers, lenders and others involved in the sale, rental or financing of real property. As both a consumer and a professional in real estate, it is important to be aware of these laws as they are frequently evolving and expanding in many circumstances.
Landlords, Sellers and Agents. Title VIII of the Fair Housing Act (the Act) is the principal legislation addressing discriminatory practices in housing matters. The Act prohibits discrimination on the basis of race, color, religion, sex, or national origin when selling, renting or financing of property. Subsequent amendments to the Act added gender, individuals with disabilities, and families with children to the protected classes. The Act targets a range of practices, such as the refusal to rent or sell property to an individual based on the fact that the renter or buyer belongs to one of the classes listed above. Similarly, the Act prohibits discrimination in choosing the terms or conditions of the transaction based on the characteristics of the individual (such as charging a higher rent to a certain class of people). Landlords and sellers are not permitted to engage in discriminatory practices in advertising that are designed to deter a particular group of people from seeking to rent or buy the property. Similarly, agents and brokers cannot discriminate in showing a listing or accommodating sellers’ requests for certain buyers.
Lenders. There are a variety of laws pertaining to lending institutions that seek to regulate all aspects of the lending process, including disclosures, privacy and predatory lending practices. Mortgage lenders have licensing requirements that were established to promote adherence with federal and state laws. The Truth in Lending Act requires that lenders disclose certain information relating to the loan including the annual percentage rate, finance charges and the total number of payments. It also provides borrowers with a grace period in which to revoke the loan and establishes advertising guidelines for lenders to prevent deceiving consumers. The Real Estate Settlement Procedures Act (RESPA), which is enforced by the U.S. Department of Housing and Urban Development, mandates that lenders disclose information about closing costs and settlement procedures during mortgage transactions. One of the most important provisions under RESPA is the requirement that a “Good Faith Estimate” of closing costs be provided to the borrower to avoid deception by lenders regarding closing costs.
Chernoff Law handles business and real estate litigation matters throughout Arizona. Contact us by calling 480-719-7307 to discuss your legal matter.