Fair Housing & Federal Laws — Real Estate License practice questions

Depreciation of residential rental real property under MACRS is taken over:

1. 15 years — the short-recovery period
2. 27.5 years for residential rental
3. 39 years — the commercial period
4. The building's actual useful life

Answer: B — 27.5 years for residential rental

A) Too short. B) Correct — 27.5 years residential. C) That is commercial. D) Not statutory life.

"Redlining" in lending is:

1. Directing buyers based on class
2. Inducing sales by fear of change
3. Refusing to lend in a geographic area
4. Failing to advertise on the MLS

Answer: C — Refusing to lend in a geographic area

A) That is steering. B) That is blockbusting. C) Correct — geo lending discrimination. D) Unrelated.

Title III of the ADA (1990) primarily requires:

1. Federal agencies to provide employee accommodations for disability
2. Residential landlords to modify tenant bathrooms at cost
3. Public accommodations to remove access barriers when readily achievable
4. State courts to translate all filings into Braille for accessibility

Answer: C — Public accommodations to remove access barriers when readily achievable

A) Wrong - that is Title I. B) Wrong - FHA territory. C) Correct - Title III covers commercial. D) Wrong - no such rule.

A mineral right is BEST described as an interest in:

1. Subsurface minerals, severable from the surface rights of the parcel
2. The airspace above the parcel up to a limit of about five hundred feet
3. The neighbor's water well and pumping equipment across the property line
4. The land's surface area only, with no depth or subsurface granted to owner

Answer: A — Subsurface minerals, severable from the surface rights of the parcel

A) Correct - oil, gas, coal below. B) Wrong - that is air right. C) Wrong - neighbor's property. D) Wrong - excludes minerals.

Under IRC §121, a homeowner may exclude from taxable gain on sale of principal residence up to:

1. $250K single filer / $500K joint filers
2. $500,000 for any filer, always
3. $100,000 for any filer, always
4. Full gain, unlimited amount excluded

Answer: A — $250K single filer / $500K joint filers

A) Correct — §121 exclusion. B) MFJ only. C) Off-by-one. D) Direction reversal.

'Steering' under fair-housing law is illegal because it does what?

1. Charges different commission rates to different clients
2. Directs buyers toward or away from areas by protected class
3. Lists properties without securing the owner's written permission
4. Uses negotiation techniques a competitor considers aggressive

Answer: B — Directs buyers toward or away from areas by protected class

A) That is unrelated to steering. B) Correct — steering directs buyers on protected-class lines. C) That is an unauthorized listing issue. D) Aggressive negotiation is not illegal steering.

Vacancy rate in property analysis is BEST defined as:

1. The percent of unleased space at a specific point in time
2. The percent of rents actually collected during each year
3. The cap rate applied to the market's overall average rent
4. The percent of the property owned by the mortgage lender

Answer: A — The percent of unleased space at a specific point in time

A) Correct - unleased share. B) Wrong - collection loss. C) Wrong - not vacancy. D) Wrong - that is LTV.

'Blockbusting' under fair-housing law is illegal because it does what?

1. It legitimately improves the quality of neighborhoods over time
2. It is required by the U.S. Department of Housing and Urban Development
3. It helps existing homeowners obtain a fair market price for the home
4. It induces sales by suggesting a protected class is moving into area

Answer: D — It induces sales by suggesting a protected class is moving into area

A) Blockbusting harms neighborhoods. B) HUD does not require blockbusting. C) It induces sales below market, harming owners. D) Correct — that is the definition.

A Fair Housing Act discrimination claim may be filed with:

1. Only the local municipal police department that has jurisdiction
2. Only a state small-claims court within 30 days of any incident
3. HUD within one year, or in federal court within two years, of act
4. Only the National Association of Realtors' ethics review board

Answer: C — HUD within one year, or in federal court within two years, of act

A) Wrong - not policing matter. B) Wrong - federal available. C) Correct - HUD 1yr / court 2yr. D) Wrong - NAR voluntary.

An agent who violates Fair Housing law may face:

1. HUD complaints, damages, and state license discipline
2. Only mandatory re-training with no license impact possible
3. Only informal mediation with no financial penalty at all
4. Only a small civil fine capped at five hundred dollars

Answer: A — HUD complaints, damages, and state license discipline

C) Wrong - remedies substantial. B) Wrong - license risk. A) Correct - layered liability. D) Wrong - penalties larger.

Can a real estate agent refuse to work with a client because of their religion?

No — the Fair Housing Act prohibits discrimination by real estate professionals on the basis of any protected class, with no exemptions for agents.

An agent refuses to show properties in a particular neighborhood because of high crime. Is this steering?

It could be if the refusal is based on the racial composition of the neighborhood rather than legitimate safety concerns. Agents should provide requested info about any area.

What is HOPA (Housing for Older Persons Act)?

1995 amendment exempting qualifying senior communities (55+ or 62+) from familial status discrimination. Must meet specific requirements including percentage of residents 55+.

An agent describes a neighborhood as 'up and coming' or 'changing.' Could this violate Fair Housing?

Potentially yes — if the language implies demographic changes related to protected classes. Agents should describe neighborhoods factually without characterizing residents.