Nebraska broker Tom is listing a single-family home for sale. The seller, an individual who is not in the business of selling homes, insists on selling only to a buyer of the same race and explicitly instructs Tom to screen buyers accordingly. Tom complies and declines to show the property to buyers of other races. Which of the following correctly describes the legal situation?
Correct Answer
A) Both Tom and the seller have violated the federal Fair Housing Act; the seller's private preference does not exempt Tom from liability.
Under the federal Fair Housing Act, both the seller and the broker are liable. While a private individual selling their own single-family home without a real estate broker or agent may qualify for a limited exemption under 42 U.S.C. § 3603(b), that exemption is explicitly unavailable when the seller uses a real estate broker or salesperson. By using Tom as his broker, the seller loses the private individual exemption. Tom, as a licensed broker, is independently prohibited from discriminating based on race under § 3604(a). A client's instruction to discriminate does not shield a licensee from liability.
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Related Topics & Key Terms
Key Terms:
Related Concepts
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
A group boycott is an illegal antitrust practice in which two or more competing real estate businesses agree to refuse to work with a specific person, company, or entity in order to harm that party's ability to compete.
In real estate, the distinction between an independent contractor and an employee determines tax treatment, liability, and the level of control a broker may exercise over the agent's daily activities. Most real estate agents operate as independent contractors.
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