Jason Rose

Here is a summary of a case that was decided seveal months ago by the Michigan Court of Appeals that concerns a lawsuit filed by a real estate assistant who was injured while showing a house. Dyer v. Russell, No. 273574, 2007 WL 4415467 (Mich. Ct. App., decided December 18, 2007).

Plaintiff Amy Dyer, a licensed realtor’s assistant, went to defendant’s home for the purpose of showing the house to potential buyers. While walking down defendant’s basement staircase, she slipped and fell. Plaintiff brought suit against defendant on a premises liability (negligence) theory. The trial court granted defendant’s later motion for summary disposition, indicating that the owner of a private home placed for sale does not owe a duty to ensure that all building codes are met and the condition of the stairs was open and obvious. The Michigan Court of Appeals agreed with defendant and affirmed the trial court’s summary disposition.

Plaintiff first argued that the open and obvious doctrine does not apply where, as here, a statute or ordinance imposes an independent duty upon a landowner. Plaintiff contended that the Michigan Residential Code imposed a statutory duty on defendant. However, plaintiff did not cite any authority to show that private owners are responsible under a municipal building code for injuries sustained on their premises due to a danger that would otherwise be classified as open and obvious. Accordingly, in the absence of any such authority, the court found no reasonable basis to impose liability on defendant for any possible code violation related to the condition of the stairs. The issue became, then, whether the condition of the stairs was open and obvious.

In this case, plaintiff testified that the stairs were narrow, steep, and lacked handrails or walls on either side. She also testified that the stairs appeared dangerous, but chose to use them anyway. The court held that, because plaintiff admitted that she hesitated before going down the stairs precisely because they appeared to be dangerous, the condition of the stairs was clearly open and obvious. Plaintiff also attempted to claim that the open and obvious doctrine should not be applied in this case because as a realtor’s agent -- or more specifically, as a licensed assistant to a licensed real estate professional –- there is a special aspect. That is, she contended that the stairs were effectively unavoidable because she had some obligation to defendant to descend the basement stairs. The court did not buy this creative argument finding that the likelihood of harm associated with descending the flight of stairs into the basement of the home was not uniquely high, nor was the severity of the potential harm.

In summary, the plaintiff real estate assistant lost her lawsuit against the home owner because she decided to ignore an open and obvious danger.

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Please visit us at www.123ConEd.com for all of your Michigan real estate continuing education needs. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our courses are fully approved and properly certified by the Michigan Department of Labor & Economic Growth. All of our online Michigan real estate con ed courses are designed to offer our students the most information, as quickly and economically as possible.

Copyright © 123 ConEd LLC 2009. All rights reserved.

As a real estate professional, you need to be aware that there are "secret shoppers" scouting open houses and rental vacancies trying to catch real estate agents in a fair housing violation. Those "secret shoppers" are fair housing testers.

Fair housing testing is an invaluable tool used in measuring the practices of housing providers relating to the Fair Housing Act. Some unlawful housing discrimination practices can only be discovered through fair housing testing. Information gathered through fair housing testing can be used as evidence to support a client's administrative housing discrimination complaint with the Department of Housing and Urban Development ("HUD") or a private lawsuit against a housing provider. The United States Supreme Court has recognized and affirmed the important of fair housing testing in fighting housing discrimination.

In order to enforce fair housing laws, the Housing and Civil Enforcement Section of the Civil Rights Division of the United States Department of Justice ("DOJ"), brings suit to enforce the Fair Housing Act, which prohibits discrimination on the basis of race, color, religion, national origin, sex, disability, and familial status. The Fair Housing Act authorizes the DOJ to bring suits where investigations yield evidence of a pattern or practice of illegal housing discrimination.

In 1991, the DOJ's Civil Rights Division established a fair housing testing program and commenced testing in 1992. Testing refers to the use of individuals who, without any bona fide intent to rent or purchase a home, apartment, or other dwelling, pose as prospective buyers or renters of real estate for the purpose of gathering information, which may indicate whether a housing provider is complying with fair housing laws. The primary focus of the fair housing testing program has been to identify unlawful housing discrimination based on race, national origin, disability, or familial status.

The DOJ's Housing and Civil Enforcement Section employs various means to accomplish testing in local communities, including contracts with private fair housing organizations, contracts with individuals, and by using non-attorney DOJ employees throughout the country. The DOJ employees are volunteers who have been trained to participate as testers. Since 1992, the testing program has recruited and trained over 1,000 employees from various DOJ components throughout the nation to participate as testers. These are in addition to the numerous individuals retained by private fair housing organizations. The Housing and Civil Enforcement Section conducts numerous investigations simultaneously at any given time.

Testing is a method to determine whether or not a home seeker is treated differently in his or her search for housing. A person's race or national origin, for example, would be impermissible factors upon which to base a denial of an opportunity to purchase a home. Testing for housing discrimination involves individual testers posing as prospective home buyers or renters. Testers are paired and assigned profiles so that they are equally qualified to rent or purchase an apartment or home in question. They are similar in all respects except for one of the protected classes, such as race, color, religion, sex, handicap, familial status, national origin, age, or marital status. The experiences of testers are used to compare the treatment of one home seeker (protected class) to another (non-protected class). In this context, testing measures the difference in treatment afforded a home seeker as determined by the information and services provided by real estate firms, property management firms, realtors, rental agents and others.

If differences are found that relate to race, color, religion, sex, handicap, familial status, national origin, age, or marital status, a housing discrimination is filed. Over the past thirteen years, the DOJ has filed 79 pattern and practice testing cases with evidence directly generated from the fair housing testing program. The vast majority of testing cases filed to date are based on testing evidence that involved allegations of agents misrepresenting the availability of rental units or offering different terms and conditions based on race, and/or national origin, and/or familial status. Of the 79 suits filed, 78 have been resolved. Of the 78 resolved cases, the Department has recovered more than $12 million, including over $2 million in civil penalties and over $10.3 million in other damages.

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To learn more about Fair Housing issues in Michigan (and many other topics affecting Michigan real estate professionals), please visit us at www.123ConEd.com. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of online continuing education courses to real estate professionals in Michigan. Our online Michigan real estate con ed courses are fully approved and properly certified by the Michigan Department of Labor & Economic Growth. All of our courses are designed to offer our students the most information, as quickly and economically as possible.

Each year, Michigan real estate professionals make dozens of phone calls to the Michigan Department of Labor & Economic Growth ("DLEG") requesting information about activities that an unlicensed individual may perform. In an effort to provide guidance and to help reduce a broker's exposure to potential risk in the utilization of unlicensed assistants, the DLEG published a list of guidelines, which were modeled after an article written by Tom Kotzian (Macomb County Association of Realtors) and approved by Ann Millben (Licensing Administrator for Real Estate for the DLEG).

Here are the guidelines provided by the DLEG:

Unlicensed Assistants MAY:

• Assist licensees during an open house, performing the following functions as a "host" or "hostess"
  • Open the door and greet prospects as they arrive at the open house
  • Hand out prepared printed material
  • Have prospects sign a register (guest book) to record names, addresses and phone numbers for the listing
  • Accompany prospects through the home for security purposes (only the licensee should answer any questions pertaining to the material aspects of the house or its price and terms)
• Perform strictly clerical tasks
• Function as a courier in picking up or delivering documents on behalf of the employing licensee
• Note: Keys should not be given to unlicensed persons for the purpose of showing a listed property. Brokers are responsible for the properties in their listing inventory and should only give a key to a licensee who is able to show proper I.D. (e.g., valid pocket card and driver's license with photo)

Unlicensed Assistants MAY NOT:

• Independently show or demonstrate property to prospective buyers
• Make cold calls by telephone or in person to potential listers, purchasers, tenants or landlords
• Answer any questions on title insurance, financing or closings
• Independently hold open houses for brokers, or staff booths in home shows or fairs
• Solicit business through telephone prospecting
• Give additional information not included in prepared written promotional material that has been distributed to the public (e.g., newspaper ads, flyers, brochures)
• Represent themselves as an agent for a real estate broker or the owner/seller of property
• Have their name printed on business cards or stationery that would imply they are an agent for the real estate broker
• Conduct telephone solicitation calls. For example, if John Doe, an unlicensed assistant, calls and indicates he represents ABC Realty, one is led to believe the purpose of the call is to engage in real estate activities. The definition of broker and salesperson in the Occupational Code includes one who "lists or attempts to list." Therefore, a call by an unlicensed assistant identifying him or herself as a "representative" of a real estate company is an attempt to list even if specific terms are not discussed at that time.
• Perform any of the acts for which a license is required under Michigan Real Estate License Law. See M.C.L.A. 339.2501 et seq.)

Licensees who violate State license law by allowing unlicensed assistants to practice real estate on their behalf subject themselves to one or more of the following penalties:

• Placement of a limitation on the license
• Suspension of license
• Denial of license renewal
• Revocation of license
• A civil fine not to exceed $10,000 per offense
• Censure
• Probation
• Restitution.

(M.C.L.A. 339.602)

Brokers and managers must also be aware of their liability in allowing licensees to employ unlicensed assistants. Factors such as worker's compensation laws, agency law, income tax reporting and withholding requirements, sexual harassment, employment discrimination and a myriad of state and federal employment statutes must be carefully reviewed when allowing licensees to hire unlicensed assistants.

Brokers need to remember that they are responsible for the acts of their licensed salespersons and associate brokers and "shall not contract with an individual who is licensed to the broker so as to lose the authority to supervise the licensee." M.C.L.A. 339.22325. It is, therefore, the broker's responsibility to supervise all personnel acting under the scope of the broker's authority.

Brokers need to consider these issues when writing independent contracts with their salespersons and associate brokers. It is recommended that, prior to drafting any independent contract section on this subject, brokers consult with an attorney who is knowledgeable in employment discrimination and related employment laws. Good research and preparation will help avoid many of the problems addressed in this posting.

For more information or answers to specific questions, you should contact the DLEG directly by calling (517) 241-9288.

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Please visit us at www.123ConEd.com for all of your Michigan real estate continuing education needs. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our courses are fully approved and properly certified by the Michigan Department of Labor & Economic Growth. All of our online Michigan real estate con ed courses are designed to offer our students the most information, as quickly and economically as possible.

I was in the process of updating the online fair housing continuing education courses offered by my school (www.123ConEd.com), when I came across this recent Fair Housing Act case. Although this case was filed in Louisiana and not in Michigan, the case is still instructive for Michigan real estate professionals because it was brought under the federal Fair Housing Act, which applies equally in all states. Because Fair Housing is such an important topic, I thought that I'd post a summary of this recent case.

On September 30, 2008, the United States Department of Justice settled a fair housing lawsuit for $145,000 against the owner and the property manager of Pecan Terrace Apartments in Lafayette, Louisiana. The lawsuit alleged that the owner and property manager discriminated against families with children in violation of the Fair Housing Act. According to the Department of Justice’s complaint, Pecan Terrace Apartments, LLC, and Taufiq M. Sekhani had and exercised a policy of refusing to rent second floor units to families with children and discouraging families with children from renting at the complex.

This case arose as the result of the use of fair-housing testers, individuals who pose as renters for the purpose of gathering information about possible discriminatory practices in the rental of apartments. In February 2006, in the aftermath of the housing crisis caused by Hurricane Katrina, the Department of Justice announced Operation Home Sweet Home, which was a concentrated initiative to expose and combat housing discrimination in America. Operation Home Sweet Home targets housing discrimination all over the country, not just areas hit by Hurricane Katrina.

Under the terms of the settlement, the defendants were required to pay up to $115,000 to compensate victims of discrimination at Pecan Terrace Apartments, as well as pay $30,000 in civil penalties to the United States. The settlement also called for numerous corrective measures, including training on the requirements of federal housing law, a nondiscrimination policy, record keeping and monitoring.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Since January 1, 2001, the Department of Justice’s Civil Rights Division has filed 271 cases to enforce the Fair Housing Act, 54 of which alleged discrimination based on familial status.

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To learn more about Fair Housing issues in Michigan (and many other topics affecting Michigan real estate professionals), please visit us at www.123ConEd.com. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our online Michigan real estate con ed courses are fully approved and properly certified by the Michigan Department of Labor & Economic Growth. All of our courses are designed to offer our students the most information, as quickly and economically as possible.

Copyright © 123 ConEd LLC 2009. All rights reserved.

I was in the process of updating the online fair housing continuing education courses offered by my school (www.123ConEd.com), when I came across this recent Michigan Fair Housing Act case. Because Fair Housing is such an important topic, I thought that I'd post a summary of this recent case.

In late November 2008, the United States Department of Justice settled a fair housing lawsuit for $170,000 against the owners and managers of Regent Court Apartments in Roseville, Michigan. The lawsuit alleged that the owners and managers had discriminated against African-Americans who were seeking to rent apartments at the complex. Specifically, the complaint alleged that Regent Court Apartments, LLC, and Donna Harrison, the leasing manager, engaged in a pattern or practice of discrimination against African-American applicants for tenancy.

The Justice Department's lawsuit was based upon evidence developed by Operation Home Sweet Home, a concentrated initiative to expose and eliminate housing discrimination in America. Operation Home Sweet Home utilized the Department of Justice's fair housing testing program where individuals pose as renters for purposes of gathering information about possible discriminatory practices. The Fair Housing Center of Metropolitan Detroit, a private fair housing organization, assisted with the testing pursuant to a contract with the Justice Department.

Under the terms of the settlement, the defendants were required to pay $75,000 in damages to three victims who were discriminated against because of their race at Regent Court Apartments; pay $55,000 in a civil penalty to the United States; and pay $40,000 into a settlement fund that will be distributed to any additional victims of discrimination at Regent Court Apartments who are identified following entry settlement. The settlement also required the defendants to undergo fair housing training, self-testing, and reporting requirements for the three year term of the decree.

It is important for all real estate professionals to remember that the Fair Housing Act ensures that all individuals have equal access to housing. The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Fair housing issues are important and real estate professionals need to be familiar with the law and what they can/cannot do.

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To learn more about Fair Housing issues in Michigan (and many other topics affecting Michigan real estate professionals), please visit us at www.123ConEd.com. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our online Michigan real estate con ed courses are fully approved and properly certified by the Michigan Department of Labor & Economic Growth. All of our courses are designed to offer our students the most information, as quickly and economically as possible.

Copyright © 123 ConEd LLC 2009. All rights reserved.