Three-Year Investigation Shines Spotlight on Unequal Treatment and Steering by Real Estate Agents
three-year investigation uncovered rampant unequal treatment and steering of potential minority homebuyers by real estate agents on Long Island. The investigation, conducted by Newsday, relied on paired testers secretly recording over 90 different agents and involving over 5000 listings. 

Minority testers were routinely directed toward more integrated neighborhoods than their white counterparts, shown fewer house listings, put under greater financial scrutiny, and generally received unequal treatment. Black testers experienced unequal treatment nearly 50% of the time, while for Hispanic and Asian testers comparable figures were 39% and 19%, respectively.
The investigation contained example after example of agents who were often consciously aware of fair housing laws but who nonetheless used both direct and coded language to steer potential home buyers based on race. Unsolicited suggestions and comments from agents to their clients included: “Follow the school bus,” “…go there at 10:00 at night with your wife…” and “… [they] came in and they really took over…” 

The law and Code of Ethics are clear: It is both illegal and unethical for a real estate agent to influence a prospective buyer’s choice of housing by failing to show listings or real property, failing to provide or volunteer information to any person, or channeling or steering any person away from real property on account of the person’s race or the racial composition of the community in which the property is located.  Additionally, unequal treatment through imposing greater financial requirements on account of a person’s race is completely illegal. 

The Fair Housing Act turned 50 last year. To commemorate this milestone, C.A.R. provided information and resources about the Fair Housing Act. Review some of the fair housing legal Q&As, a webinar on fair housing and an in-depth article by California Real Estate magazine and be on the lookout for additional information in coming weeks.

Raising Rent under the Statewide Rent Cap Law? Because the CPI is Not Clearly Defined, Landlords are Advised to Proceed Cautiously.
Under AB 1482, the statewide rent cap and just cause eviction law, a landlord is permitted to raise rent by 5% plus inflation as indicated by the applicable Consumer Price Index. But AB 1482 is ambiguous in describing precisely which CPI measurement can be used. Since judges are required to interpret the eviction laws “strictly,” this ambiguity can be fatal to the success of an eviction law suit. Furthermore, because an eviction involves the forfeiture of a tenant’s right to remain in a home, judges will typically interpret lease provisions against the landlord. 

The ambiguities in AB 1482 regarding the calculation of the Consumer Price Index include:
• AB 1482 prescribes the use of the CPI for the “region” where the property is located as published by the US Bureau of Labor Statistics (“the Bureau”). However, the only “regional” number the Bureau publishes is for the “West Region” which covers the 13 westernmost states. The intent of the law in using of the word “region” must certainly have meant to refer to the Bureau’s “area” indexes, and it seems absurd that a court would use the West Region CPI. However, many landlord/tenant attorneys are genuinely concerned that courts will read the law in its most literal sense. In which case a lower CPI must be used.
• AB 1482 requires that the CPI calculation be based on the April to April numbers for the region. But presently the Bureau does not include April numbers for San Diego, Riverside and San Bernardino counties. Instead the Bureau publishes bi-monthly numbers for these areas beginning in January. This leaves landlord/tenant attorneys in a quandary over recommending which CPI should be used for these counties. 
• AB 1482 specifies that “the” Consumer Price Index as published by the Bureau be used. However, the Bureau provides more than one CPI measurement. Although the “CPI-U for all Urban Consumers” is the most commonly used and broadest measure for each area, there is another measurement published by the Bureau called the “CPI-Urban Wage Earners and Clerical Workers.” 
• The Bureau publishes numbers which encompass counties even though the name used to reference these counties might include certain city names. For example, the CPI-U for the Los Angeles area covers the counties of Los Angeles and Orange but is referred to as the “CPI-U, Los Angeles-Long Beach-Anaheim.”

The bottom line: Landlords are advised to proceed cautiously when increasing rent. Landlords who wish to take a conservative approach can consider, after consultation with their own legal counsel, using the lowest of the possible rent increases with an eye toward what can be reasonably be defended in an eviction proceeding in the tenant-friendly state of California. 
For more information about the AB 1482 please see our Q&A “Statewide Rent Cap and Just Cause Eviction Law.“ 

Insurance Commissioner Declares Mandatory One-Year Moratorium on Policy Non-Renewals
Insurance Commissioner Ricardo Lara has issued a mandatory one-year moratorium on insurance companies not renewing policies for homes in wildfire disaster areas in Northern and Southern California. 

Additionally, because the homeowner insurance crisis extends beyond the wildfire perimeters and impacts homeowners statewide, Commissioner Lara went a step further and called on insurance companies to voluntarily cease all non-renewals related to wildfire risk statewide until December 5, 2020.  

The mandatory one-year moratorium covers more than 800,000 residential policies in ZIP Codes adjacent to recent wildfire disasters. While existing law prevents non-renewals for those who suffer a total loss, a new law passed last year, upon which this moratorium is based, establishes protection for those living adjacent to a declared wildfire emergency who did not suffer a total loss—recognizing for the first time in law the disruption that non-renewals cause in communities following wildfire disasters.
What can a homeowner do if their policy has been cancelled?
If a homeowner has received a notice of cancellation or non-renewal after the declared state of emergency that relates to the fire associated with the homeowner’s ZIP code, and the reason for the cancellation or non-renewal relates to wildfire risk, that homeowner should contact their insurance company to seek a reinstatement of the policy. If the insurer refuses, the homeowner is encouraged to contact the California Department of Insurance and file a Request for Assistance.  

For Emotional Support Animals, Online Certifications are Unreliable per HUD and the California DFEH 
Both the federal Department of Housing and Urban Development (HUD) and the California Department of Fair Employment and Housing (DFEH) agree: Online Certifications from websites which purport to establish a tenant’s disability-related need for an assistance animal, including emotional support animals, are presumptively unreliable unless they include an individualized assessment. Although both agencies were in agreement, HUD’s view was notably more hostile to businesses engaged in providing online certifications.
Recently HUD asked the Federal Trade Commission to investigate websites purporting to offer assistance animal documentation for misleading consumers. In HUD’s view, these websites offer documentation that is not reliable for purposes of determining whether an individual has a disability or a disability-related need for an assistance animal because the website operators and health care professionals who consult with them lack the personal knowledge that is necessary to make such determinations. 

Even still HUD was quick to add that a healthcare professional that provides services remotely, including over the internet, may provide reliable verification “if the provider has personal knowledge of the individual’s disability-related need for the animal.” HUD states that “personal knowledge” is knowledge of the type that health care providers ordinarily use for diagnosis and treatment. 

California has its own laws, and recently it published new regulations, effective January 1, 2020, which concern the type of documentation that will suffice as evidence of a disability-related need for an assistance animal. Under the new regulations, a support animal certification from an online service that does not include an individualized assessment from a medical profession is presumptively unreliable. The California rule also points out that merely having a certificate or having an animal wear a vest is not in and of itself sufficient. However, a landlord provided with such an unreliable online certification cannot simply deny the accommodation. Instead the landlord should request additional information. 

The bottom line: Even though HUD and the DFEH have a dim view of online certifications, a landlord must still tread carefully. Before denying any prospective tenant an accommodation even for an emotional support animal, the landlord should consult with their own legal counsel. 

Form CCPA is now bundled with the Agency Disclosure and should be provided to your clients

The California Consumer Privacy Act (“CCPA”), which goes into effect on January 1, imposes certain obligations on “3rd party” companies that are otherwise exempt from the law. This would include many brokers, regardless of their size or data use, if they have received data from a CCPA covered business. The law requires these “3rd party” companies to provide a consumer with explicit notice of their right to “opt-out” of the sale of their data that was received from the CCPA covered business before that data is sold or shared again by the 3rd party company. 

Most MLSs would also qualify as 3rd parties. Accordingly, the MLS Model Rules now require that all MLS participants or subscribers comply with the 3rd party CCPA notice requirements. 

To facilitate compliance with the consumer privacy law and the MLS Model Rules, a new C.A.R. form “California Consumer Privacy Act Advisory” (CCPA) has been created. It is bundled with the Agency Disclosure and should be provided to your clients at the same time as the Agency Disclosure. 

C.A.R.’s Q&A entitled “The California Consumer Privacy Act” explains the obligations imposed upon 3rd party businesses and the use of the new form. See questions 27 through 32.