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Practice of Real Estate term

Protected Class

A group of people legally shielded from discrimination, such as race, color, religion, sex, national origin, familial status, and disability under federal law.

Why Protected Class matters on the exam

This term belongs to Practice of Real Estate. The questions below are real items from Freehold's bank that use it - each one cites its source.

Exam questions using Protected Class

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When representing a buyer, the agent's duty of obedience means following the buyer's lawful instructions regarding:

  1. Which properties to pursue, offer terms, and negotiation strategy
  2. Instructions to discriminate against a seller based on a protected class
  3. Requests to falsify loan documents
  4. Any direct demands to conceal a known material defect from the seller
Show answer & explanation

Which properties to pursue, offer terms, and negotiation strategy — Obedience requires following the client's lawful instructions on matters like which properties to pursue and how to negotiate, but not instructions that would violate the law.

Source: PSI National Real Estate Exam Content Outline §5 General Principles of Agency

A lender's policy that has a discriminatory effect on a protected class, even without intentional discrimination, may still violate fair housing law under the theory of:

  1. Simple puffing
  2. Disparate impact
  3. Caveat emptor doctrine
  4. Equitable estoppel
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Disparate impact — Disparate impact liability applies when a facially neutral lending policy disproportionately and unjustifiably harms members of a protected class, even absent proof of intentional discrimination.

Source: PSI National Real Estate Exam Content Outline §4 Financing

Which of the following is NOT a protected class under the federal Fair Housing Act?

  1. Familial status
  2. Age
  3. National origin
  4. Disability
Show answer & explanation

Age — The federal Fair Housing Act protects race, color, religion, national origin, sex, familial status, and disability. Age is not a federal protected class, though some state and local laws add it.

Source: Federal Fair Housing Act (42 U.S.C. §3604)

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