TABLE OF CONTENTS

A Licensee’s Guide To
Agency, Ethics, Trust Fund Handling and Fair Housing
(A DRE Approved Combined Survey Course)
Introduction...................................................... 1
Goals And Objectives.............................................. 3
Chapter 1................................................... AGENCY 5
I.   Agency Identified...................................... 5
II.  History of Organized Real Estate related to Agency..... 6
III. Clarification of Agency Relationships ................. 6
IV.  California Legislation................................. 7
A. Basis of Agency Relationships
B. California Agency Legislation
C. Types of Agency Relationships
1. Single Agency
2. Dual Agency
D. Sanctions for Breach of Agency Duty
E. Three Step Compliance
F. Listing Agent Obligations
G. Selling Agent Obligations
V.   Fiduciary Responsibilities to Clients................. 13
A. Confidentiality
B. Obedience
C. Loyalty
D. Disclosure
E. Accountability
F. Reasonable Skill, Care and Diligence
VI.  Non-fiduciary Obligations to The Third Party (Customers) 17
VII. Authority of the Agent................................ 18
A. Actual
B. Ostensible
C. Scope of Authority
D. Restrictions on Authority
E. Emergencies Broaden Authority
F. Duration of the Agency
G. Revocation of the Agency
VIII.   Creation of the Agency Relationship................ 20
A. Express Agreements
B. Implied or Accidental Agency
C. Gratuitous Agency
D. Sub-agency
IX.  Summary............................................... 22
Chapter 2................................................... ETHICS 23
I.   Ethics and Parallel Laws.............................. 23
A. What is a Code of Ethics?
B. Organizations
C. Major Codes
D. Basis for Licensing Discipline
II.  Ethics and Real Estate Law............................ 28
A. Preamble Concepts
B. Duties to Clients/Customers
C. Duties to the Public
D. Duties to Realtors®
III. NARPM Code of Ethics and Standards of Professionalism. 39
Chapter 3...................................... TRUST FUND HANDLING 41
I.   Distinguishing Trust Funds from Non-trust Funds....... 41
II.  Purpose of a Trust Fund Account....................... 41
III. Trust Fund Handling Requirements...................... 42
A. Separation of the funds
B. Record keeping
C. Account Imbalance determination
D. Security of Funds
E. Insurance of Funds
IV.  Trust Fund Handling Requirements...................... 42
V.   Trust Fund Records.................................... 44
VI.  Accounting Procedures................................. 45
VII. Trust Fund Audits.................................... 46
VIII.   Sanctions for Violations........................... 46
IX.  Summary............................................... 47
Chapter 4.   FAIR HOUSING....................................... 49
I.   Federal Fair Housing Laws............................. 49
A. Civil Rights Act - 1866
B. Civil Rights Act - 1968 (amended in 1988)
1. Familial Status
2. Race
3. Sex
4. Handicap
5. Color
6. Religion
7. National Origin
C. Illegal Discrimination
D. Parallel California Laws
E. Americans with Disabilities Act
F. Blind and Other Physically Disabled Persons
G. Housing Financial Discrimination Act
H. Equal Credit Opportunity Act
I. Limited exemptions
II.  Penalties for Violation of Fair Housing Laws.......... 51
III. Claiming Parties...................................... 52
IV.  NAR Actions in the Fair Housing arena................. 52
A. Code of Equal Opportunity
B. Article 10 of the Code of Ethics
C. Voluntary Affirmative Marketing Agreement (VAMA)
D. Fair Housing Partnership Resolution
E. Cultural Diversity Program
F. 2003 NAR Signed Memorandum
V.   DRE Regulations....................................... 53
VI.  Fair Housing and Property Management.................. 53
SUPPLEMENTS..................................................... 57
Chapter 1.   Agency
Supplement 1................ Agency Related Actions of the NAR 59
Supplement 2..................... Regulations Affecting Agency 61
Supplement 3......................................... Glossary 65
Chapter 2.   Ethics
Supplement 4............................... NAR Code of Ethics 67
Chapter 3.   Trust Fund Handling
Supplement 5........................................ DRE Forms 75
Supplement 6........... California Real Estate Law, Article 15 81
Chapter 4.   Fair Housing
Supplement 7..................................... HUD Guidance 87
Supplement 8....................... Real Estate Advertisements 91
Supplement 9.............. Fair Housing Partnership Resolution 93
Supplement 10.............................. Fair Housing Logos 103
Supplement 11............... CDFH Fair Housing Complaint Chart 109