California Real Estate Salesperson Exam Practice - Quesiton 36

Question

A restrictive covenant contained in a deed which prohibits sale to persons of a particular race will:

Selections

• A. Invalidate the conveyance

• B. Have no effect in the conveyance and the covenant will not be enforceable

• C. Create the power in the grantee to void the conveyance

• D. Retain in the grantor the power to enforce the covenant 

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Answer: B

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5 Keys Summary

• A restrictive covenant in a deed that prohibits the sale of property based on race will not be enforceable and will have no effect on the conveyance of the property.

• The Supreme Court ruled that judicial enforcement of racial covenants in real estate constitutes state action, violating the Fourteenth Amendment, making such restrictions legally unenforceable.

• Title VIII of the Civil Rights Act of 1968 (Fair Housing Act) and California's Fair Housing Law explicitly prohibit discrimination based on race in the sale, rental, and financing of residential real estate.

• Any private restriction in a deed, such as a discriminatory racial covenant, that violates public policy is legally deemed to have no executive validity or effect.

• Such discriminatory covenants are considered unlawful, illegal, and unenforceable under federal and state civil rights legislation.

Explanations

A restrictive covenant within a deed that attempts to prohibit the sale of property to individuals of a particular race will have no legal effect on the conveyance and is not enforceable. The United States Supreme Court, in Shelley v. Kraemer (1948), ruled that judicial enforcement of racial covenants in real estate constitutes state action and is therefore a violation of the Fourteenth Amendment. Further rulings in 1972 clarified that recording deeds with racial restrictions also violated the Fifth Amendment and the Federal Fair Housing Law. The FairHousing Act (Title VIII of the Civil Rights Act of 1968) explicitly prohibits discrimination in the sale, rental, and financing of residential real estate based on race, national origin, religion, and gender.

Concepts Definitions

• Restrictive Covenant: An agreement or promise, often found in a deed, that limits or restricts the use of real property. While some private restrictions can be valid, those based on discriminatory factors are not.

• Racial Discrimination: The act of treating individuals unequally or denying them rights based on their race. In real estate, this is illegal.

• Fair Housing Act (Title VIII of the Civil Rights Act of 1968): A federal law prohibiting discrimination in housing transactions (sale, rental, financing) on the basis of race, color, religion, sex, national origin, disability, or familial status.

• Shelley v. Kraemer (1948): A landmark Supreme Court case that declared racially restrictive covenants unenforceable by state courts, as such enforcement would violate the Equal Protection Clause of the Fourteenth Amendment.

• Fourteenth Amendment: A constitutional amendment that guarantees equal protection under the law for all citizens, prohibiting states from enacting or enforcing laws that discriminate.

• Unenforceable: A term describing a contract or a clause within a contract that cannot be legally upheld or put into effect by a court of law due to its illegality.