A federal judge ruled that an Oregon law preventing buyer “love letters” is a violation of First Amendment rights. The letters have commonly been included in home offers, with buyers writing to sellers expressing their desire for a home.

Last year, Oregon became the first state in the country to prevent real estate agents from forwarding such letters to sellers. The law, which was introduced by a real estate agent who serves in the state Senate, was based on the concern that the letters may include photographs and videos and personal details about the buyer which could lead the seller to choose among offers based on the buyer’s personal characteristics, in violation of fair housing laws. The Oregon law did not prevent buyers from communicating with sellers directly, however.

In November 2020, a lawsuit was filed in federal court by the Pacific Legal Foundation on behalf of a real estate firm to block Oregon’s ban.

“Today’s ruling preserves the opportunity of home buyers to speak freely to sellers and make the case why their purchase offers should win out,” Daniel Ortner, a Pacific Legal Foundation attorney, said in a statement about the ruling. “Love letters communicate information that helps sellers select the best offer. The state cannot ban important speech because someone might misuse it.”

The court found the ordinance to be too broad in restricting buyers’ speech, saying laws already exist to prohibit sellers from discriminating against buyers’ backgrounds and characteristics. 

Despite the recent ruling, the real estate industry cautions about the use of such letters. The letters could reveal a buyer’s race, national origin, religion, sexual orientation, or other protected characteristics which could sway sellers in one direction in an offer situation. The National Association of REALTORS® has issued warnings over the use of such letters to its members. Several brokerages and real estate professionals also have taken a stance that they will not deliver such letters on behalf of their buyers due to fair housing fears.

Lisa Bates, a Portland State University associate professor in the Toulan School of Urban Studies and Planning, told USA Today that the letters could lead to sellers who may “consciously or unconsciously” choose home buyers who are similar to themselves, which could reinforce racial gaps in homeownership and neighborhood segregation.

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Reprinted with permission

Real estate professionals are legally obligated to uphold fair housing laws, and the language and images you use in your advertising needs to be vetted carefully. REALTORS® also have an obligation to do so under Article 10 of the Code of Ethics.

“Advertisements should never indicate a preference or limitation based on a protected class, which at the federal level includes race, color, religion, sex, disability, family status, and national origin,” Mike Rohde, staff attorney at the National Association of REALTORS®, says in a recent “Window to the Law” video. “HUD recently expanded its interpretation of sex to include sexual orientation and gender identity, and state and local laws may expand the categories of protected classes further.”

Access NAR’s fair housing resources.

Rohde provides a tip: When advertising a property, focus on describing the property, not the buyer or tenant. As such, he cautions against using phrases like “ideal for empty nesters” or “perfect for students” that could raise red flags by implying a preference of one demographic over another. On the other hand, he says phrases like “easy walk to train” or “beautiful Mexican doors” are likely to be acceptable since they describe the property’s characteristics.

Also, Rohde says, just like when you’re advertising properties, describe your services and not whom you want to serve. For example, agents may promote their fluency in a particular language or specialization in an area of the community. But avoid indicating a preference for or limitation to the clients you serve, he says.

Real estate ads are judged using a reasonable person standard, which can evolve over time, he adds. As such, once-overlooked words and images, such as the Confederate flag, could present fair housing concerns nowadays.

©National Association of REALTORS®
Reprinted with permission

The National Association of REALTORS® is leading a large coalition of stakeholders in the real estate industry—property owners, real estate professionals, appraisers, portals, valuation, and public records companies, and others—that is urging the Supreme Court to review and overturn a federal appeals court threatening copyright liability for the use of floor plans in the sale of a home. Realtor.com® operator Move Inc. and the Council of Multiple Listing Services also have each filed briefs in support of reversing the lower court’s opinion.

On Thursday, the coalition filed an amicus curiae (friend of the court) brief with the nation’s highest court, seeking a review of a 2021 Eighth Circuit ruling in Designworks Homes Inc. v. Columbia House of Brokers Realty. Designworks and its owner, Charles James, claimed two real estate companies in Columbia, Mo., had violated copyright law when they created floor plans to assist in the sale of homes that James had built.

A U.S. District Court had ruled in favor of the real estate companies, concluding that a statutory defense shielding the creation of “pictures” or “other pictorial representations” of architectural works covered floor plans. The appeals court disagreed that the law extended to floor plans and vacated the district court’s ruling.

The ruling has chilling implications for homeowners and their agents throughout the country, says NAR General Counsel Katie Johnson. Floor plans are fundamental to the buying, selling, appraisal, and renovation of homes. Buyers rely on them to get a feel for the flow of a house before touring it; appraisers use them to develop an opinion of value; and owners and building contractors use them for a variety of purposes—from furniture installation to home improvement projects.

The brief cited NAR’s 2021 Home Buyers and Sellers Generational Trends Report, which showed that more than two-thirds of online home shoppers found floor plans to be “very useful” and noted that new technologies make it easy to measure properties and create floor plans using a smartphone.

The American Property Owners Alliance(link is external), which joined in the brief, cited its own data(link is external) showing that “89% of respondents strongly agree homeowners should be able to create a floor plan of their home anytime they want and select whomever they want to fulfill that task.”

“It is a safe bet that most Americans would be startled to hear they could be sued for copyright infringement for making floor plans of their home,” coalition members said in the brief, adding that the ruling threatens to severely limit property rights. “Even setting aside litigious home designers, the decision … opens up a new hunting ground for enterprising copyright trolls.” The brief cited one such company that has filed more than 100 copyright infringement suits based on floor plans over the last decade or so.

According to the rules of the Supreme Court, four of the nine justices must vote to accept a case; a decision on whether the court will review the case is expected this year. “NAR, our institutes, societies and councils, and all other entities who signed on to this effort share the common goal of making property ownership desirable and feasible for consumers,” Johnson says. “By joining together in filing this brief, we are asking the Supreme Court to acknowledge that homeowners should be able to create and use floor plans without fear of litigation throughout the ownership and sale of their homes.”

©National Association of REALTORS®
Reprinted with permission

Homeownership rates for many minority groups continues to be well below that of whites, and discriminatory policies are often blamed for that. During National Fair Housing Month in April, many housing groups and organizations are bringing the racial housing gap to the forefront and asking others in the real estate industry to support programs that seek to make a change.

Realtor.com® announced it is teaming with the Homeownership Council of America to donate the first $100,000 to the new Equity Down Payment Assistance Fund, for people of color and low- to moderate-income buyers. Realtor.com® says it will match every donation by HCA’s Equity DPA fund through June 30, up to $100,000. It’s asking leaders in the real estate industry to donate to HCA’s Equity DPA fund to help minorities and low- to moderate-income consumers afford down payments and closing costs.

“Survey data shows having enough for a down payment is one of the largest barriers to homeownership and, with this fund, we can directly help people break through to start building generational wealth,” says Mickey Neuberger, chief marketing officer for Realtor.com®.

The homeownership rate for Blacks is 43.1%, 48.4% for Hispanics, and 61.2% for Asian Americans and Pacific Islanders. The ownership rate for Whites is 74.4%, realtor.com® says.

“We believe it’s our responsibility to not only address [the] disparity in homeownership but bring others alongside to take up the challenge,” Neuberger says. “As a company, we strive to make a positive impact on fair housing issues, but as an industry, we have the power to eliminate it.”

Realtor.com® has launched its Closing the Gap Challenge focused on increasing the homeownership rate of racial minorities. Other initiatives in the program include a new down payment assistance search tool(link is external) where consumers can see if they’re eligible for programs, a down payment assistance guide(link is external), and a free First-Time Homebuying 101 e-book(link is external) offered in both English and Spanish, among other programs.

©National Association of REALTORS®
Reprinted with permission

What you need to know to serve this protected class.

Definition: Federal fair housing law defines a person with a disability as any individual with a physical or mental impairment that substantially limits one or more major life activities. Some disabilities, such as blindness or mobility impairment, are readily observable, while others are invisible.

What’s required: Besides prohibiting discrimination, the law requires housing providers to make reasonable accommodations in rules or policies—such as assigning parking spaces—and allow reasonable modifications at the tenant’s expense—such as the installation of grab bars. HUD says 60% of fair housing complaints it receives relate to reasonable accommodation requests.

Assistance animals: The law says housing providers must modify or make exceptions to pet policies to allow a person with a disability equal opportunity to enjoy use of the property. In 2020, HUD released guidance on assessing a request. Key takeaways:

• You must reply promptly to a request for a reasonable accommodation.
• You may seek confirmation of a connection between the individual’s disability and the animal if the need for the accommodation is not readily apparent or known.
• You may request information verifying the individual’s disability and need for the accommodation. In most cases, medical records aren’t needed—a credible statement by the individual or reliable third party is sufficient.
• You may refuse a reasonable accommodation for an animal that poses a direct threat that can’t be eliminated or reduced by the individual controlling the animal.
• Before denying a reasonable accommodation request due to a lack of information confirming the individual’s disability or need for an animal, engage in a good-faith dialogue with the requestor.

Advertising: When advertising property for sale or rental, use factual language to describe the property. Avoid describing what type of person might want to—or not want to—buy or lease the property. Unacceptable: ads that disallow handicap accessories. Acceptable: phrases that describe the property characteristics, such as “third-floor walk-up,” or neighborhood characteristics, such as “bike trails nearby.”

Sources: hud.gov; Real Estate Brokerage Essentials; “Window to the Law: Fair Housing Assistance Animal Guidance”

©National Association of REALTORS®
Reprinted with permission