Oregon real estate ‘love letters’ law goes into effect as legal challenge awaits Real Estate & Construction

In a hot real estate market, where buyers literally and figuratively line up to make offers on a property, some potential buyers choose to add a personal touch to their offer by submitting what is commonly known as a “letter of love” to the seller. These letters typically describe what a potential buyer likes about the home and often emphasize perceived commonalities between the seller and potential buyer. Under a law that took effect in Oregon on Jan. 1, 2022, sellers’ real estate agents must now reject such love letters, although the law does not prohibit a potential buyer from submitting a love letter. The intent of the law is to reduce opportunities for discrimination in home sales based on race, color, national origin, religion, gender, sexual orientation, gender identity, family status, marital status, or disability, all of which are prohibited by federal law. and state laws. A Bend, Oregon real estate company has filed a legal challenge to the law, and a federal judge will decide later this month whether to suspend the legal ban pending trial.

Legislation

The Oregon Legislature enacted House Bill 2550 to amend ORS 696.805, which relates to the duties of a seller’s agent in a real estate transaction. The law already requires an agent to have duties of good faith and honesty, to present all written offers and other written communications, and to disclose material facts known to the seller’s agent and not apparent or readily ascertainable to a part. The amendment now provides:

To help a seller avoid selecting a buyer based on race, color, religion, gender, sexual orientation, national origin, marital status, or status purchaser’s family, as prohibited by the Fair Housing Act (42 USC § 3601, et seq.), the seller’s agent rejects any communication other than the usual documents in a real estate transaction, including photographs provided by a Buyer.

Neither the statute nor the rule defines what “customary documents” are, but the Oregon Realtor has interpreted the term to mean “disclosure forms, sales agreements, counteroffers, addenda, and reports.” Love letters are not considered normal documents.

Plaintiffs’ Arguments

The realtors who filed the lawsuit say the legal ban on love letters amounts to a violation of the First Amendment rights of realtors and brokers, as well as the First Amendment rights of clients of realtors. In their petition, the plaintiffs argue that the love letter ban is a prohibited regulation of content-based speech. They argue that the law does not advance the state’s interests in preventing discrimination because there is no evidence that love letters contribute to discrimination and, even if they did , the law is not inclusive because it does not prevent a buyer from writing directly to a seller and it does not prevent the seller’s agent from passing information to the seller if the seller’s agent personally knows the buyer or searches on social networks. Finally, the plaintiffs argue that enforcement of existing anti-discrimination laws and/or narrow targeting of letters that actually refer to a protected category would be less burdensome alternatives.

The state’s arguments

The defendants in the lawsuit are Oregon Real Estate Commissioner Steve Strode and Oregon Attorney General Ellen Rosenblum. Their opposition to the realtors’ motion sets the context by describing “Oregon’s centuries-old history of severe and widespread public and private racial discrimination in the sale of residential real estate.” These practices date back to Territorial times when non-white citizens were barred from owning real estate and excluded from homestead programs open to white settlers, continuing through the redlining practices created by the Federal Home Loan Corporation in 1937 and prohibitions of local associations of estate agents from selling houses. in predominantly white neighborhoods to African American households. The result is that stark disparities exist in homeownership in Oregon, for example, between non-Hispanic whites (65.1%) and blacks or African Americans (32%).

Defendants argue that love letters almost always reveal information about the personal characteristics of the potential buyer. Of the 27 examples of love letters produced by the plaintiff estate agents for discovery, the defendants’ expert concluded that 25 of them revealed information about at least one protected characteristic; 13 of the letters included photographs of the potential buyer that indicated race, color, and sex or gender information; 23 directly in the text or through a photograph revealed information about family status; 14 specifically referred to marital status; and 12 disclosed information about sexual orientation. Therefore, the defendants argue that the evidence points to a rational basis for banning love letters, as “it is not only plausible but highly probable that requiring a seller’s agent to ‘it rejects love letters reduces the likelihood that a seller’s decision will be influenced by a protected characteristic of the buyer.’

Opposition to the motion argues that real estate agents do not have standing to enforce the rights of their clients and, even if they did, love letters are commercial speech afforded less protection in under the First Amendment than other expressions protected by the Constitution. As such, defendants argue, the state has a substantial interest in preventing housing discrimination, and the ban on love letters advances that interest. Responding to plaintiffs’ argument that the law is not inclusive, defendants cite case law that states governments have the right to attack issues piecemeal and that the law directly targets real estate agents who are key influencers. in the transaction process and often encourage and facilitate love letters.

Next steps

The plaintiffs filed a motion for a preliminary injunction with the lawsuit in November and requested an expedited review of their motion, which the court denied. The plaintiffs’ response to their motion is due January 20, when the court will take the motion under advisement. Until then, the ban on love letters is in effect and seller’s agents must now reject all letters, photographs or videos provided by a potential buyer.

About Lillian Coomer

Check Also

Book of the Week: A Case About Waiheke

Reading room A love affair gone wrong on Waiheke Island The Premise of Brannavan Gnanalingam’s …