The Southern District of New York reminded purchasers of real estate in Coppelson v. Serhant that real estate agents are, in fact, trying to sell real estate so they can earn a commission and will make statements to buyers intended to accomplish that goal. 

The plaintiffs, purchasers of an investment property in Manhattan, complained that Ryan Serhant misrepresented that the property would be worth over $5M in a short period of time and that that it was priced 20% lower than comparable properties. The court, in dismissing the case, reminded buyers that they can, and must, perform their own due diligence because sellers of real estate will always talk up how great their property is and because "few sellers will state that the property is priced at an unfavorable level and that it will decrease in value or has no real investment potential." This conclusion is obvious - brokers will engage in puffery to sell real estate and earn a commission, and the courts won't protect your naivete. Whether that is good for business or good for building relationships of trust is another question for another day. 

Another important takeaway from this case is the reminder that a broker's failure to follow the requirements of RPL §443 (e.g. improperly filling out an agency disclosure form) is not the basis for a lawsuit. This is something I encounter nearly every day - buyers discovering something unpleasant about their property after they close and then suing the broker for not telling them about it and for not disclosing that they represented the seller too ("the broker didn't tell me about the oil leak in the basement because they wanted their commission!"). Often there is not actually a dual agency relationship because it is perfectly fine for a broker to only represent the seller with the buyer remaining unrepresented, but many buyers believe the listing broker they met at the open house or showing represents their interests too (hence the intended purpose of the RPL §443 agency disclosure requirement). Regardless, the sole remedy for agency disclosure violations is regulatory action by the Department of State, not a lawsuit.

All of this begs the question, is the current state of regulatory enforcement sufficient to protect consumers from what they perceive as wrongful salesmanship and flat-out incorrect agency disclosures? If not, what would you change? 

The EEOC just released its Compliance Manual on Religious Discrimination and lack of religious faith is protected from discrimination at the workplace.

You hear that? Atheists & agnostics - you matter too!

Here is what the manual states:

Definition of Religion

Comment: Some commenters expressed concern that the draft did not make sufficiently clear that Title VII protects against discrimination based on a lack of religious faith.

Response: The Commission has made additions to reference repeatedly that discrimination based on a lack of religious faith is prohibited.

A 97 page report was just issued by the NYS Senate on persistent racial and ethnicity-related housing discrimination and this report is going to change the real estate brokerage industry in NYS forever. 

Are you ready? 

According to the report, housing discrimination has changed over the last hundred years from being overt to subvert. However, housing discrimination clearly still exists and something has to be done about it now. 

Would it surprise you to learn that in 2019 there were 28,880 reported complaints of housing discrimination in the USA? Again, twenty-eight thousand complaints!!!

Did you know that the precursor to the National Association of Realtors (NAR) required its members to discriminate as follows:

A Realtor should never be instrumental in introducing into a neighborhood a character of property or occupancy, members of any race or nationality or individuals whose presence will clearly be detrimental to property values in that neighborhood. 

While this overt discrimination is less prevalent today, the report explains that: 

Today, bad actors often use subtler forms of discrimination; they direct homebuyers of different apparent backgrounds toward different communities, impose more stringent financial requirements on people of color, and provide unequal services to clients based upon their race or ethnicity.

[S]ome real estate agents utilize subtle ways to discriminate, like racially coded guidance and disparate treatment in services offered.

In acknowledging that real estate brokers and agents are the gatekeepers for neighborhoods, the report makes the following categories of recommendations:

1. Develop a NYS Fair Housing Strategy
2. More Proactive Enforcement of Fair Housing Laws (i.e., testing, more funding, & data collection)
3. Licensing & Renewal Training Requirements (i.e., more training from better instructors for licensing & continuing education with a focus on implicit bias trainings)
4. Increased Penalties & Broader Accountability (i.e., $2K fines increased from $1K & managers responsible like brokers with increased experience requirements to qualify)
5. Standardized Broker Policies with Public (i.e., prospect identification, exclusive broker agreement requirements, & pre-approval for mortgages)
6. Internal Brokerage Policies (i.e., brokerages need updated policy manuals with fair housing statements & explanations of the consequences for violations)
7. State & Local Governments to Affirmatively Further Fair Housing (i.e., enforcement is everyone's responsibility) 
8. Brokers Must Open Offices in Communities of Color (i.e., 12 firms control 50% of listings, but only about 20% to 33% of the listings in minority communities)
9. More Diverse Brokerage Workforce (i.e., NAR's members are 80% white; need Diversity, Equity, & Inclusion initiatives to attract talent to the industry) 

There is very little truth in the old refrain that one cannot legislate equality. Laws not only provide concrete benefits, they can even change the hearts of men some men, anyhow for good or evil.

It's time to change from being part of the problem to being part of the solution. Are you ready?

In housing discrimination, you can't treat people differently in the terms, conditions, privileges, and/or availability of housing. 

Yet, you aren't just responsible for your intended acts of discrimination, known as disparate treatment discrimination. Instead, you are also responsible for your unintended acts that impact groups of people as a secondary effect, which is known as disparate impact discrimination.

Think about it this way, if you don't rent to women, as a policy, that is clearly an act of disparate treatment sex discrimination. However, if you don't rent to long-haired people, aren't you still impacting women in sex discrimination under a different name? That is called disparate impact discrimination.

As to disparate impact discrimination, President Biden just ordered HUD to make sure that the regulations on disparate impact discrimination is preventing practices with an unjustified discriminatory effect. 

Do you think that there should be disparate impact discrimination laws? If so, what do you think they should be? 

On Day 1 of President Biden's Term, he expanded our understanding of the Fair Housing Act by making clear that it includes protections against discrimination on the basis of gender identity & sexual orientation. 

See his Executive Order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation for your full understanding.

As explained by the President, the US Supreme Court ruled in 2020 that employment discrimination laws, which expressly prohibit sex discrimination, also prohibit discrimination on the basis of gender identity and sexual orientation; and that the same reasoning behind the Supreme Court's ruling will now be applied to the Fair Housing Act's prohibition of discrimination in the sale and rental of housing across our nation. 

In fact, the Executive Order put all perpetrators on notice by stating that the government will issue plans, within 100 days, to effectuate its policy of enforcing these prohibitions against discrimination on the basis of gender identity or sexual orientation.

While many states, such as NY, and other locales, already prohibit gender identity and sexual orientation discrimination in housing, the Federal Government stepping in to enforce violations can change the game.

How will you change your business because of this Order?  

A homosexual detective was just given his chance to prove that he experienced workplace discrimination at a trial and recoup damages.

Here are his facts:

• His homophobic colleagues vindictively called other officers wherever he was stationed & told them to harass plaintiff because he was gay;
• 2 Sergeants constantly made homophobic slurs at civilians & gay officers in his presence; 
• He endured over a year of homophobic derision, harassment, and verbal abuse;
• He was singled out to do tasks, which his peers were not required to do, such as:
• He was repeatedly required to enter a holding cell, by himself, with prisoners still inside, while plaintiff carried metal and wooden cleaning implements. This was potentially dangerous, as plaintiff could have been overwhelmed & attacked by the prisoners. Other officers were not required to do it, as it was usually a task for the maintenance crew; 
• He was required to go on foot patrol alone during the midnight shift in dangerous areas at the 77th Precinct while other officers patrolled with partners;
• He was given extra work when he arrived on the job; and
• He experienced some new or escalated conduct after he started to fight the discrimination, which could be deemed retaliatory.

According to Business Insider, Dollar General is paying their employees to get the COVID vaccine, but is that legal? 

Back in 2017, the federal courts, in AARP v. EEOC, addressed the issue of paying employees for participation in wellness programs and found that both the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act were violated because the incentives permitted rendered the programs not voluntary, as required by law. The incentive, at issue in the case, was "up to 30% of the cost of self-only coverage." 

How does that comport with what Dollar General is now doing? 

They are offering four hours of pay to their employees. 

Is that too much to make participation voluntary? 

Ironically, the Equal Employment Opportunity Commission is proposing a new regulation about this voluntary standard in the Federal Register for public comment. This new regulation proposes to change the 30% incentive limit (as addressed in the federal case above) to a de minimis incentive limit. In fact, the regulation gives examples of a permitted de minimis incentive, like a water bottle or modest gift card.

Isn't four hours of pay worth a lot more than a water bottle? Is Dollar General going to get sued for this program. What do you think? 

How do you get your Paycheck Protection Program Second Draw Loan? 

The rules are out now and here are the top 10 rules that you should know:

1. Last day to apply & receive a new PPP is March 31, 2021;
2. To qualify, you must use or will use full amount of your First Draw PPP loan on or before disbursement of second loan; 
3. SBA may forgive up to the full principal loan amount; 
4. Interest rate is 1%; 
5. Maturity is 5 years; 
6. Borrower must have 300 or fewer employees;
7. Borrower must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019 (quarterly comparison); 
8. When comparing 2020 relative to 2019, any forgiveness amount of a First Draw PPP Loan that a borrower received in calendar year 2020 is excluded from a borrower's gross receipts (not disqualified from the second loan because of the first one);
9. Each hotel, restaurant, or news organization with a location owned by a parent business in a separate legal business entity and employing not more than 300 employees is permitted to apply for a separate PPP loan; and
10. Maximum loan amount = 2.5 months of the borrower's average monthly payroll costs.

• You can get a second loan
• What the qualifications are to apply
• What size businesses can apply
• How this works with taxes
• If the first loan needs to be forgiven to get the second loan