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.

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

We are updating our platforms for 2021 and are now encouraging unrestricted commenting. 

Say what you want and share as you feel comfortable. This platform is for you - the business community. 

We promise to do our best to answer your questions and participate in the discussion.

Please know that there is no attorney / client relationship established by participating in this blog and it is a public, non-confidential, forum. So, watch what you say because the world will know. No spam, discrimination, or harassment will be tolerated and all are welcome.

Together, we are going to reemerge as a stronger business community in 2021. 

Here is to a great year!

On 12/28/2020, the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 became law. 

This law effectively stops all residential foreclosures in NYS until May 1, 2021, but it does nothing about the borrower's obligation to repay their loan.  

Do you think that makes sense?

Isn’t that just delaying the inevitable foreclosure crisis?

Shouldn't something be done about the loan too? 

Here is how the law works – a homeowner needs to submit a hardship declaration to their lender and magic, no more foreclosure until May.

The Details:

o   Either the court or lender (depending on foreclosure status) must provide the borrower with a statement explaining the law.

o   To qualify, a borrower must be suffering a financial hardship including, such as

§  A significant loss of household income;

§  Increase in necessary expenses;

§  Childcare responsibilities;

§  Moving expenses; and/or

§  Other circumstances negatively affecting the borrower’s ability to find meaningful employment.

o   Sample hardship declarations will be available on the Office of Court Administration website.

o   New Foreclosures – If the borrower does not provide the declaration, the lender is required to file all sorts of documents to commence a foreclosure proceeding, including:

§  Affidavit of Service of the Hardship Declaration in English and in the borrower’s primary language.

§  Affidavit of Service of RPAPL 1303 and 1304 notices; and

§  Affidavit of the Petitioner/Petitioner’s agent attesting that the Petitioner or his agent did not receive a Hardship Declaration from the Borrower.

o   Existing Foreclosures – Paused (stayed) for at least 60 days to provide the borrower time to complete and submit the hardship declaration.

o   This also stops foreclosure sales if the case already was decided by the court in a judgment.

Make no mistake, this new law does NOT excuse borrowers from paying the mortgage. 

So, what is the point? 

Isn’t it misleading borrowers into digging an even bigger financial hole?

What do you think? 

Back on October 11, 2019, the NYS Human Rights Law was modified with a new standard for actionable employment sex discrimination. The new standard was intended to align NYS more closely with the NYC Human Rights Law. 

The new standard is that conduct that exceeds "petty slights or trivial inconveniences" is actionable. 

As to what that means, the NYC law was interpreted by the Second Circuit Court of Appeals (Federal Court) in Mihalik v. Credit Agricole Cheuvreux North America, Inc., which is the leading case. 

Now, we have a leading case interpreting the NYS law as well by a State Court. 

On December 15, 2020, the NYS Appellate Division decided Franco v Hyatt Corp. and found the following allegations to constitute conduct that exceeds petty slights or trivial inconveniences:

1. Supervisor made repeated sexual advances towards him, including reaching out to touch his face and holding his hand in an elevator while they were alone.
2. Supervisor also initiated conversations that made him uncomfortable, telling him she had a "crush" on him, telling him she was single and twice inviting him to her home to repair "a hole" in her apartment. 
3. Supervisor said she had a tattoo, adding that "You have to undress me to see it." 
4. After victim rebuffed advances, supervisor brought him to the Human Resources manager's office to complain about his work product and that she solicited complaints about him from other coworkers.

On Tuesday December 15, 2020 at 12:30PM, the NYS Division of Human Rights is hosting a virtual event about discrimination and COVID-19. 

The event will discuss "unjust targeting and attacks against Asian Americans, systemic health care disparities in Black and Brown communities, and the challenges, particularly in workplaces, for people with disabilities." 

As discrimination litigators and trainers we will be attending, will you? 

Starting on December 11, 2020 there will be time limits to remedy any determinations of building code violations in NYS per new law. 

The Real property Actions and Proceedings Law (RPAPL) 777(a) has been amended to ensure that no code violations or dangerous conditions remain outstanding for "more than sixty days from the date of the order of the court" if the owner (or mortgagee or liener) enters into a consent order to remedy the issue upon the petition being granted against such owner. 

We expect that this sixty day period will be applied by the various town / city / village attorneys in plea agreements as well. 

Now, there is a rush to fix unless good cause for delay can be shown.

Effective November 10, 2020, NYS strengthened its laws against lawsuits that are brought and intended to chill free speech, called Strategic Lawsuits Against Public Participation ("SLAPP suits"). 

NYS' prior anti-SLAPP / free speech law had been limited to protecting speech concerning "controversies over a public application or permit, usually in a real estate development situation." 

Now, the anti-SLAPP law deals with "anything other than a 'purely private matter.'" Additionally, the law now requires courts to provide costs and attorney's fees if a lawsuit against public petition and participation was initiated in bad faith to chill speech. 

The new laws are Civil Rights Law 70-a, which deals with the costs and attorney's fees, and Civil Rights Law 76-a, which expands the types of speech that is protected by the anti-SLAPP law. Specifically, Civil Rights Law 76-a now permits a suit concerning "[a]ny communication in a place open to the public or a public forum in connection with an issue of public interest; or ii. [a]ny other lawful conduct in furtherance of the exercise of the constitutional right of free speech in connection with an issue of public interest, or in furtherance of the exercise of the constitutional right of petition."

To read the full bill, click here. 

Get your anti-discrimination guidance starting on December 10, 2020 on HUD's new searchable website, which will also give guidance on lending, foreclosures, and much more. 

Currently, guidance is available here.  

Starting on December 10, 2020, HUD will make available "a single, searchable, indexed website," and make guidance subject to a 30 day public comment period with a procedure for the public to petition to modify or withdraw guidance per its Interim Final Rule available at 85 FR 71537.

HUD guidance documents "are statements of general applicability and future effect that set forth policy on statutory, regulatory, or technical issues or interpret statute or regulation." In plain English, guidance advises industry as to HUD's interpretation of laws as applicable to described activity. As such, industry is better able to function, in a regulated environment, when industry can request direction on gray areas of law prior to making investment or taking action in that area. 

As background, "[o]n October 9, 2019 (84 FR 55235), the President issued E.O. 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents," which "requires that each Federal agency take certain actions to ensure the transparent availability and use of guidance documents." This Interim Final Rule is made in satisfaction of the E.O.

Effective October 26, 2020, HUD implemented a new disparate impact fair housing standard.

Disparate impact discrimination occurs when housing practices have an unjustified discriminatory effect even though they were not motivated by a discriminatory intent. 

The new standard exists at 24 CFR 100.500 and it makes a claim of disparate impact discrimination far harder to bring and even harder to prove as compared to the prior HUD standard.

Previously, the regulation did not contain an express pleading standard and instead, only required the plaintiff to prove "that a challenged practice caused or predictably will cause a discriminatory effect." 

Now a plaintiff must "sufficiently plead facts to support each of the following elements: (1) That the challenged policy or practice is arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective such as a practical business, profit, policy consideration, or requirement of law; (2) That the challenged policy or practice has a disproportionately adverse effect on members of a protected class; (3) That there is a robust causal link between the challenged policy or practice and the adverse effect on members of a protected class, meaning that the specific policy or practice is the direct cause of the discriminatory effect; (4) That the alleged disparity caused by the policy or practice is significant; and (5) That there is a direct relation between the injury asserted and the injurious conduct alleged."

With respect to the 3rd element, that is a very heavy burden for a plaintiff to satisfy at the pleading stage of litigation because the requisite evidence is often unavailable until the parties have engaged in the discovery process. 

Moreover, while the prior regulation provided that a defendant would then have to rebut the claim by "proving that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests[,]" a defendant now can just rebut the first element "by producing evidence showing that the challenged policy or practice advances a valid interest (or interests) and is therefore not arbitrary, artificial, and unnecessary." Changing the term from a "substantial" interest to "a valid interest" results in the defendant's burden seemingly being far lower.

Moreover, under the new standard, once the defendant rebuts the first element, "the plaintiff must prove by the preponderance of the evidence either that the interest (or interests) advanced by the defendant are not valid or that a less discriminatory policy or practice exists that would serve the defendant’s identified interest (or interests) in an equally effective manner without imposing materially greater costs on, or creating other material burdens for, the defendant." Previously, this was the defendant's burden. 

Regardless, there are now also 3 express defenses available, including that "(i) The policy or practice is intended to predict an occurrence of an outcome, the prediction represents a valid interest, and the outcome predicted by the policy or practice does not or would not have a disparate impact on protected classes compared to similarly situated individuals not part of the protected class, with respect to the allegations under paragraph (b). This is not an adequate defense, however, if the plaintiff demonstrates that an alternative, less discriminatory policy or practice would result in the same outcome of the policy or practice, without imposing materially greater costs on, or creating other material burdens for the defendant. (ii) The plaintiff has failed to establish that a policy or practice has a discriminatory effect under paragraph (c) of this section. (iii) The defendant’s policy or practice is reasonably necessary to comply with a third party requirement, such as a: (A) Federal, state, or local law; (B) Binding or controlling court, arbitral, administrative order or opinion; or (C) Binding or controlling regulatory, administrative, or government guidance or requirement."

Housing participants should be particularly interested in the third available defense in the form of a controlling administrative opinion or binding regulatory guidance. It is strenuously suggested that every housing industry participant seeks such opinion or guidance as a necessary incident of any business plan covering a new product or service. To fail to do so is just reckless in a world where such a defense exists. 

That being said, it is noted that this regulation only pertains to a federal housing discrimination claim and states and locales may offer increased protections to their citizens. So, these other laws must also be analyzed for housing participants to the extent that they afford disparate impact claims (e.g., NYC Admin. Code). 

There are new laws about debt collecting starting on October 30, 2021. 

Specifically, amendments to Regulation F (12 CFR Part 1006), which implements the Fair Debt Collection Practices Act (FDCPA), were published on October 30, 2020 in the Federal Register and when these amendments become effective, on October 30, 2021, the entire debt collection industry in the United States will be forever changed.

These changes mainly concern updating the FDCPA with respect to its application to modern forms of communication via technology, inclusive of a safe harbor for communications via text or email. However, the final rule is 653 pages so it's far more extensive than that simplistic understanding and should be reviewed, at length, by any industry participant. 

To navigate the rule, it's recommended that you utilize the table of contents. The main sections of the amendment, which should be studied, are as follows:

1. Communications in Connection with Debt Collection;
2. Acquisition of Location Information;
3. Harassing, Oppressive, or Abusive Conduct;
4. False, Deceptive, or Misleading Representations;
5. Unfair or Unconscionable Means;
6. Other Prohibited Practices;
7. Disputes and Requests for Original-Creditor Information;
8. Sending Required Disclosures; and 
9. Record Retention

As background, the FDCPA was enacted in 1977 because "[t]here [was] abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors" whereas these practices "contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy." According to the Consumer Financial Protection Bureau "[d]ebt collection is estimated to be a $12.7 billion-dollar industry employing nearly 123,000 people across approximately 7,800 collection agencies in the United States." 

Make no mistake, these regulations are particularly important because "[c]onsumers... file thousands of private actions each year against debt collectors who allegedly have violated the FDCPA." Available damages in these lawsuits include up to $1,000 plus attorneys' fees for individuals and up to $500,000 or 1% of the net worth of the debt collector for class actions (15 USC 1692k). As a result, debt collectors who are unfamiliar with these amended rules, when they become effective, are in for a world of hurt. 

By the way, there is going to be another rule on this topic in the nearterm and it will address the required disclosures when debt collectors are pursuing time-barred debts (A/K/A, outside the applicable statute of limitations for suit). Stay tuned. 

On October 29, 2020, the NYC City Council approved a new law that requires the Department of Social Services to provide a letter to applicants about their rights to be free from source of income discrimination. 

This is yet another reminder that landlords and brokers need to understand that source of income discrimination is illegal and can subject them to large fines / judgments, loss of licensing, and terrible public relations issues. 

Landlords and brokers should review the NYC Commission on Human Right's Best Practices for Licensed Salespersons and Brokers to Avoid Source of Income Discrimination and revise their applications, leases, policy manuals, and trainings to reflect this new expected law. 

For help, contact Lieb Compliance. 

The new law adds new §21-141.1 to the Administrative Code as follows:

Information regarding lawful source of income discrimination. a. Definitions. For purposes of this section, the following terms have the following meanings: CityFHEPS. The term “CityFHEPS” means the city fighting homelessness and eviction prevention supplement program established pursuant to chapter 10 of title 68 of the rules of the city of New York or any successor program. Covered entity. The term “covered entity” means the owner, lessor, lessee, sublessee, assignee, or managing agent of, or other person having the right to sell, rent or lease or approve the sale, rental or lease of a housing accommodation, constructed or to be constructed, or an interest therein, or any agent or employee thereof, who is subject to the prohibition on discrimination based on lawful source of discrimination pursuant to subdivision 5 of  section 8-107. Lawful source of income. The term “lawful source of income” has the meaning as set forth in section 8-102. Shopping letter. The term “shopping letter” means a letter issued by the department to assist a household in its housing search that identifies the household as potentially eligible for CityFHEPS and lists the maximum rent. b. The department shall provide written notice regarding the protections of section 8-107 related to lawful source of income at the time that a CityFHEPS applicant receives a shopping letter. Such notice shall be developed by the New York city commission on human rights pursuant to paragraph p of subdivision 5 of section 8-107 in consultation with the department.

It also amends §8-107(5) by adding new paragraph (p) as follows:

For purposes of this paragraph, the term “CityFHEPS” means the city fighting homelessness and eviction prevention supplement program established pursuant to chapter 10 of title 68 of the rules of the city of New York or any successor program. The commission shall develop and disseminate a written notice of protections of this subdivision related to lawful source of income. The notice shall be made available to the department of social services for use in accordance with section 21-141.1. The notice shall include, at a minimum, the following information:

1. Examples of different forms of lawful source of income; 

2. A description of covered entities required not to discriminate on the basis of lawful sources of income;

3. Examples of actions that may indicate discrimination based on lawful source of income in violation of title 8, such as refusing to accept lawful source of income for rent payment, publishing any type of advertisement that indicates a refusal to accept any lawful source of income, and refusing or delaying repairs because a person uses any lawful source of income for rent payment, publishing any type of advertisement that indicates a refusal to accept any lawful source of income,  and any additional actions landlords or brokers use to unlawfully discriminate against a person on the basis of their using any lawful source of income;

4. A statement that it is illegal for covered entities to refuse to accept a CityFHEPS subsidy for payment of rent or a security deposit voucher in buildings subject to the prohibition on discrimination on the basis of lawful source of income pursuant to section 8-107;

5. A statement that it is illegal for covered entities to request additional payments for rent, a security deposit or broker’s fee because an individual receives rental assistance;

6. A statement that it is illegal for covered entities to publish any type of advertisement that indicates a refusal to accept rental assistance;

7. A statement that it is illegal for landlords to refuse or delay making repairs to an individual’s unit because such individual pays rent with a CityFHEPS subsidy;

8. A statement that an individual has the right to be free from discriminatory, harassing or threatening behavior or comments based on such individual’s receipt of or application for CityFHEPS;

9. Directions on how to contact the commission, the department of social services’ source of income discrimination unit, the state division of human rights and the office of the state attorney general;

10. A description of potential remedies available at the commission if a covered entity is found to have engaged in discrimination based on lawful source of income; and

11. Any other information deemed appropriate by the commissioner and the commission in consultation with the department of social services.

Upon the Mayor's signature, the law will take effect 180 days thereafter.