The Rules Just Changed: Crime Rates and School Data Are Now First Amendment Protected—What Brokers Must Know

The landscape of Fair Housing liability is shifting on the federal level. While the industry has long avoided discussing "neighborhood quality" for fear of steering, a landmark April 24, 2026, HUD Memo has directed a change in course. Now, according to HUD, truthful, non-racial discussions are protected by the First Amendment when discussing neighborhood quality. However, this freedom comes with a modern twist: the risk of Disparate Impact Claims, like those that were reported on in Newsday's Long Island Divided.

The Lesson from Criminal Background Checks

To understand today's risk, we must first look backwards to 2016 HUD guidance where HUD established that even "neutral" policies, like blanket bans on tenants with criminal records, can be discriminatory because they disproportionately affect racial minorities. This created a three-step burden-shifting test:

1. Does the policy have a discriminatory effect?

2. Is there a "legitimate business interest"?

3. Is there a "less discriminatory alternative"?

2026 HUD Guidance: Facts vs. Steering

HUD’s 2026 position changes that test. HUD now states that providing identical, factual information about crime rates or schools to all clients is not "racial steering" because steering requires unequal treatment or discriminatory intent. That said, factual does not mean the information merely exists, but is actually accurate and not outdated. 

The Convergence: A New Theory of Liability

Yet, as discovered in Long Island Divided, the issue is that real estate brokers do not always give all clients the same information. To do so, a broker would be well served by putting the information into marketing materials to prove its the same. That works well for listing side brokerage when highlighting the positive of an area, but what happens in buyers' brokerage when highlighting the negative? Even on buyers' brokerage, if those materials highlight a negative, the real estate broker will be hurting their chances of obtaining future listings in that area, which is why most just do a discretional whisper. Yet, that whisper can get a broker sued for discrimination even after HUD's 2026 memo.

On top of that, don't forget local laws, such as NYC’s 2025 Fair Chance in Housing Act, which mandates case-by-case reviews of criminal histories rather than blanket denials, agents must be careful with neighborhood data. If a firm’s "neutral" crime-rating system systematically discourages buyers from minority-heavy tracts, it could trigger a Disparate Impact claim—even without discriminatory intent.

Strategic Recommendations

• Fact-Only Communication: Use objective, third-party data rather than anecdotal descriptions.

• Consistency is King: Provide the same data sets to every client to avoid steering allegations, through written proof of consistency.

• End Blanket Prohibitions: Move away from "blacklisting" certain ZIP codes because that is often undertaken based on discriminatory feelings rather than data. 

When these claims hit, they don’t start small. Lieb at Law represents brokerages in high-stakes Fair Housing and disparate impact litigation and helps prevent claims through proactive compliance strategy. Contact us to discuss your exposure.

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Explained: Acting as Your Own Broker and Earning Commission When Buying Property in NY

Under New York law you may act as your own broker when purchasing real estate, and secure a commission, but there are several important considerations.

First, you do not need to be a member of REBNY or NAR to earn a commission. In fact, REBNY and NAR have expressly stepped out of the commission enforcement role following the Sitzer/Burnett v. NAR litigation and the March/Friedman v. REBNY litigation. That said, there is no longer an automatic right to commission simply by being a licensed real estate broker. Instead, you must confirm whether the seller (or the seller’s listing broker) is offering a buyer-side commission. If not, you may need to “gross up” your offer to include the amount of the commission you expect to earn. Either way, a party to the transaction can share commission pursuant to RPL 442(2). 

The antitrust lawsuits removed the centralized practice of posting cooperative commission offers on MLS/RLS systems, but they did not prohibit private commission arrangements. Many listing agreements still authorize listing brokers to offer compensation to buyer brokers. When representing a third party, note that any commission paid by the listing broker cannot exceed the amount stated in your buyer-broker agreement, if you are a real estate licensee.

You do not need to sign a REBNY or NAR co-brokerage agreement to participate in a transaction and you do not need to associate with another brokerage firm solely to collect a commission if you are a party to a transaction.

For reference about REBNY & NAR being out of the commission game, see:

• REBNY RLS Compensation Fields Update

• NAR Settlement FAQs

Practice Tip: As brokerage counsel, Lieb at Law strongly advises reviewing the specific listing agreement and, if applicable, the settlement documentation of the listing broker to determine what commission terms govern your deal. For smaller brokerages that have not issued their own settlement forms, the default terms from Sitzer/Burnett typically apply. Keep in mind that REBNY litigation is ongoing and not at final disposition, so these rules may continue to evolve. Updated September 2025. 

Have questions about brokerage law? Lieb at Law counsels real estate brokers and salespersons on commission disputes, licensing issues, compliance with REBNY and NAR rules, and the impact of recent antitrust litigation. Call 646.216.8009 or email info@liebatlaw.com to speak with Lieb at Law today.

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