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Brokers beware. At the beginning of August, New York State passed a bill that gives the Department of State the power to revoke a real estate agent or broker’s license should they be found to have engaged in housing discrimination.
The bill, which was signed by Governor Andrew Cuomo on August 3, aims to help end discriminatory real estate practices that have significantly affected minority purchasers. A human rights law already in place in the State prohibits housing discrimination on the basis of a protected characteristic, including race, creed, national origin, sex, age, disability, marital status, military status, family status, sexual orientation or gender identity.
So, Why the Additional Bill?
A 2019 investigation by Newsday revealed that, despite the human rights law already in place, agents had made many violations. For example, some agents have steered buyers toward minority populations and even required minority clients to show additional proof of income before they would agree to show them properties.
As a result, the State has taken extensive action — not only to ban housing discrimination, but also to reprimand brokers and agents found to have violated the human rights law. According to the bill, the Department of State may inflict the following consequences on brokers who violate this right:
- Revoke their broker’s license
- Suspend the broker’s license for a period of time determined at the State’s discretion
- Impose a fine up to $1,000
- Reprimand (upon conviction) the licensee of a violation of any provision of this article
The language of the bill clarifies that the State is cracking down on brokers and addressing more nuanced behavior that could potentially be discriminatory, such as a “demonstration of untrustworthiness” and “dishonest or misleading advertising.”
However, the text of the bill is rather vague, which could open up a slew of issues for brokers. The crackdown also comes at a time when brokers are facing immense hardship and a decline in business due to COVID-19 — especially in New York City.
What’s more, unlike other professionals, brokers were not eligible for loans and unemployment, which makes it difficult to generate income during a tough market. And now, with new laws in place, brokers are facing additional pressure from the state on their practices.
“Homeownership is the cornerstone of the American Dream, and real estate agents and brokers play a significant role in this momentous part of their clients’ lives. Discrimination and segregation have no place in our modern society, and certainly have no place within the real estate and the housing industry.” (Senate Bill S6874A)
Real Estate and Corporate Transactions Attorney Nataly Goldstein is a graduate of Cardozo School of Law, where she served as President of the Real Estate Law Association. She is experienced in both residential and commercial real estate transactions, as well as representing large banks, such as Wells Fargo and Citibank.